Helen of Troy Ltd (HELE)
Interest coverage
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 143,501 | 217,940 | 219,151 | 233,774 | 242,217 | 221,491 | 222,157 | 218,493 | 211,791 | 208,462 | 221,366 | 233,383 | 264,387 | 237,371 | 248,064 | 288,521 | 281,126 | 285,502 | 264,085 | 210,987 |
| Interest expense (ttm) | US$ in thousands | 51,922 | 50,423 | 51,118 | 51,556 | 53,065 | 54,628 | 54,918 | 50,430 | 40,751 | 30,024 | 20,081 | 14,222 | 12,844 | 12,557 | 12,277 | 11,766 | 12,617 | 12,982 | 12,823 | 13,243 |
| Interest coverage | 2.76 | 4.32 | 4.29 | 4.53 | 4.56 | 4.05 | 4.05 | 4.33 | 5.20 | 6.94 | 11.02 | 16.41 | 20.58 | 18.90 | 20.21 | 24.52 | 22.28 | 21.99 | 20.59 | 15.93 |
February 28, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $143,501K ÷ $51,922K
= 2.76
The interest coverage ratio of Helen of Troy Ltd has shown fluctuations over the years. It started at 15.93 on May 31, 2020, indicating the company's ability to cover its interest expenses nearly 16 times. Subsequently, the ratio improved, reaching a peak of 24.52 on May 31, 2021, signifying an even better ability to cover interest costs.
However, there was a slight decline in the interest coverage ratio from the peak in May 2021 to 11.02 on August 31, 2022. This significant drop suggests a reduced capacity to cover interest expenses, which could raise concerns about the company's financial health.
The interest coverage ratio continued to decrease, reaching a low of 2.76 on February 28, 2025, indicating a potential inability to comfortably meet interest obligations with operating income alone. This decline in the ratio over the years may indicate increasing financial risk for Helen of Troy Ltd, as lower interest coverage ratios could imply higher leverage and financial vulnerability.