Helen of Troy Limited (HELE) is learning the hard way that tariffs aren't just a policy debate. They're showing up in the quarterly numbers, and investors didn't like what they saw Thursday.

The consumer products company reported third-quarter adjusted earnings of $1.71 per share, hitting analyst expectations right on the nose. Revenue came in at $512.8 million, down 3.4% year over year but ahead of the $503.6 million Street estimate. So far, not terrible.

But here's where things get interesting. The company slashed its full-year profit outlook, cutting adjusted EPS guidance to a range of $3.25 to $3.75 from the previous $3.75 to $4.25. That new midpoint sits well below the $4.02 analyst consensus. Helen of Troy shares dropped 12.22% to $18.50, hovering near the stock's 52-week low of $17.01.

The culprit? Tariffs are eating into margins faster than expected. Gross profit margin contracted 200 basis points to 46.9%, primarily driven by higher tariff costs and unfavorable inventory obsolescence impacts. The company is now sitting on $35 million in extra inventory tied to those tariff costs, a defensive move that's also pushing up the balance sheet debt load to $892.4 million from $733.9 million.

The operational picture wasn't pretty either. Helen of Troy posted a consolidated operating loss of $8.4 million in the quarter, representing negative 1.6% of sales. That's a sharp reversal from the prior year's operating income of $75.1 million, or 14.2% of sales. Adjusted EBITDA fell to $75.6 million from $96.8 million, with margins compressing to 14.7% from 18.2%.

On the revenue side, organic business sales dropped $57.1 million, or 10.8%. The weakness was broad-based across product categories including insulated beverageware, hair appliances, prestige hair care products, thermometers, humidifiers, and water filtration systems.

The company did narrow its fiscal 2026 revenue outlook slightly, now expecting sales between $1.758 billion and $1.773 billion compared to the previous range of $1.739 billion to $1.780 billion. That brackets the $1.763 billion consensus nicely, but with profitability taking the hit, it's cold comfort for shareholders.

Cash and cash equivalents also declined to $27.1 million from $40.8 million, while inventory climbed to $505.3 million from $450.7 million. The balance sheet is feeling the squeeze from multiple directions.