Lifetime Brands Posts $3M Net Loss, 19% Net Sales Gains

Lifetime Brands reaffirmed that it expects net sales for the full year to total approximately $600 million after it released its results for this year’s second quarter, ended June 30, 2014. In the second quarter, the company reported that net sales were $115.3 million, a 19% increase compared to the corresponding period in 2013.

Adjusted net loss for the company was $3.1 million, or $0.23 per diluted share in the second quarter, compared to an adjusted net loss of $1.1 million, or $0.08 per diluted share last year, the company reported.

Gross margin was $40.9 million, or 35.4%, as compared to 37.5% for the corresponding period last year. However, the company noted that improvements in gross margin from its recent acquisitions Kitchen Craft and Creative Tops are expected to offset any decline in the U.S. segment.

“During the quarter, our U.S. wholesale segment was challenged by the slow retail environment and by uneven retailer replenishment activity that did not keep pace with stronger point-of-sale performance. Wholesale gross margin in the U.S. declined during the quarter, as we moved to create opportunities to expand our market share; however, we expect to recoup a substantial portion of this decline during the balance of the year,” Jeffrey Siegel, Lifetime chairman and CEO said. 

The company reported that $16 million of net sales in Q2 were from Kitchen Craft and other acquisitions that were completed in the first quarter, the company said.

“Our international segment, comprising Creative Tops and Kitchen Craft, produced outstanding results. Creative Tops recorded a 45% organic sales growth in local currency, and we are pleased with Kitchen Craft’s performance,” Siegel noted.

Adjusted net loss for the company was $3.1 million, or $0.23 per diluted share in the second quarter, compared to an adjusted net loss of $1.1 million, or $0.08 per diluted share last year, the company reported.

“SG&A increased, reflecting the acquisition of Built NY and investments to grow our domestic business. Excluding these activities, U.S. SG&A expenses increased by approximately 3%,” Siegel said.

Highlights from the first half of 2014 include four acquisitions: Kitchen Craft, La Cafetiere, Built NY and Empire Silver. The company also introduced 4,000 new products and new brands including Bombay, Brick Oven, Debbie Meyer and Reo. Growth in international markets, such as China, has also been strong this year, with placement in 400 Walmart Supercenters in China and the addition of a Hong Kong-based sales team.

“The first half of 2014 has been a period of remarkable activity, in which we successfully executed strategic initiatives in acquisitions, brand development, channel expansion, product innovation, and geographic growth,” Siegel said.