Parent company of Osprey and Hydro Flask puts a halt on inventory purchases in China

Osprey and Hydro Flask’s parent company, Helen of Troy, has decided to freeze its inventory purchases from China due to the unpredictable nature of tariff increases. While announcing a decrease in net sales for the fourth quarter and the entire year of 2025, the company cited the volatile conditions created by the escalating tariffs as the reason for this decision.

Although Helen of Troy will continue to make necessary purchases to support ongoing launches, the overall strategy will involve a reduction in inventory acquisitions in anticipation of a weaker consumer demand in the coming months. This move is part of the company’s response to the uncertainty caused by the fluctuating global tariff landscape. CEO Noel M. Geoffroy highlighted the challenges in business planning amid such unpredictable conditions.

The fourth-quarter results for the company showed a decrease of 0.7% in net sales, while the yearly net sales figures dipped by 4.9%. As a result, Helen of Troy has refrained from providing a fiscal outlook for 2026, given the uncertain implications of the higher tariffs. To combat the impact, the company is exploring options to diversify its production away from China and aims to reduce the proportion of goods affected by Chinese tariffs to below 20% by the end of fiscal 2026. Considering price increases as a potential alternative, the company is also looking at various ways to mitigate the financial repercussions of the tariffs.

In addition to pausing inventory purchases from China, Helen of Troy is implementing several cost-cutting measures to manage its cash flow effectively. These measures include suspending non-essential projects and capital expenditures, reducing marketing and promotional expenses, optimizing personnel costs, and streamlining accounts receivable and payable processes. By taking these actions, the company aims to counteract 70% to 80% of the tariff impact expected in fiscal 2026.

Despite the decline in yearly net income by 26.5%, the fourth-quarter results showed a 19.2% increase in net income. Earnings per share also saw an improvement from the same period last year, rising by 24%. While the yearly earnings per share decreased by 23.6%, the company remains optimistic about its ability to navigate the challenges posed by the tariffs.

Based in El Paso, Texas, Helen of Troy trades on the NASDAQ under the symbol HELE. As part of its strategic response to the escalating tariffs, the company has taken a conservative approach to inventory purchases from China, focusing on diversification and cost reduction measures to mitigate the financial impact of the changing global trade landscape.