Lower than anticipated reorders from the U.S. e-commerce channel and a decrease in sales at brick-and-mortar stores were key factors in lower than expected fourth quarter sales at Hamilton Beach Brands.
Total company revenue for the quarter ended December 31 was $241.7 million, down from revenue of $265.8 million in the fourth quarter of the prior year. Net income, however, grew to $15 million from $13.8 million in the fourth quarter of 2017. Diluted earnings per share were $1.09 up from $1.01 the prior year.
Figures include combined revenue of the company’s Hamilton Beach and Kitchen Collection divisions.
Within the Hamilton Beach division, total quarterly sales were $200 million, down 9% year-over-year. Operating profit was $17.7 million, down from an operating profit of $26.5 million in the comparable quarter the previous year.
Company officials said that the revenue decline was the result of lower sales volume in the U.S. market. The reduced volume was due to lower than anticipated reorders in the U.S. e-commerce channel as well as decreased sales by a number of retailers at brick-and-mortar stores.
The decrease in operating profit in the fourth quarter of 2018 was primarily attributable to the lower revenue and, to a lesser extent, higher consumer advertising, transportation and warehousing expenses. Higher product costs were mitigated by higher selling prices that were implemented throughout the year, Hamilton Beach officials said.
Fourth quarter sales at Kitchen Collection were $42.7 million, down from sales of $47.3 million in the fourth quarter of the prior year.
On a full year basis, company-wide sales were $743.2 million, up from sales of $740.7 million in the previous fiscal year. Net income for the year was $21.8 million, or $1.59 per diluted share, up from net income of $17.9 million, or $1.31 per diluted share, in the previous fiscal year.
In 2019, the company expects a modest increase in revenue in the Hamilton Beach division with a continued focus on new consumer and commercial products. In addition, the company said it would continue to grow products in its “only-the-best” brands that include Wolf Gourmet, Weston, Hamilton Beach Pro and Chi lines.