Helen of Troy (HELE) risk factors, FY2025 10-K

Business, Operational and Strategic Risks

1. 01such as usernames, passwords or other information in order to gain access to customer or supplier data or our internal data, including intellectual property, financial, and other confidential business information
2. 02We rely on central global Enterprise Resource Planning (“ERP”) systems and other peripheral information systems. A cybersecurity breach, obsolescence or interruptions in the operation of our computerized systems or other information technologies could have a material adverse effect on our operations and profitability
3. 03To compete successfully, we must develop and introduce a continuing stream of innovative new products to meet changing consumer preferences
4. 04Large customers may take actions that adversely affect our gross profit and operating results
5. 05Our operating results are dependent on sales to several large customers and the loss of, or substantial decline in, sales to a top customer could have a material adverse effect on our revenues and profitability
6. 06We are dependent on third-party manufacturers, most of which are located in Asia, and any inability to obtain products from such manufacturers could have a material adverse effect on our business, operating results and financial condition
7. 07Our ability to deliver products to our customers in a timely manner and to satisfy our customers’ fulfillment standards are subject to several factors, some of which are beyond our control
8. 08We are subject to risks related to our dependence on the strength of retail economies and may be vulnerable in the event of a prolonged economic downturn, including a downturn from the effects of macroeconomic conditions, any public health crises or similar conditions
9. 09Our business is subject to weather conditions, the duration and severity of the cold and flu season and other related factors, which can cause our operating results to vary from quarter to quarter and year to year
10. 10We rely on our CEO and a limited number of other key senior officers to operate our business. The loss of any of these individuals could have a material adverse effect on our business
11. 11We rely on licensed trademarks from third parties and license certain trademarks to third parties in exchange for royalty income, the loss of which could have a material adverse effect on our revenues and profitability
12. 12We may be unsuccessful in executing and realizing expected synergies from strategic business initiatives such as acquisitions, divestitures, and global restructuring plans (including Project Pegasus), which may adversely affect the price of our common stock

Legal, Regulatory and Tax Risks

1. 13If significant tariffs or other restrictions continue to be placed on imports from China, Mexico or Vietnam or any retaliatory trade measures are taken by China, Mexico or Vietnam, our business and results of operations could be materially and adversely affected
2. 14Changes in laws and regulations, including environmental, employment and health and safety and tax laws, and the costs and complexities of compliance with such laws could have a material adverse impact on our business
3. 15Increased focus and expectations on climate change and other sustainability matters could have a material adverse effect on our business, financial condition and results of operations and damage our reputation
4. 16Significant changes in or our compliance with regulations, interpretations or product certification requirements could adversely impact our operations
5. 17Global legal developments regarding privacy and data security could result in changes to our business practices, penalties, increased cost of operations, or otherwise harm our business
6. 18Legislation enacted in Bermuda and Barbados in response to the EU's review of harmful tax competition could adversely affect our operations
7. 19headquarters, shipping, distribution and service center, intellectual property and holding entities. Any entity that is required to satisfy economic substance requirements must file a declaration with the Bermuda Registrar of Companies and the Ministry of International Business and Industry in Barbados, as applicable
8. 20Our judgments regarding the accounting for tax positions and the resolution of tax disputes may impact our net earnings and cash flow
9. 21Our business involves the potential for product recalls, product liability and other claims against us, which could materially and adversely affect our business, operating results and financial condition

Financial Risks

1. 22Increased costs of raw materials, energy and transportation may adversely affect our operating results and cash flow
2. 23If our goodwill, indefinite-lived and definite-lived intangible assets, or other long-lived assets become impaired, we will be required to record additional impairment charges, which may be significant
3. 24operations and cash flows. These factors were applicable to all of our reporting units which resulted in us
4. 25Our operating results may be adversely affected by foreign currency exchange rate fluctuations
5. 26Our liquidity or cost of capital may be materially adversely affected by constraints or changes in the capital and credit markets, interest rates and limitations under our financing arrangements
6. 27Our projections of product demand, sales and net income are highly subjective in nature and our future sales and net income could vary by a material amount from our projections
7. 28demand, retailer inventory management strategies, transportation lead times, supplier capacity, and raw material availability could make our inventory management and sales forecasting more difficult. Due to these factors, our future sales and net income could vary materially from our projections