Sales Essentially Flat for Lifetime Brands in 2015 Third Quarter
Lifetime Brands, Inc. recently reported its financial results for the third quarter ended September 30, 2015. Consolidated net sales were $163.2 million, an increase of 0.6% compared to the third quarter of 2014. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales increased 2.9%, compared to consolidated net sales in the corresponding period in 2014.
Gross margin was $57.0 million, or 34.9%, in the third quarter of 2015, compared to $57.9 million, or 35.7%, for the corresponding period in 2014. The decrease in consolidated gross margin was primarily due to the unfavorable impact of foreign currency fluctuations and a lower margin product and channel sales mix. Income from operations was $9.8 million in the third quarter of 2015, compared to $8.4 million in the corresponding period in 2014. Net income (loss) was $5.1 million, or $0.36 per diluted share in the third quarter of 2015, compared to net income (loss) of $(1.6) million, or $(0.12) per diluted share, in the corresponding period in 2014.
Adjusted net income was $5.9 million, or $0.41 per diluted share, in the third quarter of 2015, compared to $5.7 million, or $0.41 per diluted share, in the corresponding period in 2014. Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) was $14.1 million in the third quarter of 2015, compared to $16.5 million for the corresponding 2014 period.
“The strong performance of Lifetime’s U.S. wholesale business in the third quarter was partially offset by the impact of foreign currency exchange rate fluctuations, which reduced reported net sales by approximately $3.6 million or 2.3% year-over-year,” Jeffrey Siegel, chairman and CEO. “The depreciation of the British pound, the Canadian dollar, the Mexican peso and the Brazilian real against the U.S. dollar decreased gross margins at our UK subsidiaries and our partner companies in Canada, Mexico and Brazil by increasing their costs of goods imported from Asia, where purchases are denominated in U.S. dollars, and hurt sales due to higher prices being passed along to customers and consumers. Moreover, these exchange rate fluctuations produce unfavorable comparisons when the results of our non-U.S. business are translated into U.S. dollars. Our U.S. business remains strong, and we continue to expect growth in both sales and margins in the fourth quarter, which should benefit from strong holiday shipments. As a result, we are revising our guidance for full-year 2015 results. We now foresee reported net sales to increase 2% to 3% year-over-year. We expect our operating margin to be in the range of 4.0 to 4.5%.”
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