Earnings call transcript: Lifetime Brands Q2 2025 sees widening losses

Lifetime Brands Inc. reported a second-quarter net loss of $39.7 million, widening from $18.2 million a year earlier, as the company faced a challenging retail environment and tariff-related disruptions. The company posted an earnings per share (EPS) loss of $1.83, significantly missing the forecasted EPS of -$0.12. Revenue also fell short of expectations, coming in at $131.9 million versus the forecasted $139.7 million. Following the earnings release, Lifetime Brands’ stock declined 6.94% in pre-market trading, reflecting investor concerns over the company’s financial performance and market conditions. According to InvestingPro data, the company maintains a healthy current ratio of 2.74, with liquid assets exceeding short-term obligations, suggesting financial stability despite current headwinds.

Key Takeaways

• Lifetime Brands reported a larger-than-expected net loss in Q2 2025.
• Revenue decreased by 6.9% year-over-year, influenced by a challenging macro environment.
• The company’s stock fell by nearly 7% in pre-market trading following the earnings release.
• Cost efficiency measures are projected to save $14 million annually.
• The company is repositioning its supply chain to reduce reliance on China.

Company Performance

Lifetime Brands faced a difficult second quarter as net losses more than doubled compared to the same period last year. The company’s U.S. segment sales saw an 8.6% decline, while international sales grew by 12.4%, driven by strong performance in the UK and Europe. Despite the sales decline, the gross margin remained stable at 38.6%. The company continues to focus on cost efficiency and supply chain diversification to navigate the challenging retail landscape.

Financial Highlights

• Revenue: $131.9 million, down 6.9% year-over-year
• Net loss: $39.7 million, compared to $18.2 million in Q2 2024
• EPS: -$1.83, missing the forecast of -$0.12
• Gross margin: 38.6%, stable from the previous year
• Liquidity: $97 million in cash and credit facility availability

Earnings vs. Forecast

Lifetime Brands missed its earnings expectations with an EPS of -$1.83 versus the forecasted -$0.12, resulting in an EPS surprise of -316.67%. Revenue also fell short, at $131.9 million against the forecasted $139.7 million, reflecting a revenue surprise of -5.58%. These misses highlight the challenges the company faced during the quarter, including tariff-related disruptions and a tough macroeconomic environment.

Market Reaction

In response to the earnings announcement, Lifetime Brands’ stock dropped 6.94% in pre-market trading, with the last closing price recorded at $4.18. The stock’s decline reflects investor concerns over the company’s widening losses and the broader challenges in the retail sector. The current stock price is near its 52-week low of $2.89, indicating a cautious market sentiment. InvestingPro analysis suggests the stock is currently undervalued, trading at just 0.4 times book value. With a beta of 1.62, the stock shows higher volatility than the broader market, presenting both risks and opportunities for investors. Subscribers to InvestingPro can access detailed Fair Value analysis and 10 additional ProTips to make informed investment decisions.

Outlook & Guidance

While Lifetime Brands did not provide specific financial guidance, the company anticipates a stronger performance in the second half of 2025. Pricing increases are planned for the third quarter, and the company remains focused on international growth and cost optimization. The strategic shift to produce 80% of goods outside China by year-end is expected to mitigate some supply chain risks. Despite current challenges, InvestingPro data shows the company has maintained dividend payments for 15 consecutive years, with a current dividend yield of 4.07%. The company’s strong free cash flow yield suggests potential for operational improvement. For comprehensive analysis of Lifetime Brands and 1,400+ other stocks, including detailed Pro Research Reports, consider an InvestingPro subscription.

Executive Commentary

CEO Rob Kay commented, "We have a solid foundation, a healthy balance sheet, and a clear operational road map." He also noted that the extreme conditions faced in the second quarter are largely mitigated as of now. Kay acknowledged the uncertainty in the market, stating, "Visibility, at least right now, was rather poor, and we didn’t want to resume with this much uncertainty."

Risks and Challenges

• Tariff-related disruptions continue to impact shipping and costs.
• The macroeconomic environment remains challenging for retail and e-commerce.
• Supply chain diversification efforts may face execution risks.
• Potential volume impacts from planned pricing increases.
• Increased distribution expenses could pressure margins.

Q&A

During the earnings call, analysts inquired about the company’s pricing strategy and its potential impact on volumes. The management addressed delays in the Dollar General program and discussed increasing distribution expenses. Additionally, the company noted that price elasticity for low-cost products remains minimal, suggesting limited impact on demand from price hikes.

Full transcript - Lifetime Brands Inc (LCUT) Q2 2025:

Conference Operator: I would now like to introduce your host for today’s conference, Jamie Kirchen. Mr.

Kirchen, you may begin.

Jamie Kirchen, Investor Relations, Lifetime Brands: Good morning, and thank you for joining Lifetime Brands’ second quarter twenty twenty five earnings call. With us today from management are Rob Kay, Chief Executive Officer and Larry Winoker, Chief Financial Officer. Before we begin the call, I’d like to remind you that our remarks this morning may contain forward looking statements that relate to the future performance of the company, and these statements are intended to qualify for the safe harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance and factors that could influence our results are highlighted in our earnings release and other factors are contained in our filings with the Securities and Exchange Commission. Such statements are based upon information available to the company as of the date hereof and are subject to change for future development.

Except as required by law, the company does not undertake any obligation to update such statements. Our remarks this morning and in our earnings release also contain non GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in such release is a reconciliation of these non GAAP financial measures with the comparable financial measures calculated in accordance with GAAP. With that introduction, I’d like to turn the call over to Rob Kay. Please go ahead, Rob.

Rob Kay, Chief Executive Officer, Lifetime Brands: Thank you, and good morning. The second quarter presented a number of challenges, some anticipated and others that emerged quickly. I’ll start by discussing how we have best mitigated the challenges, the impact on the second quarter. And before I turn the call over to Larry, I’ll speak at a high level on our expectations for the third quarter. Despite the dynamic macro environment, we have and will remain focused on execution and positioning Lifetime to emerge stronger over the medium and long term.

During our first quarter call, I walked through the proactive steps we’ve taken over the past two years to stay ahead of evolving U. S. Trade policy. This includes shifting parts of our manufacturing footprint outside of China, acquiring and now expanding our facility in Mexico, and diversifying sourcing across key geographies like Vietnam, Cambodia, India and other parts of Southeast Asia. Thanks to the proactive steps we have taken, we’re well positioned to manage ongoing tariff related uncertainty.

That said, our second quarter results were not immune to near term macro headwinds tied to the evolving trade environment. This was driven by meaningful swings in tariff rates across many geographies that caused a temporary stoppage of shipping until more clarity emerged. These changes led to unplanned shipment delays, particularly with key accounts in ecommerce and club channels. That pressure was most acutely felt in our top line, which declined approximately $10,000,000 year over year. We see this as mostly an unusual event as in response to the tariff environment, particularly the uncertainty and magnitude of Liberation Day and the 145% China tariffs imposed in April, many of our customers and Lifetime halted shipments and delayed orders, which directly affected our second quarter performance.

With the easing of these measures by the May, we have seen a normalization of shipment cadence by the beginning of the third quarter. Some of the shipments that were delayed during this period have been rescheduled for the second half of this year, while a portion will not resume until 2026. While we undoubtedly experienced headwinds in the club and e commerce channels, we did benefit from strong gains in cutlery, kitchen measurement and continued growth in our international business, which helped offset some of the declines and underscores our strategically diversified platform. Speaking to the strength of our diversified platform, I want to take a moment to remind investors that we meet consumers where they shop across a wide range of channels. This intentional diversification helps ensure we’re not overly reliant on any single outlet, which we view as a key strategic advantage.

As part of our response, we acted quickly introducing targeted pricing adjustments, implementing structural cost reductions and moving forward with our previously outlined resourcing strategy as we move swiftly on the price increases. As mentioned previously, Lifetime put a temporary and additional pause on some shipments. We view this as a necessary tariff mitigation technique, temporarily impacting shipments as we fully implemented these price increases. As of today, we have completed our intended targeting actions related to the current tariff environment. What’s more important and what we are choosing to focus on is what we can control.

Noteworthy, while we saw a decline in our top line in the second quarter, our EBITDA performance remained stable. Our adjusted EBITDA was consistent with the last quarter, underlying the strength in our core operations. This was aided by the actions I referred to a moment ago, including cost efficiency actions, which amount to over $14,000,000 on an annualized basis. Cash flow from operations exceeded $25,000,000 year to date, and liquidity remains strong with over $90,000,000 on hand to support both near term needs and longer term strategic initiatives. We also continue to see traction where our investments are aligned with market opportunity.

International markets, especially Europe, delivered another quarter of growth. Cutlery was supported by new product introductions and performed well with continued gains in market share, and innovation remains central to our category approach. The response to Build A Board, for example, is a reminder of our ability to identify trends and bring compelling ideas to market at scale. Turning to some segment highlights. In addition to Build Aboard, we continue to see growth in areas such as our Tailor division, particularly in Kitchen and Weather Measurement, our Fred product line of unique gift and accessory items, and our international business, which had another quarter of growth driven by e commerce and a continued push into national accounts.

As I mentioned, on the supply chain front, we remain on track to have the capability to move 80% of production outside of China by year end, with new partnerships and capacity ramping up in North America and throughout Southeast Asia. This is a fundamental repositioning of our sourcing footprint, not a short term hedge. It enhances flexibility, improves cost efficiency, and materially reduces exposure to tariff volatility. Turning to potential M and A activity. We’ve seen a meaningful pickup in unsolicited inbound interest driven in part by financial pressure on many industry players.

While it’s still early, we are actively evaluating several highly attractive opportunities. We plan to share more here in the coming weeks as our diligence progresses. Looking ahead, while we remain cautious on the broader demand environment, we believe the second half will be stronger as pricing resets, shipments resume and our cost base reflects the full benefit of our early decisions. We continue to make strides in our international business and will continue to report on our progress as we work through the second half of this year. In summary, this was a tough quarter, but not a surprising one and not one that changes our longer term view.

We have a solid foundation, a healthy balance sheet and a clear operational road map. We’re confident in our ability to manage through this period and create long term value for all stakeholders. As discussed above, we view the extreme conditions in the second quarter to be largely mitigated as of today. Based upon this environment, we see a notable portion of the revenue impact from our second quarter as not indicative of the rest of the year, which without additional macro driven impacts should have a more normalized demand from our retail customers based on listings and market share. With that, I’ll turn it over to Larry to walk through the financials.

Larry Winoker, Chief Financial Officer, Lifetime Brands: Thanks, Rob. As we reported this morning, net loss for the 2025 was $39,700,000 or $1.83 per diluted share as compared to $18,200,000 loss or $0.85 per diluted share in the 2024. The net loss in the current period includes noncash goodwill impairment charge of $33,200,000 related to The U. S. Segment.

The net loss for the prior period included a noncash charge of $14,200,000 due to the company’s loss of significant influence in its equity investment in Grupo Vasconia. Adjusted net loss was $10,900,000 for the second quarter or $0.50 per diluted share compared to $600,000 or $03 per diluted share in 2024. Loss from operations was $37,200,000 in the second quarter as compared to income from operations of $1,200,000 in the 2024 period. Loss from operations for the current period included a noncash goodwill impairment charge of $3,233,200,000.0 dollars related to The U. S.

Segment. As of 06/30/2025, company’s goodwill balance has been reduced to zero, and therefore, we expect in the future a more consistent alignment between GAAP accounting earnings and non GAAP adjusted earnings. Adjusted income from operations for the second quarter was $900,000 compared to $5,600,000 in the 2024 period. Adjusted EBITDA for the trailing twelve month period ended 06/30/2025, was 50,700,000.0 Adjusted net loss, adjusted income from operations and adjusted EBITDA are non GAAP financial measures, which are reconciled to our GAAP financial measure in the earnings release. Following comments for the second quarter or for the 2025 and 2024, unless stated otherwise.

Consolidated sales declined by 6.9% to 131,900,000.0 US segment sales decreased by 8.6% to a 119,300,000. Sales were adversely affected by shipment delays, particularly due to the period in which the tariff on goods sourced from China was a 145% coupled with the liberate Liberation Day announcements. Within the segment, the major product line decreases were in home solutions and tableware, partially offset by increases in kitchenware driven by higher sales for cutlery and board products. International segment sales increased by 12.4% to $12,600,000 And excluding the impact of foreign exchange fluctuation, the increase was 6.6%, predominantly in The UK and Continental Europe. Overall, gross margin was consistent at 38.6% compared to 38.5%.

U. S. Segment gross margin increased to 39.1% from 38.7%. The improvement was driven by favorable product mix. The second quarter margin was not affected by tariffs.

International gross margin decreased to 32.536.6% due to unfavorable customer product mix. U. S. Segment distribution expenses as a percentage of goods shipped from its warehouses were 11 11 points 11% versus 9.5%. The increase was due to lower shipment volume resulting in lower absorption of fixed expenses.

Also expenses related to the implementation for the new warehouse management system and an increase in freight out expense. International segment distribution expenses as a percentage of goods shipped from its warehouses were 26.8 versus 25.1%. The increase is attributable to higher warehouse expense related to the expanded distribution in the Asia Pacific region. Selling, general and administrative expense expenses decreased by 2.1% to 37,500,000.0. US segment expenses were even with last year.

Increases in the provision for doubtful accounts and amortization related to a definite life trade name was offset by lower employee expenses, including incentive compensation. International SG and A expenses was even with prior year. Unallocated corporate expenses declined due to lower incentive compensation and lower legal expenses. The income tax rate in the current period and prior period was 6.50.3% respectively. In 02/2025, the rate differs from the federal statutory rate due to a partial valuation allowance on US deferred tax assets due to the goodwill impairment charge.

In 2024, the rate differs due to foreign losses for which no tax benefit is recognized and to the expiration of nonqualified stock options and equity based awards where the book expense exceeded tax deduction. Our balance sheet continues to be strong despite the challenges arising from high tariffs. At quarter end, our liquidity was approximately $97,000,000 which includes cash plus availability under our credit facility and receivable purchase agreement. Year to date, we have reduced net debt by $18,000,000 and our adjusted EBITDA to net debt ratio as of June 30 was 3.5 times, an improvement from the 3.6 times in March. This concludes our prepared comments.

Operator, please open the line for questions.

Conference Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the question queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. The first question comes from Anthony Lebiedzinski of Sidoti and Company. Please go ahead.

Anthony Lebiedzinski, Analyst, Sidoti and Company: Hi. Good morning, and thank you for taking the questions. So Rob, you you talked about taking up pricing in the quarter. Maybe if you could just give us some details as to give us a framework, look, how to think about pricing versus unit volumes, how that was in the second quarter, that would be helpful.

Rob Kay, Chief Executive Officer, Lifetime Brands: Sure. Hi. In the quarter, we passed through price increases. And as you might imagine, you really while it may differ know, from what you’re selling and customer account and channel, you need to really uniformly do that across the whole board. Right?

Because you can’t be selling your products in one place at a higher price and not not at another. So you have to do it uniformly. So we worked on doing that and implemented it all as of as of today. But in terms of the effective dates of those price increases, no impact on the second.

Anthony Lebiedzinski, Analyst, Sidoti and Company: Mhmm. Okay. Alright. And then, can you give us an update on on the Dolly Parton products at Dollar General? And I know you previously, you guys talked about putting in some additional brands through Dollar General.

So it would be helpful to get an update on that.

Rob Kay, Chief Executive Officer, Lifetime Brands: Anthony, one of the misses in the second quarter versus our expectations was Dollar General, where in April, when tariffs skyrocketed, things were shipments were put on hold, and therefore, we didn’t ship much to Dollar General in the second quarter. Everything that didn’t ship will ship in 02/2025. The program continues to do extremely well and continues to expand versus last year. We are in discussions with launching additional brands at Dollar General, but we have not finalized anything as of today.

Anthony Lebiedzinski, Analyst, Sidoti and Company: Gotcha. Alright. And then, your international segment certainly was a nice positive in terms of the sales growth. Can you give us an update on, and may maybe Larry already had mentioned this, But as far as the operating income or loss in that segment, if you could tell us and also give us an update on Project Concord?

Rob Kay, Chief Executive Officer, Lifetime Brands: Yeah. Yeah. In general and we had to write off some inventory, which had a negative impact on international bottom line. Just as we’ve gotten through Concord, there were some excess that we wrote down, I should say. No.

No. But, you know, we’re still tracking, you know, a lot of what we’ve done in terms of cost takeout, not as easy to implement legally so in The UK as it is in The US. So a lot of the actual financial impact starts flowing through in the third quarter. So, you know, we’re we’re still on track for what we’ve been doing. You know, the big impact’s gonna be in the second half of the year financially.

And, you know, we continue to monitor closely to make sure, as I’ve said in the past, that, you know, we hit those milestones.

Anthony Lebiedzinski, Analyst, Sidoti and Company: Gotcha. Okay. And my last question before I pass it on to others. So, your distribution expenses were up 7% from last year. I think, Larry, you mentioned a new warehouse management system and a new warehouse in, APAC.

So is that is that really the the only reason, or is there anything else unusual driving those, dollar increases in terms of distribution costs? And how how do we think about this cost item, for the back half of the year?

Larry Winoker, Chief Financial Officer, Lifetime Brands: Yeah. So so, the other factor is that, you know, we talked about the, shipments that we delayed or canceled second quarter due to the tariff. That had a big impact on the warehouse warehouse club. And warehouse club business does not go through the warehouse. It goes direct, from overseas suppliers.

So, you know, when you look at sales relative to, warehouse expenses, that will be worse. But in absolute terms, you know, that’s a percentage. But in absolute terms, it’s the fact that we we mentioned. And there’s some, you there’s some a little disruption because we are going through, moving into a new warehouse and shutting down an existing one.

Rob Kay, Chief Executive Officer, Lifetime Brands: Yeah. And as we’ve talked about, we expect, you know, to be in some inefficiencies until we go live in our new warehouse, which will be in 2026, which we are completely on schedule.

Anthony Lebiedzinski, Analyst, Sidoti and Company: Terrific. Okay. Alright. Well, thank you very much, guys, and best of luck.

Rob Kay, Chief Executive Officer, Lifetime Brands: Thanks, Anthony.

Conference Operator: The next question come comes from Brian McNamara of Canaccord Genuity. Please go ahead.

Brian McNamara, Analyst, Canaccord Genuity: Good morning, guys. Thanks for taking the questions. First off, can you reasonably quantify how much sales you might have left on the table by stopping shipments and other internal actions to kind of mitigate tariffs in Q2? And what impact, if any, lingers into Q3 in the back half?

Rob Kay, Chief Executive Officer, Lifetime Brands: Yes. So the some of the big things that shifted would be some of it shifted, some of it was delayed. There’s about 30,000,000 plus related to that. There is, in terms of carryover, the only carryover that will continue for the second half of the year is that there were delays in certain programs that will cause changes of ship dates. So we are still trying to solidify shift dates of some things.

Does it slip from if, you know, if it slips from September to October, you know, really, it shifts this year. But if something may shift from December to January, obviously, that would impact this year in favor of next year. But the bulk of the as we talked about, the bulk of the disruption that we saw in the second quarter is past.

Brian McNamara, Analyst, Canaccord Genuity: K. Fair enough. Secondly, why is, I guess, guidance so difficult to provide with the improved clarity on tariffs here? We’ve heard from many other companies, even those may perhaps more exposed that have either reinstated guidance or at least updated prior outlooks.

Rob Kay, Chief Executive Officer, Lifetime Brands: Yeah. We’ve we’ve thought about it. We don’t see clear visibility. I mean, things change frequently both and, you know, a lot of the impact of the pricing increases haven’t really been felt by the consumer. We thought that, you know, visibility, at least right now, was rather poor, and, you know, we didn’t wanna resume with this much uncertainty.

You know, we will reevaluate that for next quarter, however.

Brian McNamara, Analyst, Canaccord Genuity: On your your your point on pricing, when do you think pricing actually hits the shelves? Because I I would actually agree with your standpoint across consumer for the most part.

Rob Kay, Chief Executive Officer, Lifetime Brands: There was an article today I was reading on a in a major national publication that that was talking about, hey. You start trusting it soon. So that’s their opinion. I agree with that. I also think that it wasn’t uniform.

So some stuff that you started to see immediately move was, you know, some of the bigger retailers direct import private label stuff because, right, they’re paying that. They’re passing that through quicker. Though I think many companies have absorbed a lot and delayed price increases, but that we’ve seen catching up. And we expect that to be hitting shelves in q three.

Brian McNamara, Analyst, Canaccord Genuity: And then what kind of elasticity are you guys expecting, and what products are are kinda most price sensitive?

Rob Kay, Chief Executive Officer, Lifetime Brands: Well, traditionally, there hasn’t been much impact of price increases on a lot of what we could of what we sell partly driven by, you know, the average selling prices of what we sell is pretty low. So, you know, if you take a can opener and it’s at $7 and now it’s at $8, we’ve never in the I should say, in the past, we haven’t seen any impact on volume related to that. You know, some bigger items like large dinnerware sets or tabletop, you know, would be most vulnerable on the consumer side. In the food service side, those same items are not very price sensitive. The issue you could potentially see is, you know, in a down economic time when hotels, restaurants, and the like stop a pace of capital investment, particularly new store openings or in a really bad economic environment, new store closings, that impacts their purchases of tabletop goods, but the pricing does not.

Brian McNamara, Analyst, Canaccord Genuity: Alright. Thanks very much. I’ll pass it on.

Conference Operator: This concludes our question and answer session. I would like to turn it back over to Robert Kay for closing remarks.

Rob Kay, Chief Executive Officer, Lifetime Brands: Thank you, and thank you, everyone, for tuning in for our call this quarter. We hope to keep people updated on a timely basis and look forward to speaking to people on the next call. In the interim, as always, Larry and I are available for anyone who wants to reach out. Thank you, and have a good day.

Conference Operator: Thank you. This concludes today’s conference. We thank you for your participation. You may now disconnect your lines at this time. Everyone else has left the call.

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