Second quarter headwinds hit Hamilton Beach, but it is adjusting the business to deal with the changing trade environment while continuing to develop its product offering, including a new premium brand dubbed Lotus.
The company reported that net income was $4.5 million, or 33 cents per diluted share, compared to $6 million, or 42 cents per diluted share, in the year-earlier quarter. Total revenue came in at $127.8 million versus $156.2 million in the year-before period.
The company attributed the revenue decline primarily to lower volumes in its U.S. Consumer business, as some retailers paused buying in the second quarter to assess inventory levels and price increases flowing from the April tariffs implemented by the United States. Although many retailers have resumed buying, the future tariff-related effects on consumer demand remain uncertain, Hamilton Beach noted.
Operating profit was $5.9 million compared to $10 million in the year-previous quarter.
In a conference call, R. Scott Tidey, Hamilton Beach president and CEO, said, “After having a strong 2024 and a good start to the year, the second quarter was marked by a dramatic shift in global trade as the U.S. implemented higher tariffs on imports from most countries in early April. This included a 145% increase in all Chinese exports, which created significant market disruption as purchases were temporarily halted across the industry. At the same time, the U.S. and China worked towards a longer-term agreement. As the increased trade tensions played out and the headlines and the stock market sold off, retailer demand decreased further as Q2 got underway. Given this backdrop, we strategically reduced our trade advertising and promotional activities during the quarter to better align with the market conditions. While we saw purchasing patterns begin to improve following the announcement of a framework for a new China trade agreement in mid-May, our U.S. business was adversely affected throughout a large portion of the quarter. Despite these significant headwinds, I’m incredibly proud of how quickly our team mobilized to implement decisive strategic actions across several fronts at these remarkable industry challenges.”
He pointed out Hamilton Beach adjusted prices in June to deal with tariff-related cost issues, as well as seeking internal cost reductions, and continues shifting manufacturing to countries outside of China as it deals with the current trade environment.
Although Hamilton Beach did not break out U.S. Consumer segment results, in a conference call, Tidey stated that the business there faces a challenging consumer environment that extends across North America, which impacted financial results. However, he added that the Hamilton Beach core business maintained its top units position in North America despite the headwinds the housewares industry faced in the second quarter, which he called a testament to Hamilton Beach’s brand strength and consumer value proposition. He added that the company remains optimistic about the market opportunities for its core business, with key fall placements secured with big box retailers that position the company well for the upcoming holiday season. The premium business performed well in the second quarter, he maintained, and added that the Lotus brand, with such items as the Perfectionist Oven, which employs advanced convection, precision control and an integrated temperature probe, has begun rolling out to a select retailer.
Williams-Sonoma currently is offering the Lotus Professional Series Perfectionist Oven (pictured above), with the retail price on the retailer’s website at $799.95, as part of a brand lineup that includes toasters, a coffee maker, a griddle, a blender and other items.
Hamilton Beach stated that, as a result of the increased uncertainty caused by higher U.S. tariffs, the company believes it is prudent to maintain a recently implemented practice of not providing specific financial guidance.
