Lifetime Brands Net Sales Down 4.8% in 2016 First Quarter
Lifetime Brands, Inc. recently reported its financial results for the first quarter ending March 31, 2016.
Lifetime Brands, Inc. recently reported its financial results for the first quarter ending March 31, 2016. Consolidated net sales were $110.9 million, compared to consolidated net sales of $117.7 million for the first quarter of 2015. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales decreased 4.8% compared to the first quarter last year. Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) was $0.3 million, compared to $2.5 million for the corresponding 2015 period.
Gross margin was $40.6 million, or 36.6%, vs. $44.9 million, or 38.2%, in the first quarter of 2015. Loss from operations was $5.2 million, compared to a loss of $2.2 million in 2015. The net loss was $4.3 million, or $0.31 per diluted share, compared to a net loss of $2.1 million, or $0.15 per diluted share, in the corresponding period in 2015. The adjusted net loss was $3.4 million, or $0.24 per diluted share, compared to a loss of $1.9 million, or $0.14 per diluted share, last year. Equity in losses, net of taxes, was $150 thousand, compared to equity in earnings, net of taxes of $288,000 in the first quarter of 2015.
“While the quarter’s results were below those of last year’s first quarter, as always is the case for us, we expect our projected top line growth and margin improvement to come in the third and fourth quarters,” said Jeffrey Siegel, chairman and CEO. “The sales decrease in the quarter primarily was attributable to an inventory rationalization strategy at a major U.S. retailer. While this had an unfavorable impact in the quarter, for the full year, we expect to be a net beneficiary based on an expansion of our assortment and increased store count. Sales also declined in our international segment, primarily due to foreign currency translation.
“During the quarter, we saw strong success with Farberware Colourworks®, a comprehensive line of kitchen tools, gadgets, cutlery, and pantryware that features vibrant colors and contemporary styling. It is our first line specifically targeted toward millennials, and was influenced by the very successful Colourworks collection at our UK subsidiary Kitchen Craft. This is an excellent example of the synergies we can achieve through different geographical sides of Lifetime’s business, which will become an increasingly important factor in our success this fall and in coming years. We also had great success with initial shipments of our patent pending Edgekeeper™ technology which enables a knife to be sharpened every time it is removed from its sheath. After testing, several major retailers have committed to rolling out this line this fall.
“In April, we acquired the brands, product portfolio and certain other assets of Wilton Armetale, a long-established supplier of fine serveware and grillware to department stores and specialty stores in the U.S. and internationally. They are an excellent addition to our existing brands of fine serving accessories and we are pleased to add them to Lifetime’s robust portfolio.
“This year, we are taking decisive steps to enhance Lifetime’s ability to achieve its ambitious growth plans. These include implementing the recommendations of the first phase of the comprehensive review of Lifetime’s U.S. wholesale businesses that we began in the fourth quarter of 2015, with the assistance of a major international consulting firm, to make certain that we have the right structure to grow and prosper in today’s evolving retail market.
“Based on the study’s initial findings, we already have made several structural changes in our U.S. Wholesale divisions. We also embarked on the study’s second phase, focused on specific actions to enhance the management of our product pipeline and brand portfolio and to rationalize SKUs and SG&A spending. The initial findings from the second phase of this review are coming in, and we look forward to acting on the initiatives, which we expect will help us increase our efficiency, effectiveness and, most importantly, our profitability.
“Based on current trends, we expect 2016 consolidated net sales to increase approximately 3%, excluding any impact of foreign currencies, and gross margin to increase approximately 50 basis points.”
For more information, visit www.lifetimebrands.com.