Despite growth in its core U.S. business, Lifetime Brands reported a slight decrease in net sales for the fourth quarter of 2019. Rob Kay, company CEO, stated that operational challenges from its reorganized U.K. operations had an impact on shipments, offsetting the company’s overall results.
Consolidated net sales for the fourth quarter ended December 31, 2019, were $226.9 million, representing a decrease of $1.4 million or 0.6% as compared to $228.3 million in sales for the corresponding period in 2018. Net loss was $14.5 million, or $0.70 per diluted share, in the quarter as compared to net income of $10 million, or $0.49 per diluted share, for the corresponding period in 2018.
In the fourth quarter, the company incurred a $33.2 million non-cash goodwill impairment charge related to the U.S. reporting unit. The goodwill impairment charge resulted from, among other factors, a sustained decline in the company’s market capitalization observed in the fourth quarter of 2019.
Kay stated, “We are pleased that we continued to deliver growth in our core U.S. business, which led the company to generate significant cash flow for the fourth quarter and full year 2019; however, despite those positive achievements, our performance this quarter fell short of our expectations driven by the operational issues in our European business in the third and fourth quarters. Our core U.S. business outperformed in the fourth quarter, as a result of strong performance in both brick and mortar retail and e-commerce, which continues to represent a meaningful growth driver for Lifetime. Despite this momentum, operational challenges from our reorganized U.K. operations had an impact on shipments, which offset the company’s overall results.”
For the full fiscal year, net sales were $734.9 million, an increase of $30.4 million, or 4.3%, as compared to consolidated net sales of $704.5 million for the corresponding period in 2018. Net loss was $44.4 million, or $2.16 per diluted share, in the year as compared to net loss of $1.7 million, or $0.09 per diluted share, in the corresponding period in 2018.
Kay said that despite the challenging fourth quarter, he noted that early results in 2020 were positive, reflecting both a normalization of customer order behavior and promising performance for some new products.
Kay added, “As we look ahead toward fiscal 2020, we are confident that we have the right plan in place to stabilize our international business, which we expect will enable us to continue advancing our strategy and ensuring that our business remains on track to capture the market opportunity and drive value for our shareholders. Specifically, as of January 2020, we believe we have addressed the operational issues in our European operations and are back to normal on-time deliveries. As we look forward to 2020, we are pleased with our first quarter results for which we have not seen any noticeable impact from the coronavirus outbreak.”