Hydro Flask maker Helen of Troy plans to redirect part of its expected $80.5 million in tariff refunds toward cleaning up inventory and redesigning packaging to comply with environmental regulations, executives said on an Oct. 8 earnings call.
Tariff Refunds Offer Temporary Relief
In the quarter ended Aug. 31, the company recognized $26.9 million of the expected refund, using some of it to offset higher commodity, fuel, and freight costs. The remainder is projected to arrive by the end of FY2027, which ends Feb. 28, 2027.
Helen of Troy, which also owns brands Osprey and Drybar, started receiving refunds in Q1 FY27 that ended May 31. At the time, the company said increased spending to avoid supply disruptions and higher commodity and freight costs offset the initial $9.2 million it received.
The returned levies followed the Supreme Court’s February ruling that invalidated tariffs the Trump administration imposed under the International Emergency Economic Powers Act. Other consumer products companies have also received refunds for the defunct levies, including PepsiCo, cosmetics and skincare company E.l.f. Beauty and personal care company Kimberly-Clark.
CFO Brian Grass cautioned that the refunds do not fully compensate for years of tariff payments. “We’ve paid tariffs that have not been refunded,” he said.
Inventory Cleanup Targets Slow-Moving Stock
The company aims to improve its inventory composition by reducing slow-moving merchandise. As of the most recent fiscal quarter, Helen of Troy held $480 million in inventory, a 49% year-over-year decline.
Executives noted a seven percentage point increase in active inventory during the first half of FY27 and set a goal for an additional 12 percentage point improvement by the end of the fiscal year.
Packaging Redesign Addresses New Regulations
Helen of Troy is also allocating refund funds to redesign packaging for compliance with environmental laws in the U.S., Canada, the European Union, the Middle East, and Africa. These regulations shift packaging disposal costs from municipalities to producers of consumer packaged goods.
