In its third quarter, Hamilton Beach reported that the U.S. consumer market remained strong while shipping capabilities were strained.
Net loss in the third quarter was $2 million, or $0.15 per diluted share, compared to net income of $0.6 million, or $0.04 per diluted share in the previous third quarter.
Revenue was $110.5 million compared to $149.5 million. As expected, sales volumes in the international consumer and global commercial markets decreased as a result of pandemic-driven demand softness. Also as expected, sales volumes in the Canada consumer market increased.
In the U.S. consumer market, while unprecedented demand continued, sales volumes were lower than expected primarily due to timing of revenue that is expected to shift to the fourth quarter of 2020 as the result of greater than expected challenges arising from the implementation of a new enterprise resource planning (ERP) system, the company said. The cutover to the new ERP system temporarily reduced shipping capabilities at the company’s U.S. distribution center. Shipping capabilities also were adversely affected by unanticipated constraints in the transportation industry, the company said.
The company said it has enhanced its shipping capabilities by adding warehouse personnel and lift equipment, extending shifts and augmenting capacity with temporary third-party facilities. The company also has been able to convert some of the order volume with its largest retail customers to direct import to further ease the strain on its shipping capabilities.
Strong demand for small kitchen appliances during the pandemic continues and the company entered the fourth quarter well positioned to meet customer needs with a significant backlog, strong order pipeline for the holiday selling season and the necessary inventory levels to fill orders, noted Hamilton Beach. The company has significantly increased the in-stock levels at its largest customers and sell-through rates at retail are in line with the market.