Lifetime Brands' 4Q, 2011 profits fall
Chief executive Jeffrey Siegel, in Lifetime’s Garden City showroom, says low- and middle-income consumers were not in much of a buying mood for discretionary decor items, “and that business has suffered.” (Nov. 16, 2010) Credit: Danny Ghitis, 2010
Garden City-based Lifetime Brands Inc. Thursday reported that fourth-quarter and annual profits fell, hit by weak consumer demand for nonessential products like home decor items and by expenses from two acquisitions.
The home goods company, whose brands include Farberware, Mikasa and Cuisinart, earned $5.4 million, or 43 cents per share, in the quarter ended Dec. 31 -- a 61 percent drop from profit of $13.9 million, or $1.07 per share, in the same period in 2010. Net sales for the fourth quarter decreased 3.5 percent from the same period a year earlier to $137.6 million.
Income for 2011 was $14.1 million, or $1.12 per share, a decline of 44 percent from the $20.3 million, or $1.64 per share, earned in 2010. Net sales for 2011 rose a scant 0.3 percent, to $444.4 million from $443.2 million in 2010.
Low- and middle-income consumers had little to spend on discretionary purchases such as home decor items, said Jeffrey Siegel, Lifetime chief executive. The company's home decor items include wall decorations, photo frames and candle holders. Those consumers, Siegel said during a conference call, decided they didn't need "that extra thing to hang on a wall or put on a table, and that business has suffered."
Net sales of the company's wholesale businesses excluding kitchenware and tabletop goods, a category including home decor, fell last year to $64.1 million from $81.9 million in 2010.
However, the company's kitchenware and tabletop wholesale businesses -- which account for about 80 percent of Lifetime's consolidated net sales -- grew. Net wholesale sales of kitchenware products rose 3.5 percent to $215.7 million, the company said. Net wholesale sales of tabletop products grew by 14.5 percent to $141.3 million.
Expenses of $2 million from two acquisitions also clipped financial results in the quarter and full year, the company said. In November, Lifetime Brands acquired Creative Tops Holdings Ltd., a Corby, England-based supplier of tableware and kitchenware. In December, the company acquired a 40 percent equity interest in GS International SA, a wholesale distributor of houseware products in Brazil.
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