Libbey Inc. reported a sales decline in its third quarter, pointing to the impact of the hurricanes as well as a competitive and challenging market.
In its third quarter, Libbey reported overall net sales of $187.3 million, down 4.8% versus the prior year, or down 6.2% in constant currency. The company reported a net loss of $78.8 million, down from $81.7 million versus the prior year. The loss was driven by a $79.7 million non-cash goodwill impairment charge associated with the Latin America segment, the company said.
The company reported that hurricane and earthquake events during the third quarter resulted in a combined negative revenue impact of approximately $4 million in the U.S., Canada and Latin America segments. Net sales in the U.S. and Canada segment declined 4.3%, driven by softer sales in the food service and retail channels, which were down 6.3% and 3.5%, respectively. U.S. and Canada business-to-business net sales were flat versus prior year.
In Latin America, net sales declined as a result of lower net sales in the business-to-business and retail channels, primarily due to lower volume that was partially offset by favorable price and mix, as well as growth in the food service channel. Net sales in the EMEA segment were favorably impacted by increased volumes in the business-to-business channel and favorable price and mix in the segment.
“Competitive pressures and challenging market conditions, as well as a handful of unusual weather-related events and natural disasters, hindered our performance during the quarter. However, the improvements we expected to drive performance in the second half, such as improved profitability in EMEA and the launch of our e-commerce capabilities, began to materialize in the third quarter, and we look for them to contribute to a stronger fourth quarter. Teams across our business are actively working to leverage our e-commerce capabilities and new product offerings to return the company to profitable growth,” said William Foley, CEO, Libbey.
Foley added, “Looking to the fourth quarter, we are anticipating year-over-year revenue growth, with growing sales contributions coming from the combined impact of new products as well as our new e-commerce platform. We expect these positive trends to continue into 2018, along with sustained improvement in the performance of our manufacturing operations.”