UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission file number 001-14669

HELEN OF TROY LIMITED

CLARENDON HOUSE
CHURCH STREET
HAMILTON, BERMUDA
(Address of principal executive offices)

Registrant’s telephone number, including area code: (915) 225-8000

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK - $.10 PAR VALUE
(Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) Yes [X] No [ ]

     The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as the last day of the registrant’s most recently completed second quarter was $573,049,954.

     As of May 11, 2004 there were 29,471,111 shares of Common Stock, $.10 Par Value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     Certain sections of the Company’s definitive proxy statement, which is to be filed under the Securities Exchange Act of 1934 within 120 days of the end of the Company’s fiscal year on February 29, 2004, are incorporated by reference into Part III hereof. Except for those portions specifically incorporated by reference herein, such document shall not be deemed to be filed with the Securities and Exchange Commission as part of this Form 10-K.

Index to Exhibits - Page 75

TABLE OF CONTENTS

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PART I

ITEM 1. BUSINESS

GENERAL

     Unless the context requires otherwise, references to “the Company,” to “our Company,” or to “Helen of Troy” and references such as “we”, “our” and “us” refer to Helen of Troy Limited and its subsidiaries.

     Helen of Troy Limited is a global designer, developer, importer and distributor of hair care appliances, hair brushes, combs, hair accessories, hair and skin care liquids and powders and other personal care products. In past years, our Company has reported segment information for three operating segments: North America, International, and Tactica. The North American and International segments sell the same portfolio of products, principally through mass merchants, general retail and specialty retail outlets. Tactica sells personal care and other consumer products to retailers and uses direct response marketing to sell such products directly to consumers. As more fully described in Note (15) to our consolidated financial statements, in the fourth fiscal quarter of 2004, we made the decision to sell our business activities with Tactica, and have made appropriate reclassifications to reflect its activities as a discontinued operation in the accompanying consolidated financial statements. On April 29, 2004 we completed the sale of our ownership interest in Tactica International, Inc. (“Tactica”) back to certain of its key operating manager-shareholders. In exchange for our 55 percent ownership share of Tactica and $17,161,000 of its secured debt and accrued interest, we received marketable securities, intellectual properties, and the right to certain tax refunds. We do not expect a material gain or loss to arise from this sale transaction. We expect to conclude all related exit activities by the end of the second fiscal quarter of 2005.

     Our brand portfolio and operations continue to expand and evolve. During the year, we completed the operating integration of six liquid and powder hair and skin care brands acquired from Procter & Gamble Company in October 2002. Additionally, at the end of September 2003, we acquired the rights to produce and distribute Brut® fragrances, deodorants and antiperspirants throughout North America, Latin America, and the Caribbean. We are currently completing our operating integration of the Brut® product line. We believe these brand acquisitions provide us a solid foothold in grooming, skin care, and hair care products, and represent a significant growth opportunity for us over the coming years. In addition to the core growth (growth from other than acquisition) of our existing brands, when the right opportunity presents itself, we expect to continue to make selective acquisitions of brands that fit our marketing expertise, distribution capability, and return on investment requirements.

     With this strategy in mind, over the past fiscal year we have started an effort to simplify our operating structure in advance of conversion to a new global information system (to be placed into service in fiscal 2005). With the implementation of our new information system, substantially all of our business will be operated under one integrated reporting platform. Management’s philosophy is to emphasize uniform processes within a global operating system that markets and distributes an optimal mix from its product portfolio tailored to the needs, requirements, and economics of local markets. Our Discussion and Analysis of Financial Condition and Results of Operations beginning on page 18 reflects certain changes in content and organization necessary and appropriate to your understanding of our performance. We expect our financial presentations to continue to evolve further next year as the full impact of our recently announced acquisition of OXO International from WKI Holding Company, Inc. becomes reflected in our continuing operations. Our pending acquisition of OXO is further discussed in Note (15) to our consolidated financial statements. We present financial information for each of our operating segments in Note (11) of the consolidated financial statements. The matters discussed in Item 1, herein pertain to all of our existing operating segments, unless otherwise specified.

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     We use outside manufacturers to produce our goods. We sell our products to mass merchandisers, drug chains, warehouse clubs, grocery stores, beauty supply retailers and wholesalers, as well as to individual consumers in the United States and other countries.

     We sell certain of our products under licenses from third parties. Our licensed trademarks include Vidal Sassoon®, licensed from The Procter & Gamble Company; Revlon® licensed from Revlon Consumer Products Corporation; Dr. Scholl’s®, licensed from Schering-Plough HealthCare Products, Inc.; Scholl® (in areas other than North America), licensed from SSL Int. Ltd.; Sunbeam®, licensed from American Household, Inc.; Sea Breeze®, licensed from Shisheido Corporation; and Vitapointe®, licensed from Sara Lee Household and Body Care UK Limited.

     We own and actively market a number of trademarks, including Brut®, Vitalis®, Final Net®, Ammens®, Condition 3-in-1®, Dazey®, Caruso®, Karina®, DCNL™, Nandi™, Isobel™, and WaveRage™. We also market hair and beauty care products under the Helen of Troy®, Hot Tools®, Hot Spa®, Salon Edition®, Gallery Series®, and Wigo® trademarks to the professional beauty salon industry.

     We were incorporated as Helen of Troy Corporation in Texas in 1968 and reincorporated as Helen of Troy Limited in Bermuda in 1994.

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PRODUCTS

     Our business is designing, developing, and selling a full line of personal care and comfort products. The following table lists the primary products we sell and some of the brand names that appear on those products.

     In addition to the products shown above, we owned 55 percent of Tactica which we re-classified as a discontinued operation at the end of fiscal 2004, and subsequently sold on April 29, 2004. Tactica designs, develops and sells a variety of personal care and other consumer products in categories such as hair care, hair removal, dental care, skin care, sports and exercise, household, and kitchen.

     We continue to develop new products and enhance existing products in order to maintain and improve our position in the personal care and comfort product market. For example, during fiscal 2003 we improved

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existing products by adding new technologies to them. Examples include ionic hair care appliances and ceramic hair care appliances. We continued to extend our line of ceramic hair care appliances during fiscal 2004. Ceramic heating surfaces allow infrared heat to penetrate hair quickly and evenly, drying hair faster with superior results. We also continued to extend our line of hair care appliances that incorporate Ionic Technology™. Ionic appliances introduce negative ions into the hair which breaks up moisture on the hair’s surface allowing for quicker drying, better conditioning and smoothing, giving hair a shinier, silkier look and feel. During fiscal 2005 we expect to introduce cordless rechargeable hair care appliances. Also, to provide our consumers more precise thermal application and styling control, we expect to continue to add digital controls, pulse heat and a wider range of wattages to the appliances in our product line.

     Our internal product development efforts were augmented by our fiscal 2003 acquisition from The Procter & Gamble Company of the rights and formulas associated with six hair and skin care brand names. Pursuant to this acquisition, we acquired ownership of the Vitalis®, Condition 3-in-1®, Final Net®, and Ammens® trade names. Additionally, we acquired the rights under long-term license agreements to sell products using the Sea Breeze® and Vitapointe® trademarks. Currently, we are selling hair care and styling liquids under the Vitalis®, Condition 3-in-1®, Final Net®, and Vitapointe® trademarks; skin care liquid, in the form of an astringent, under the Sea Breeze® trademark; and medicated skin care powder under the Ammens® name.

     At the end of September 2003 we acquired certain assets related to the Western Hemisphere production and distribution of Brut® fragrances, deodorants, and antiperspirants from Conopco, Inc., a wholly owned subsidiary of Unilever NV. This acquisition continues to expand our brand presence in the grooming, skin care, and hair products categories of our business.

     You can learn more about our currently marketed products at the following Internet address:

http://www.hotus.com

SALES AND MARKETING

     We market our products primarily within the United States. Sales within the United States comprised 84, 90 and 88 percent of total net sales in fiscal 2004, 2003, and 2002, respectively. Both our North American and International segments sell their products primarily through mass merchandisers, drug chains, warehouse clubs, catalogs, grocery stores, and beauty supply retailers and wholesalers. Both of these segments market products through a combination of outside sales representatives and our own internal sales staff.

     The companies from whom we license many of our brand names promote those names extensively. The Revlon®, Vidal Sassoon®, Dr. Scholl’s® and Sunbeam® trademarks are widely recognized because of advertising and the sale of a variety of products. We believe we benefit from the name recognition associated with a number of our licensed trademarks and seek to further improve the name recognition and perceived quality of all the trademarks under which we sell products through our own advertising and product development efforts. We also promote our products through television advertising and through print media, including consumer and trade magazines and various industry trade shows.

     In fiscal 2004 we reached an agreement to become the title sponsor of the Sun Bowl for the next three years starting with the December 2004 game. The Sun Bowl is one of the longest running invitational post season college football games in the United States with a history that spans over 70 years. The “Vitalis Sun Bowl” will be the official name of this event. CBS Sports will broadcast the game to a nationwide audience and

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we believe this sponsorship will provide us an opportunity to re-introduce the Vitalis brand to a whole new generation of consumers.

MANUFACTURING AND DISTRIBUTION

     We contract with unaffiliated manufacturers in the Far East, primarily in the Peoples’ Republic of China, Thailand, Taiwan, and South Korea, to manufacture most of the hair and personal care appliances and hair brushes, combs, and hair care accessories sold by our North American and International segments (see discussion of International Manufacturing and Operations in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Forward-Looking Information and Factors That May Affect Future Results”). For fiscal 2004, goods manufactured by vendors in the Far East comprised approximately 89 percent of the dollar value of the North American and International segments’ inventory purchases. For fiscal 2003, goods manufactured by vendors in the Far East comprised approximately 95 percent of the dollar value of the North American and International segments’ inventory purchases. Our mix of Far East production continues to decrease with the expansion of our product offerings (most of our grooming, skin care and hair care products are sourced with unaffiliated manufacturers in North America). We purchase the remainder of our products from unaffiliated manufacturers, primarily in Europe.

     The manufacturers who produce our products use formulas, molds, and certain other tooling, some of which we own, in manufacturing those products. All our business segments employ numerous technical and quality control persons to assure high product quality.

     Our products that are manufactured in the Far East and sold in North America are shipped to the West Coast of the United States and Canada. The products are then shipped by truck or rail service to warehouse facilities in El Paso, Texas; Southaven, Mississippi; Toronto, Canada; and Vancouver, Canada, or directly to customers. We ship substantially all products to North American customers from these warehouses by ground transportation services. Products sold outside the United States and Canada are shipped from manufacturers primarily in the Far East, to warehouse facilities in The Netherlands, the United Kingdom, Mexico, Brazil, or directly to customers. We ship products stored at the warehouses in The Netherlands, the United Kingdom, Mexico, and Brazil to distributors or retailers.

     Our customers in the North American and International segments seek to minimize their inventory levels and often demand that we fulfill their orders within relatively short time frames. Consequently, these inventory management practices often require us to carry substantial levels of inventory in order to meet our customers’ needs.

     Most of our products manufactured outside the countries in which they are sold are subject to import duties, which have the effect of increasing the amount we pay to obtain such products.

LICENSE AGREEMENTS, TRADEMARKS, AND PATENTS

     The North American and International operating segments depend materially upon the continued use of trademarks licensed under various agreements. The Vidal Sassoon®, Revlon®, Sunbeam® and Dr. Scholl’s® trademarks are of particular importance. New product introductions under licensed trademarks require approval from the respective licensors. The licensors also must approve the product packaging. Many of the license agreements require the Company to pay minimum royalties, meet minimum sales volumes, and make minimum levels of advertising expenditures. The duration of the license agreements for the Revlon®, Vidal Sassoon®, Sunbeam®, and Dr. Scholl’s® trademarks, including the renewal terms, exceeds ten years. Upon expiration of the current terms of these agreements, we have the right to extend their terms upon payment of a renewal fee.

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The discussion below covers the primary product categories that Helen of Troy currently sells under its major license agreements. The product categories discussed do not necessarily include all of the products that Helen of Troy is entitled to sell under these or other license agreements.

     Under an agreement with The Procter & Gamble Company, Helen of Troy is licensed to sell certain products bearing the Vidal Sassoon® trademark worldwide, except in Asia. Products sold under the terms of this license include hair dryers, curling irons, straightening irons, styling irons, hairsetters, hot air brushes, hair clippers and hair trimmers, mirrors, brushes, combs, and hair care accessories.

     Under agreements with Revlon Consumer Products Corporation, we are licensed to sell worldwide except in Western Europe, hair dryers, curling irons, straightening irons, brush irons, hairsetters, brushes, combs, mirrors, functional hair accessories, personal spa products, hair clippers and trimmers, and battery-operated and electric women’s shavers bearing the Revlon® trademark.

     We are licensed to sell foot baths, foot massagers, hydro massagers, cushion massagers, body massagers, paraffin baths, and support pillows bearing the Dr. Scholl’s® trademark in the United States and Canada, under an agreement with Schering-Plough HealthCare Products, Inc. We also are licensed to sell the same products under the Scholl® trademark in other areas of the world through an agreement with Scholl Limited.

     Under an agreement with American Household, Inc. we are licensed to sell hair clippers, hair trimmers, hair dryers, curling irons, hairsetters, hot air brushes, mirrors, manicure kits, hair brushes and combs, hair rollers, hair accessories, paraffin baths, and spa products bearing the Sunbeam® and Sunbeam Health at Home® trademarks in the United States, Canada, Mexico, Central America, South America, and the Caribbean.

     In October 2002, we acquired from The Procter & Gamble Company the right to sell products under the trademark Sea Breeze® pursuant to a perpetual royalty free license from Shisheido Corporation. We currently sell a line of liquid skin care products under the Sea Breeze® name in the United States and Canada.

     Helen of Troy has filed or obtained licenses for design and utility patents in the United States and several foreign countries. We also protect certain details about our processes, products and strategies as trade secrets, keeping confidential the information that we believe provides us with a competitive advantage. Our ability to enforce patents, copyrights, licenses, and other intellectual property is subject to general litigation risks, as well as uncertainty as to the enforceability of various intellectual property rights in various countries.

RELIANCE ON ONE CUSTOMER

     Sales to Wal-Mart Stores, Inc., and its affiliate, SAM’S Club, accounted for approximately 28 percent, 29 percent, and 29 percent of our net sales in fiscal 2004, 2003, and 2002, respectively. No other customer accounted for ten percent or more of net sales during those fiscal years.

ORDER BACKLOG

     When placing orders, our retail and wholesale customers usually request that we ship the related products within specific time frames. There was no significant backlog of orders in any of our distribution channels as of the end of fiscal 2004.

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COMPETITIVE CONDITIONS

     The markets in which we sell our products are very competitive. Maintaining and gaining market share depends heavily on product development and enhancement, pricing, quality, performance, packaging and availability, brand name recognition, patents, and marketing and distribution approaches. Our primary competitors include The Conair Corporation, Applica Incorporated, Remington Products Company, Goody Products, Inc., a division of Newell Rubbermaid, Inc., Homedics-USA, Inc., The New L & N Marketing and Sales Corporation, Chattem, J&J Boots, Andrew Jergens, Loreal, Unilever, and Alberto Culver. Some of these competitors have significantly greater financial and other resources than we do.

SEASONALITY

     Our business is somewhat seasonal. Net sales in third fiscal quarter accounted for approximately 35, 33, and 33 percent of fiscal 2004, 2003 and 2002 net sales, respectively. As a result of the seasonality of sales, our working capital needs fluctuate during the year.

REGULATION

     Our electrical products must meet the safety standards imposed in various national, state, local, and provincial jurisdictions. Our electrical products sold in the United States are designed, manufactured, and tested to meet the safety standards of Underwriters Laboratories, Inc. or Electronic Testing Laboratories.

     The medicated skin powder that we sell under the Ammens® trademark is regulated by the United States Food and Drug Administration.

EMPLOYEES

     As of fiscal year end 2004, we employed 681 full-time employees in the United States, Hong Kong, Europe, Brazil and Mexico of which 205 are marketing and sales employees, 158 are distribution employees, 34 are engineering and development employees, and 284 are administrative personnel. As more fully discussed in Note (15) to our consolidated financial statements, these totals include 58 employees from Tactica, a discontinued business segment sold on April 29, 2004. At the end of fiscal 2004, Tactica employed 41 administrative and 17 sales and marketing personnel. None of the Company’s employees are covered by a collective bargaining agreement. We have never experienced a work stoppage and we believe that we have satisfactory working relations with our employees.

GEOGRAPHIC INFORMATION

     Note (11) to the consolidated financial statements contains geographic information concerning our net sales and long-lived assets.

SECURITIES EXCHANGE ACT REPORTS

     We maintain an Internet site at the following address: http://www.hotus.com. We make available on or through our Internet website certain reports and amendments to those reports that we file with or furnish to the Securities and Exchange Commission (the “SEC”) in accordance with the Securities Exchange Act of 1934 (the “Securities Exchange Act”). These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The

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public may read and copy any of the materials we file with the SEC in accordance with the Securities Exchange Act at the SEC’s Public Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0300. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information about our Company. The address of the SEC’s Internet site is http://www.sec.gov.

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ITEM 2. PROPERTIES

PLANT AND FACILITIES

     North American Operations (servicing all business segments, except Tactica). We own a 135,000 square foot office building and a 408,000 square foot warehouse in El Paso, Texas. The office building houses our U.S. operations. The El Paso office building and warehouse are located on a 50-acre plot of land that we own. We also own a 619,000 square foot warehouse in Southaven, Mississippi, as well as the 29-acre plot of land on which that warehouse is located. We purchased the Southaven warehouse in January 2003. It became fully operational during May 2003. We lease 108,000 square feet of warehouse space in El Paso, Texas; 50,000 square feet of warehouse space in Toronto, Canada; and 20,000 square feet of warehouse space in Vancouver, Canada. We also lease sales offices in Danbury, Connecticut; Bentonville, Arkansas; Minneapolis, Minnesota; Troy, Michigan; and Toronto, Canada.

     We also own 22 acres of land in El Paso, Texas, near the 50 acres on which the warehouse and the U.S. office building that we own are located. The Company is holding this land for future business use.

     International Operations (servicing all business segments, except Tactica). In mid fiscal 2004, we purchased and moved into a new 10,000 square foot sales and administrative facility in Sheffield, England. We lease warehouse space in public warehouses located in Hong Kong, The Netherlands, and the United Kingdom. In addition, we also lease sales offices in France, Germany, Mexico, and Brazil.

     Tactica. Tactica leases administrative offices in New York, New York and leases public warehouse space in Reno, Nevada.

     Corporate Procurement Operations (servicing our North American and International segments). A subsidiary located in Hong Kong leases approximately 18,000 square feet of office space in Hong Kong. Prior to fiscal 1996 this subsidiary was headquartered in approximately 12,000 square feet of office space in Hong Kong that the Company still owns. This facility is used as a sales office, showroom and staff training site. In January 2004 we entered into a lease for approximately 12,000 square feet of Macao office space to be occupied early in fiscal 2005.

     In December 2003, we sold 12,000 square feet of warehouse space on a 62,000 square foot lot located in El Paso, Texas.

ITEM 3. LEGAL PROCEEDINGS

     Hong Kong Income Taxes - The Inland Revenue Department (“the IRD”) in Hong Kong assessed $6,753,000 (U.S.) in tax on certain profits of our foreign subsidiaries for the fiscal years 1995 through 1997. In March of 2004, the IRD made an additional assessment of $3,583,000 (U.S.) for fiscal year 1998. Hong Kong taxes income earned from certain activities conducted in Hong Kong. We are vigorously defending our position that we conducted the activities that produced the profits in question outside of Hong Kong. The Company also asserts that it has complied with all applicable reporting and tax payment obligations.

     In connection with the IRD’s tax assessment for the fiscal years 1995 through 1997, we were required to purchase $3,282,000 (U.S.) in tax reserve certificates in Hong Kong, which represented approximately 49 percent of the liability assessed by the IRD. The Company purchased additional tax reserve certificates in the amount of $3,583,000 (U.S.) on April 26, 2004 as required by the IRD. Tax reserve certificates represent the prepayment by a taxpayer of potential tax liabilities. The amounts paid for tax reserve certificates are refundable

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in the event that the value of the tax reserve certificates exceeds the related tax liability. These certificates are denominated in Hong Kong dollars and are subject to the risks associated with foreign currency fluctuations.

     If the IRD’s position were to prevail and if it were to assert the same position for years after fiscal 1998, the resulting assessment could total $44,053,000 (U.S.) for the period from fiscal 1995 through fiscal 2004. We vigorously disagree with the proposed adjustments and intend to aggressively contest this matter through applicable taxing authority and judicial procedures, as appropriate. Although the final resolution of the proposed adjustments is uncertain and involves unsettled areas of the law, based on currently available information, the Company has provided for the best estimate of the probable tax liability for this matter. While the resolution of the issue may result in tax liabilities which are significantly higher or lower than the reserves established for this matter, management currently believes that the resolution will not have a material effect on our financial position or liquidity. However, an unfavorable resolution could have a material effect on our results of operations or cash flows in the quarter in which an adjustment is recorded or the tax is due or paid.

     The IRD also assessed $4,468,000 (U.S.) in tax on certain profits of our foreign subsidiaries for the fiscal years 1990 through 1994. During the second quarter of fiscal 2003, we settled our dispute with the IRD related to those years for $2,505,000 (56 percent of the assessed amount), plus interest of approximately $100,000. As a result of the assessment, we forfeited tax reserve certificates previously valued at $2,468,000 on our Consolidated Balance Sheets and paid the IRD approximately $137,000 in cash. The tax reserve certificates that we forfeited were included on our Consolidated Balance Sheet as of fiscal year end 2003, on the line entitled “Other assets.” The settlement did not affect the current status of the IRD’s assessments for fiscal years 1995 through 1998 and did not have a material effect on our consolidated results of operations.

     United States Income Taxes - The Internal Revenue Service (“the IRS”) audited the U.S. federal tax returns of the Company’s largest U.S. subsidiary for the fiscal years through 1999 and all associated taxes have been settled.

     The IRS is currently auditing the U.S. federal tax returns of our largest U.S. subsidiary for fiscal years 2000, 2001, and 2002. The IRS has provided notice of certain proposed adjustments to taxable income. We vigorously disagree with the proposed adjustments and intend to aggressively contest this matter through applicable IRS and judicial procedures, as appropriate. Although the final resolution of the proposed adjustments is uncertain and involves unsettled areas of the law, based on currently available information, we have provided for the best estimate of the probable tax liability for these matters. While the resolution of the issue may result in tax liabilities which are significantly higher or lower than the reserves established for this matter, management currently believes that the resolution will not have a material effect on our financial position or liquidity. However, an unfavorable resolution could have a material effect on our results of operations or cash flows in the quarter in which an adjustment is recorded or the tax is due or paid.

     We plan to permanently reinvest all of the undistributed earnings of the non-U.S. subsidiaries of the U.S. subsidiaries. We have made no provision for U.S. federal income taxes on these undistributed earnings. At February 29, 2004, undistributed earnings for which we had not provided deferred U.S. federal income taxes totaled $50,244,000.

     Other Matters - We are involved in various other legal claims and proceedings in the normal course of operations. In the opinion of management, the outcome of these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2004.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

PRICE RANGE OF COMMON STOCK

     Our Common Stock is listed on the NASDAQ National Market System [symbol: HELE]. The following table sets forth, for the periods indicated, in dollars per share, the high and low bid prices of the Common Stock as reported on the NASDAQ National Market System. These quotations reflect the inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

     We have one class of equity security outstanding at February 29, 2004; Common Stock with a par value of $0.10. As of May 05, 2004 there were approximately 405 holders of record of the Company’s Common Stock. Shares held in “nominee” or “street” name at each bank nominee or brokerage house are included in the number of shareholders of record as a single shareholder. We estimate that approximately 24,500 individuals and institutions hold our Common Stock.

CASH DIVIDENDS

     Our current policy is to retain earnings to provide funds for the operation and expansion of the Company’s business and for potential acquisitions. We have not paid any cash dividends on our Common Stock since inception. Our current intention is to pay no cash dividends in fiscal 2005. Any change in dividend policy will depend upon future conditions, including earnings and financial condition, general business conditions, any applicable contractual limitations, and other factors deemed relevant by our Board of Directors.

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table summarizes information about our equity compensation plans as of February 29, 2004. All outstanding awards relate to our common stock.

EQUITY COMPENSATION PLAN INFORMATION

(1) Includes 366,262 shares authorized and available for issuance in connection with the Helen of Troy Limited 1998 Employee Stock Purchase Plan

PURCHASES OF HELEN OF TROY COMMON STOCK

     The SEC recently amended Item 5 of Form 10-K to add the requirement that a registrant furnish the information required by Item 703 of SEC Regulation S-K for any repurchase of shares made in a month within the fourth quarter of the fiscal year covered by the Form 10-K. Although compliance with this new requirement is not required in a Form 10-K for a fiscal year ending prior to March 15, 2004, we have voluntarily included the following table in order to provide information regarding our purchases of our Common Stock during the three fiscal months ended February 29, 2004:

(1)

The number shown represents, as of the end of each period, the maximum number of shares of Common Stock that may yet be purchased under our publicly announced stock repurchase program. During the quarter ended August 31, 2003, our Board of Directors approved a resolution authorizing the purchase, in open market or through private transactions, of up to 3,000,000 shares of our common stock over a period extending through May 31, 2006.

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During the third fiscal quarter ended November 30, 2003, we purchased and retired a total of 231,800 shares under this resolution at a total purchase price of $5,226,000, for a $22.55 per share average price. For the fourth fiscal quarter ended February 29, 2004, as noted above we purchased and retired an additional 574,326 shares under this resolution at a total purchase price of $15,346,000, for a $26.72 per share average price. We did not purchase any shares during the first half of fiscal 2004.

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ITEM 6. SELECTED FINANCIAL DATA

     The selected consolidated financial information set forth below has been summarized from our consolidated financial statements. This information contains certain reclassifications necessary to restate prior years operations of Tactica as a discontinued segment. This information should be read in conjunction with the consolidated financial statements and the related Notes to consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” All currency amounts in this document are denominated in U.S. dollars.

For the year ended the last day of February,
(in thousands, except per share data)

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ITEM 6. SELECTED FINANCIAL DATA - CONTINUED

As of last day of February,
(in thousands)

(1)		Fiscal 2004, 2003, 2002 and 2001 results include 100 percent of the results of Tactica under the line item, “Income from discontinued operations, net of tax”. We acquired a 55 percent interest in Tactica in March 2000. On April 29, 2004 we completed the sale of our interest in Tactica back to certain of its key operating manager-shareholders. Accordingly, the results of operations of Tactica have been reclassified out of income from continuing operations and working capital has been restated to eliminate the impact of Tactica’s current assets and current liabilities. Also, in the fourth fiscal quarter of 2004, we recorded a loss of $5,699,000 from the impairment of Tactica goodwill, net of $1,938,000 of related tax benefits. Because Tactica had accumulated a net deficit at the time that we acquired our interest in it, and because the minority shareholders of Tactica had not adequately guaranteed their portion of the accumulated deficit, our consolidated financial statements for fiscal 2004, 2003, 2002, 2001 and 2000, as restated include 100 percent of Tactica’s net income or loss. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a further explanation of the accounting for Tactica.
(2)		In fiscal 2003, we adopted Emerging Issues Task Force Abstract 01-9 (“EITF 01-9”). EITF 01-9 requires that certain vendors record certain consideration given to customers as reductions of sales, rather than as selling, general, and administrative expenses. Certain items that, prior to fiscal 2003, were classified as selling, general, and administrative expenses have been reclassified as reductions to net sales. Those items totaled $3,930,000, $4,234,000, and $2,256,000 for fiscal years 2002, 2001, and 2000, respectively.
(3)		In fiscal 2001, we recorded a $2,457,000 charge for the remaining unamortized costs under a distribution agreement, which was later formally terminated. In the fiscal 2004, we recorded income of $2,600,000, net of legal fees, in connection with the settlement of litigation matters related to this item. This income is included in the line item entitled “Other income”.
(4)		In fiscal 2000, we incurred $2,669,000 of charges to cost of goods sold and $8,725,000 of charges to selling, general, and administrative expenses as a result of the discontinuance of our artificial nails product line. In fiscal 2000, we also incurred $770,000 of charges related to the restructuring and reorganization of several departments.
(5)		Other income includes gains from the sale and appreciation of trading securities of approximately $311,000, $75,000, $165,000, $1,400,000, and $6,300,000 for fiscal years 2004, 2003, 2002, 2001 and 2000, respectively.
(6)		In fiscal 2004, we repurchased 806,126 shares of Common Stock at a cost of $20,572,000. In fiscal 2001, we repurchased 815,946 shares of Common Stock at a cost of $4,623,000. In fiscal 2000 we repurchased 526,485 shares of Common Stock at a cost of $4,076,000. No Common Stock was repurchased during the fiscal years ended 2002 and 2003.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion contains a number of forward-looking statements, all of which are based on current expectations. Actual results may differ materially due to a number of factors, including those discussed in the section entitled “ Forward-Looking Information And Factors That May Affect Future Results” and in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.”

OVERVIEW OF THE YEAR’S ACTIVITIES

     As a leading designer, producer and marketer of brand name personal care products, we are constantly searching for new avenues of sales growth. We use product innovation to enhance the versatility, speed, and convenience of our appliances, enabling us to keep our product offerings fresh and exciting to our consumers. Our business over the last year was characterized by the following changes in our business and the market place in which we operate:

•		Electronic Curling Irons, Thermal Brushes, Hair Straighteners, and Hair Crimpers. The curling iron category is a cyclical style driven business. Industry trade estimates place the total market dollar volume growth for this category at approximately 3 percent over the last three years. We continue to add life to this category and additional margin through higher price points by offering numerous performance updates including ceramic elements, higher wattages and pulse heat, and variable rheostat controls for faster heat-up and more precise heat applications. High powered hot air thermal brushes which combine curling brush and hair dryer in one appliance were a top seller in this category. Ceramic hair straighteners continue to grow as an industry category as the straight-hair, sleek-with-a-shine look has gained prominence in the fashion and entertainment industries. Specialty crimpers and wavers have also shown signs of growth. Over the year, we showed gains in market share in this group. Revlon®, Sunbeam®, Vidal Sassoon®, Hot Tools®, Wigo®, and Wave Rage™ were key brands in this group.
•		Hair Dryers. Hair dryers that offer consumers styling versatility continue to be an important product category in our business. The category is subject to aggressive price competition at entry level price points. The retail market for this group, while still the largest of our product categories has been decreasing. Industry trade estimates place the total market volume growth as trending down approximately 2 percent over the last three years. Innovation has helped us to thrive in this category and perform against the general trend. We were the first to market with Ionic hair dryers. Ionic dryers dry rapidly while leaving hair softer and shinier compared with standard dryers. We have extended our price points, increased volume and broadened the appeal of this category by including nice value added touches such as volumizers, hair pik, and concentrator attachments which allow for more precision styling. Additionally, professional-styles with more powerful AC motors and heavier duty cords and construction are gaining popularity with the retail consumer. Revlon®, Sunbeam®, Vidal Sassoon®, Hot Tools®, Wigo®, and Wave Rage™ were key brands in this group.
•		Electronic Clippers and Trimmers. Increasing popularity of facial hair has picked up the pace of growth in our clippers and trimmers business. The focus of numerous infomercials on this product group has helped to fuel sales. Industry trade estimates place the total dollar volume market growth over the last three years at over 12 percent with most of this growth occurring last year. While we expect that overall market sales in this group will level out over the coming year, we are a relatively new entrant to the market, and expect to see continuing sales growth in our offerings for the category. Vidal Sassoon® and Sunbeam® were key brands in this group.

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•		Massagers and Wellness Products. This category includes hand held massagers, cushion massagers, foot spas, home spa facial and manicure appliances, paraffin baths, and spa care gift sets. The overall size of the Massager and Wellness market is about one half of the personal hair care market. The massager market was trending down over the previous three years, driven by lower retail unit prices but showed new signs of life in calendar 2003. Industry trade estimates place the total market growth overall as down approximately 3 percent over the last three years, but overall dollar volumes were up 16 percent in the latest calendar year with higher end cushioned and heated back and body massagers leading the growth. Another key trend is the health, fitness, and wellness movement which is being helped with the addition of technology to the group. Given the size of this market, we believe there are opportunities to leverage our core competencies of innovation and speed to market to create additional sales growth for Helen of Troy. During fiscal 2004, we embarked on a new product development initiative that resulted in a combined share growth for our wellness and massager brands of 26.3 percent in our served market segments. For fiscal 2005 and beyond, we plan to build on our successes by continuing to track the consumer and retail landscape to develop and offer unique and innovative solutions for our customers. Revlon® and Dr. Scholl’s® were key brands in this group.
•		Grooming, Skin Care, and Hair Products. We are a new entrant into this market. In October of 2002 we formed Idelle Labs to revive and energize trusted brand names in our recently acquired Men’s Grooming, Skin Care, and Hair Care portfolio. We are focused on aggressively growing the Vitalis®, Sea Breeze®, Ammens®, Condition 3-in-1®, Final Net®, and Vitapointe® product franchises. Our key strategies are to bring growth to these brands through increased investment in consumer advertising and customer promotion. Focusing in the near term on launching complementary, innovative extensions, we are also developing new product lines based on our consumer insights. These brands are contributing positive sales growth momentum to our family of products.
		During September of 2003, we also acquired the rights to produce and distribute the Brut® men’s grooming product line throughout the Western Hemisphere. Fiscal 2004 operations contain five months of Brut® sales.
•		Brushes, Combs, and Accessories. This very traditional category of our business was down 4 percent in total dollar volume in fiscal 2004. With the trend towards straighter, cleaner hair styles, the accessory business has suffered. In order to combat the general trend in this market, we are looking to new technologies such as ceramic brushes, Ionic brushes and Ion-ceramic brushes to capitalize on grooming trends. If successful, these will not only bring back volume, but we believe will allow us to sell at higher price points. Vidal Sassoon product packaging is also being refreshed for greater eye appeal and ease of consumer shopping. Finally, an expanded broad advertising program from a key licensor, Revlon will benefit brand awareness for our Revlon® grooming products in fiscal 2005.
•		Hairsetters. This is an older technology that tends to be cyclical and is not seeing much current consumer emphasis due to fashion trending toward straighter hair. Retailers continue to de-emphasize this category to make display space for newer more exciting hair-styling products. In fiscal 2004, our business in this group continued to trend down. Revlon®, Vidal Sassoon®, and Wave Rage™ were key brands in this group.

In addition to the above activities, we continued to pursue the following activities to strengthen our business, and lay the foundation for significant future growth, both o