Helen of Troy said stretched American consumers are reining in discretionary spending and opting for everyday essentials, with sales also being hit by paused or cancelled direct import orders due to tariffs.

Helen of Troy (HELE) shares tumbled 26% on Thursday morning after the health and wellness company forecast second-quarter sales and profit below Wall Street expectations on the back of slowing consumer spending as well as higher product and commodity costs tied to U.S. President Donald Trump’s tariffs.

Helen of Troy stock was trading at $23.31 after it also missed analysts’ estimates for first-quarter (Q1) sales and profit. Retail sentiment around Helen of Troy was in the ‘neutral’ territory, compared to ‘bullish’ a day ago, according to Stocktwits data.

The company expects second-quarter (Q2) net sales in the range of $408 million to $432 million, compared with analysts’ expectations of $475.1 million, according to data compiled by Fiscal AI.

It forecast adjusted profit for second quarter between $0.45 and $0.60 per share, compared with estimates of $1.16.

The company said a highly stretched American consumer has started to prioritize spending on day-to-day and need-based items over discretionary items, such as outdoor gear and beauty products like hair dryers, as Trump’s tariffs have led to price hikes in the country.

This, along with a highly promotional environment to attract customers, has negatively impacted Helen of Troy’s performance, it added.

Revenue during the first quarter in its home and outdoor segment fell 10.3% to $178.0 million while revenue in beauty and wellness decreased 11.3%, to $193.7 million.

The company said that it is also experiencing an impact on sales from the pause or cancellation of direct import orders in response to higher tariffs, as well as the ongoing shift from cross-border e-commerce to localized distribution.

Helen of Troy is dependent on China and Vietnam for manufacturing and has been attempting to diversify its supply chain to avoid the higher tariffs. The company, in April, did not provide an annual forecast due to the tariff hit for the year.

In the first quarter, Helen of Troy’s total sales fell 10.8% to $371.7 million, which missed estimates of $394.9 million.

The reported quarter’s adjusted profit came in at $0.41 per share, below expectations of $0.84.

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