Lifetime Brands reports revenue up, profit down
New products and promotional programs boosted third-quarter revenues at Garden City-based Lifetime Brands Inc., the company said Thursday, but net income fell as a result of a drop in the market value of one of the company's foreign investments.
Sales for the kitchenware and home goods company increased to $142.2 million in the quarter that ended Sept. 30, rising 11 percent from $128.1 million in sales for the same period last year.
The introduction of new kitchenware products, wholesale programs and promotions, as well as sales from Fred & Friends, a maker of novelty housewares acquired in Dec. 2012, were primary drivers lifting sales, Lifetime chief executive Jeffrey Siegel said in a conference call with analysts.
Revenues for the company's wholesale segment rose 11.9 percent to $138.5 million, reflecting increases in both the kitchenware and home solutions categories, Siegel said. Sales of kitchenware increased by $13 million, with $4.8 million of that coming from Fred & Friends. Lifetime's home solutions business increased by almost $40 million, he said.
But the company's net income took a hit from a $5-million write-down to account for the drop in the share price of Grupo Vasconia, a Mexican housewares and aluminum company in which Lifetime has a 30 percent stake. Lifetime's net income fell to $1.1 million, or 8 cents per share, decreasing 72 percent from $3.9 million, or 30 cents per share, in the period a year earlier.
The write-down was the same amount Lifetime was required to "write up" last year, when Grupo Vasconia purchased another company and accountants determined it was a bargain purchase, Siegel said.
Lifetime's operating income for the quarter, which doesn't include the write-down, was $11.7 million, up 58 percent from the year-earlier period.
While Lifetime said it expects growth across its divisions in the fourth quarter, it lowered its sales forecast for the full year to an increase of 3 percent to 5 percent instead of the 5 percent to 7 percent growth outlook issued in August. The company attributed its changed forecast to "concerns about the overall strength of the holiday shopping season" and the types of products consumers are likely to buy.