Company-wide third quarter sales at Hamilton Beach were down as the company pinned the decrease on lower sales volume in the U.S. and international consumer markets in its Hamilton Beach Brands segment.
Total sales for the quarter ended September 30 were $169.8 million, down from sales of $196.9 million in the comparable quarter the previous year. Net income for the quarter was $397,000, or $0.03 per diluted share, compared with net income of $8.04 million, or $0.59 per diluted share in the third quarter of 2018.
By segment, sales in the Hamilton Beach division were $150.9 million, down from sales of $172.5 million in the prior year. Sales at Kitchen Collection were $20.3 million, down from sales of $25.9 million in the comparable quarter the prior year.
According to the company, lower sales volume in the U.S. was due in part to a significant change in retailer order patterns driven by the adverse impact of tariffs.
While much of the revenue shortfall is expected to be recovered in the fourth quarter of 2019, company officials said the impact of current and pending tariffs on Hamilton Beach has become more significant.
Company officials said that as a result of tariffs, retailers are less inclined to take ownership of some inventory from the company’s suppliers in China, which has the benefit of cost savings to the retailer and earlier revenue recognition to the company.
“Retailers have increasingly opted to take ownership of inventory from the company’s U.S. warehouse, which can add up to five weeks to the date on which the company can recognize the revenue, resulting in a timing shift from the third quarter to the fourth quarter for a large amount of revenue,” company officials stated in a press release.
A previously announced, the company is closing down its Kitchen Collection retail division.