In brief: Hydro Flask maker Helen of Troy expects all $80.5 million of its IEEPA tariffs back this fiscal year and plans to reinvest $66.5 million to $70.5 million of it.
Implications:
One-time money: IEEPA refunds are paid once, to the importer of record, and Helen of Troy expects its last $51.8 million this quarter.
Packaging fees: If you sell into Oregon or Colorado, your packaging carries a state recycling fee, and California’s first bills come in January.
Retail orders: If you sell drinkware or similar goods, expect retailers to order less while they work down the stock they already hold.
The News
Helen of Troy, which owns Hydro Flask, Osprey and Drybar, expects to get back all $80.5 million it paid in IEEPA tariffs this fiscal year and plans to put $66.5 million to $70.5 million of it back into the business, executives said on the company’s earnings call.
Most of that money is still to come. The company booked $26.9 million of refunds in its fiscal second quarter, which ended in August, and expects the remaining $51.8 million in the quarter that runs through November.
CFO Brian Grass said the reinvestment covers work like “cleaning up inventory, the packaging, if we can pull things forward,” because “we want to pull forward as much cost as possible so that we don’t have to bear the cost in fiscal ‘28,” which starts in March 2027. Some of that work has started: the company ran closeouts and liquidations on slow sellers, and its inventory ended the quarter at $480 million, $49 million lower than a year earlier.
About 25% of the spending goes to projects expected to pay back this fiscal year, Grass said, and the rest goes to longer-term work that CEO Scott Uzzell described as “brand investment, packaging, product development.”
Why It Matters
Helen of Troy is spending a one-time refund on costs it expects to keep facing, because the tariffs cost it more than the refund returns.
Not made whole: Grass said the company has “not been made whole” from tariffs, after spending to diversify its suppliers and absorb longer lead times.
Rising costs: Grass said product costs are climbing with gas and diesel prices, commodities, currency and supply scarcity, and the refund doesn’t cover those.
Next year: Paying for stock clearance and packaging changes now keeps those costs out of fiscal 2028, which Grass said is the goal.
Who Pays
A growing number of states now make producers pay for packaging disposal, and that bill is part of what Helen of Troy plans to cover with its refund. Higher packaging costs tied to state and foreign laws raised its overhead in the quarter, Grass said, describing programs that move “the cost of packaging disposal from municipalities to producers.” He plans to use refunds to cover some of the first fees and to “take a fresh look at our packaging,” making it “more environmentally friendly and more appealing to our consumers and retailers.”
Because the fees are charged by the pound and by material, the packaging choice sets the bill. Oregon and Colorado have set their rates:
Cardboard: $0.08 a pound in both states.
Plastic film: $0.43 to $1.02 a pound, depending on the plastic and the state.
California: preliminary rates are out ahead of its first bills in January, and they aren't final until the state approves the program plan.
For example, 100,000 units sold into Colorado, each in a tenth of a pound of polypropylene film, come to 10,000 pounds of film and about $6,400 in fees, while the same weight of cardboard would cost $800.
Who’s Exposed
Drinkware brands selling through retail: Grass expects “inventory correction needed in the channel in the beverageware category” in the second half, and he said Helen of Troy won’t match competitors’ promotions.
Importers still waiting: CBP has certified about $122 billion in refunds for payment, but more than $1 billion sat on hold over missing bank details, and a third phase now covers older, finally settled entries.
Buyers who paid tariffs through a supplier: the refund goes to the importer of record unless a contract says otherwise.
Who Else
Williams-Sonoma paid $47.5 million to vendors that had given it discounts to offset tariffs, while Kohl’s shared refunds with vendors that charged it more to import goods and put cash into deeper stock of lower-priced brands. Funko took a different route, selling more than $22 million in refund claims for $19.2 million in cash and using some of it to pay down a loan.
Notable
Supply Chain Dive on Helen of Troy’s first refunds: shows that in the spring quarter, higher freight, commodity and currency costs were already offsetting the first refund payments.
What’s Next
Through November: Helen of Troy expects the last $51.8 million of its refunds.
January 2027: California sends its first packaging fee bills to producers.
March 2027: Helen of Troy’s fiscal 2028 starts, the year Grass wants to enter with these costs behind it.
