Second quarter net sales at Lifetime Brands were down slightly as company officials said the results were in line with previously announced expectations.
For the three-month period ended June 30, consolidated net sales were $118.1 million, as compared to consolidated net sales of $120.9 million in the corresponding period in 2015. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated year-over-year net sales decreased 1.4%.
Net loss was $1.2 million, or $0.08 per diluted share, as compared to a net loss of $1.7 million, or $0.12 per diluted share, in the corresponding period in 2015. Adjusted net income was $0.1 million, or $0.01 per diluted share, as compared to adjusted net loss of $0.6 million, or $0.04 per diluted share, in the corresponding period in 2015.
“As we previously have noted, Lifetime’s business is heavily weighted to the second half of the year. Our results for this quarter generally were in line with our expectations,” said Jeffrey Siegel, Lifetime’s chairman and CEO. “As of now, we foresee a healthy holiday shopping season and expect top line growth in the second half of the year.”
Siegel said the company has commenced the implementation phase of a restructuring plan that was initiated earlier this year with the assistance of an international consulting firm to right size Lifetime’s SG&A expense base, realign the company’s operating structure and improve the efficiency of operating activities.
“We are confident that we are on track to achieve significant efficiencies that will be reflected in our operating results beginning in 2017,” he said.
For the first six months of 2016, consolidated net sales were $229 million, as compared to consolidated net sales of $238.6 million for the corresponding period in 2015. In constant currency, consolidated net sales decreased 3.1%. Loss from operations was $5.5 million, as compared to a loss of $3.2 million, for the corresponding period in 2015. Net loss was $5.5 million, or $0.39 per diluted share, as compared to a loss of $3.8 million, or $0.28 per diluted share, in the 2015 period.
Siegel said the company is also closely watching the impact of the Brexit referendum, as Lifetime Brands’ United Kingdom subsidiaries— Creative Tops and Kitchen Craft— represent approximately 19% of Lifetime’s consolidated net sales.
“Through this year, we expect any such effects to be modest, as Creative Tops and Kitchen Craft were able to hedge their anticipated U.S. dollar purchases through the end of 2016,” he said. “Moreover, by relying on Lifetime’s global sourcing infrastructure, Creative Tops and Kitchen Craft should be able to source products on better terms than their smaller competitors. Longer term, a prolonged decline in the value of the British pound would increase the cost of imports into the U.K. and could negatively affect the translation of financial results into U.S. dollars.”