Hamilton Beach Brands Q1 2025 Earnings Report

Hamilton Beach Brands EPS Results

• Actual EPS: $0.13
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Hamilton Beach Brands Revenue Results

• Actual Revenue: $133.37 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Hamilton Beach Brands Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 4:30PM ET

Hamilton Beach Brands (NYSE:HBB) is a designer, marketer and distributor of branded small kitchen and household appliances. The company’s product portfolio spans a range of countertop and electric appliances, including blenders, mixers, toasters, coffeemakers, slow cookers, air fryers, and specialty beverage machines. Through the Hamilton Beach and Proctor-Silex brands, the company serves both everyday consumers and commercial foodservice operators.

Established in 1910, Hamilton Beach has introduced a number of innovations in small-appliance technology, from early electric drink mixers to modern immersion blenders and multi-function cookers. The company develops and sources its products through global manufacturing partnerships, leveraging proprietary motor designs and user-friendly controls to differentiate its offerings in a crowded market. Product distribution channels include mass-merchandise retailers, e-commerce platforms and foodservice equipment suppliers.

Headquartered in Glen Allen, Virginia, Hamilton Beach Brands markets its appliances across North America, with growing presence in international markets through strategic distributors. The company’s management team brings decades of experience in the consumer durable goods sector, focusing on product innovation, supply-chain efficiency and brand development. Hamilton Beach continues to invest in research and design to expand its lineup of user-centric appliances and strengthen its position in the global small-appliance industry.

Hamilton Beach Brands Q1 2025 Earnings Call Transcript

Key Takeaways

• Hamilton Beach reported a 4% revenue increase to $133.4 million in Q1 and achieved a $3.2 million improvement in operating profit driven by stronger North America consumer sales and higher-margin segments.
• Reciprocal tariffs on Chinese imports surged to 145% in April, creating near-term visibility challenges and leading the company to raise prices, pre-buy inventory and accelerate sourcing diversification outside China.
• Premium brands delivered mid-single-digit growth led by NuMilk and Qi, offsetting the planned wind-down of the Wolf Gourmet license and setting up the launch of the new Lotus premium line with seven products later this year.
• Hamilton Beach Health posted its third consecutive quarter of patient subscription growth and contributed $1.5 million in Q1 revenue, with a new partnership with OptumHealth launching later this quarter to boost its high-margin healthcare segment.
• The company achieved mid-single-digit e-commerce growth in Q1, with roughly 40% of U.S. consumer sales now coming via online channels as part of its digital transformation strategy.

Presentation

[Operator]

Thank you for standing by. At this time, I would like to welcome everyone to today's Hamilton Beach Brands First Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. If you'd like to withdraw your question, simply press star one again. Without further ado, I would like to turn the call over to Brendan Frey, partner with ICR. Brendan, you have the floor.

[Brendan Frey, Managing Director at ICR]

Thank you, Greg. Good afternoon, everyone, and welcome to the First Quarter 2025 Earnings Conference Call and webcast for Hamilton Beach Brands. Earlier today, after the stock market closed, we issued our First Quarter 2025 earnings release, which is available on our corporate website. Our speakers for today are Scott Tidey, President and CEO, and Sally Cunningham, Senior Vice President, Chief Financial Officer, and Treasurer. Our presentation today includes forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in either our prepared remarks or during the Q&A. Additional information regarding these risks and uncertainties is available in our 10-Q, our earnings release, and our annual report on Form 10-K for the year ended December 31st, 2024.

[Brendan Frey, Managing Director at ICR]

The company disclaims any obligation to update these forward-looking statements, which may not be updated until our quarterly conference call, our next quarterly conference call, if at all. The company will also discuss certain non-GAAP measures. Reconciliation for Regulation G purposes can be found in our earnings release. I'll now turn the call over to Scott. Scott.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Thank you, Brendan, and good afternoon, everyone. Thank you for joining us today. The year got off to a good start with first-quarter sales and operating profit, both showing solid improvement despite increasing macroeconomic headwinds. We entered 2025 with good momentum following a successful holiday season, and we were able to maintain our positive trajectory over the first three months. Our top-line performance was led by our North America consumer business, driven by demand for our mass-market brands. Increased penetration from higher-margin businesses, such as premium and healthcare, helped fuel another healthy gain in gross margins year over year, which, along with lower operating costs, resulted in a $3.2 million improvement in operating profit. We are pleased with our overall first-quarter results. As we exited March, we were on track to achieve the full-year guidance we provided on our Q4 call in late February, even as the U.S.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Imposed 20% tariffs on all Chinese imports. With the reciprocal tariffs levied against us, levied against all trade partners in April, and the increase in China tariffs to 145%, visibility into near-term trends has become much more challenging. We are taking actions to mitigate the impact of higher tariffs, which Sally and I will speak to later in the call, but these will take time to flow through our supply chain and income statement. While I expect the next few quarters to be difficult for the industry, we are confident in our ability to navigate these headwinds and emerge with our leading market position intact. In the meantime, we continue to execute against our six strategic initiatives, which serve as the blueprint for driving long-term growth and shareholder value for Hamilton Beach Brands.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

These strategies include driving core growth, gaining share in the premium market, leading in the global commercial market, accelerating growth of Hamilton Beach Health, accelerating our digital transformation, and leveraging partnerships and acquisitions. I'll now take a few minutes to highlight some of the recent drivers behind the advancements of these strategies, starting with the drivers of core brand growth in the first quarter. Hamilton Beach Brands' sales were up modestly compared to the first quarter of 2024, as we take advantage of positive eating and entertaining at home trends. Our success was driven largely by the growth of our U.S. consumer and Latin America businesses. We were also pleased to see continued market share gain of the Hamilton Beach Brand in Mexico this quarter.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

In the U.S., we continue to make progress, expanding our reach, and expect to benefit from key big-box store placement wins in the back half of the year, which should help drive further penetration of our core business in 2020. Turning to our premium business, our powerful portfolio of premium-owned and licensed small appliance brands collectively delivered mid-single-digit growth in Q1, driven largely by exceptional growth in both our Numilk and CHI brand products, as consumers continue to react positively to our new products introduced over the past year. Numilk plant-based milk makers continue to gain traction among health-conscious consumers who value creating fresh, preservative-free alternatives on demand, aligning perfectly with current trends towards healthier and more sustainable options. We also saw continued success with our CHI iron in the first quarter, highlighted by a successful partnership with one of the largest club stores in North America.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

These performances were partially offset by the planned wind-down of our licensing agreement with Wolf Gourmet. While this will be a temporary drag on results, we are excited about the launch of Lotus, our new-owned premium brand in the back half of this year. Lotus will be the premium small kitchen appliance brand for home cooks with big culinary ambition. At launch, the brand will introduce seven new Lotus professional products, including the Perfectionist Air Fry and Convection Oven, the Top Drip Coffee Maker and Ground Scale, and the Four Slice Precision Toaster. This full range will position us to take share in the nearly $4 billion total addressable premium market. The response from specialty retailers to this new line of sleek, innovative small appliances has been very positive so far. Looking ahead, we plan to expand offerings under Lotus in 2026 with three new introductions under the Signature line.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Turning now to our commercial business, along with the strong demand for our Signature products like the Summit Edge blender, we continue to evaluate new opportunities for potential partnerships in the global commercial market. To this end, we signed a new agreement with Sunkist to develop and market Sunkist-branded commercial juicers and sectionizers which are used in leading restaurants, schools, and a large restaurant chain throughout the U.S. As we look to leverage this new opportunity, we are excited about the potential future partnership with a whole new customer base. Lastly, regarding our newest business segment, Hamilton Beach Health, we were pleased with the segment's first-quarter performance, which marked its third consecutive quarter of increasing patient subscriptions. Since acquiring HealthBeacon early last year, we've been developing healthcare management tools, including remote therapeutic monitoring systems.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

As part of our goal to grow our patient subscription base by over 50% this year, we're excited to launch with our newest specialty pharma partner, Optum Health, later this quarter. As we look forward, we remain excited about this high-margin business and the untapped potential that lies ahead. Across each of our positions, we are focused on growing through our existing distribution, while also selectively expanding our physical reach and growing our digital presence through our digital transformation efforts. This has allowed us to capitalize on the consumer shift to online shopping, with roughly 40% of the U.S. consumer sales now coming via e-commerce. I'm pleased to report that we delivered mid-single-digit e-commerce growth in the first quarter with gains across leading e-commerce retailers, our brick-and-mortar partner digital platforms, and our branded websites.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Following a solid first quarter, trends have slowed in April as our retail customers and consumers digest the tariff increases and weigh the potential impacts from ongoing negotiations. As I said earlier, we are taking actions to mitigate the impact to our cost. First, we are implementing a round of price increases in Q2 to address the first round of IEEPA tariffs. We enjoy strong relationships with our retail partners and are maintaining open dialogue as we navigate global tariff implications together. Second, we have taken proactive sourcing actions, including a pull-forward inventory purchases from suppliers in Q1 to minimize tariff impact. We have also recently certified our main distribution center as a foreign trade zone to help manage cash flow and tariff impacts. Lastly, we are accelerating our sourcing diversification, prioritizing the movement of product manufacturing based on volume and profitability.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Historically, 25% of our sales have originated outside of the U.S. and are not subject to recent tariff actions. For the remaining 75% of sales that are U.S.-based, we have already transitioned approximately 15% of our manufacturing out of China and expect to have two-thirds of our U.S. sales coming from outside of China by the end of 2025, with the remainder to be moved in the first half of next year. We are confident that these actions will positively benefit our margin profile in 2026. With that, I'll turn it over to Sally.

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Great. Thank you, Scott. Good afternoon, everyone. To echo Scott's comments, we are pleased with our start to 2025, marked by positive sales and operating profit momentum, even as macroeconomic headwinds began to strengthen in the first quarter. Starting with revenue, total revenue in the first quarter was $133.4 million, a 4% increase over last year's first quarter. The increase was driven primarily by a favorable product mix as well as higher volume, partially offset by expected average price decreases and foreign currency impacts. Regionally, our North American consumer markets delivered solid growth, with the majority of the contribution coming from the U.S. market. These gains were partially offset by slight revenue declines internationally. Also included in the first quarter was $1.5 million of revenue from our HealthBeacon business.

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Turning to gross profit and margin, gross profit was $32.8 million in the first quarter, compared to $30.1 million in the year-ago period. Gross profit margin was 24.6%, compared to 23.4% in last year's first quarter. The increase in gross profit margin in the current quarter was primarily due to favorable product mix in the period, highlighted by the addition of our higher-margin HealthBeacon business. Selling, general, and administrative expenses decreased slightly to $30.4 million, compared to $30.9 million in the first quarter of 2024. The decrease was primarily driven by HealthBeacon transaction costs that did not recur in the current year period. Operating profit was $2.3 million, compared to an operating loss of $943,000 in the first quarter of 2024.

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Net interest income in the first quarter was $72,000, compared to net interest expense of $156,000 a year ago, due to investment of increased cash on hand compared to the year-ago period. Income tax expense was $729,000 in the first quarter, compared to an income tax benefit of $110,000 a year ago. Net income was $1.8 million, or $0.13 per diluted share, compared to a net loss of $1.2 million, or $0.08 per diluted share a year ago. Now turning to our balance sheet and cash flows. For the quarter ended March 31st, 2025, net cash provided by operating activities was $6.6 million, compared to $19.7 million for the quarter ended March 31st, 2024. Net working capital provided $16.3 million of cash, compared to $33.5 million in the year-ago period.

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

The decrease was primarily due to improvements in trade receivable collections that benefited the year-ago period, combined with a notable level of inventory pulled forward ahead of recent tariff-related uncertainty in the current year period. Capital expenditures were $516,000 in the first quarter of 2025, compared to $942,000 in the first quarter of 2024. We continue to follow our disciplined capital allocation strategy of reinvesting in the business and rewarding shareholders in the first quarter. During the three months ended March 31st, 2025, we returned value to our shareholders through the repurchase of 141,435 shares, totaling $2.7 million, and paid a total of $1.6 million in dividends. Over the last few years, we have allocated much of our free cash flow to significantly reducing debt, returning shareholder value through cash dividends and stock buybacks, and last year to fund our HealthBeacon acquisition.

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Looking ahead, we will continue our prudent approach, prioritizing the most impactful allocation of capital in the current operating environment. On March 31st, 2025, our net debt position, or total debt minus cash and cash equivalents in highly liquid short-term investments, was $1.7 million, compared to a net debt position of $23.7 million at the end of the prior year period. Now turning to our outlook. As Scott mentioned, our first quarter performance had us on track to achieve the full-year guidance we outlined in our fourth quarter earnings call. We were confident in offsetting the impact of the additional 20% tariffs imposed by the U.S. on China in late February and early March through select price increases.

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

With the reciprocal tariffs announced in April and the subsequent escalation tariffs on Chinese imports, visibility at this moment into how the remainder of the year unfolds has become more difficult. We are monitoring the situation closely and taking actions to mitigate the impact on our business, including price increases, pre-buying inventory, and accelerated diversification efforts, while we await what we hope is a positive outcome from current and future negotiations. Given the unpredictability of trade negotiations and responses that may occur, we think it is prudent to temporarily suspend our practice at providing guidance until conditions stabilize and visibility improves. We look forward to updating you on our progress on our second quarter earnings call in late July. That concludes our prepared remarks. We will now turn the line back to the operator for Q&A.

[Operator]

Thanks, Sally. Ladies and gentlemen, if you'd like to ask a question, remember to press star one on your telephone keypad. Once again, star and the number one. All right. We will take a moment to compile the Q&A roster. It looks like we do have a question. Our first question comes from the line of Adam Bradley with AJB Capital. Excuse me, Capital. Adam, your line is live.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Hi. Great job, Sally and Scott. Another good quarter. I think everyone understands, given the current environment, the lack of clarity on Outlook. My questions are more of, could you provide some clarity on your own comments? Specifically, your gross margin outlook now with the tariffs. You said in your earnings release that you expect a benefit from that in the fiscal year. Can you clarify if you mean beyond the roughly 26% gross margin you've experienced last year and were forecasting for this year? Do you expect these actions, even with tariffs, to benefit beyond that? If not, can you please clarify what you meant?

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Hey, Adam. This is Sally. I'm not sure that we said that our margins were going to benefit in the upcoming year. I do think that we're certainly working the levers to mitigate tariffs, and we're accelerating our supplier diversification, and we're working really closely with retailers as we navigate this. At this point, kind of as we said in our prepared remarks, we really don't have visibility that we want to share an outlook about gross margins going forward.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Okay. That may clarify. I am referring to in your earnings release where you said, "And expect these actions to benefit our margin profile in 2026." That is what I was asking for clarity on. Benefit beyond. Yeah.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Yeah. Adam, I think we're sitting there saying our diversification efforts, as we move our production into other countries with lower tariffs, we feel like that's going to benefit our margins as things settle out in 2026.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Okay. Without asking you specifics, can you help investors generally? Your initiative to move sourcing outside of China has been a multi-year—that's what you've said publicly, and I think that's great, right? Now you're in a better position had you not waited. As you look to source the same products from the rest of the world, in general, are those costs or margins better or worse than what you've done in China over the last one or two years, if you normalize for tariffs? Meaning, if you move out of China and you go somewhere else, is it more expensive, or is it cheaper, or is it about the same?

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Yeah. I really think kind of, as you know, we've got a very broad portfolio. And as you indicated, we started this endeavor two years ago, so we've learned a lot from doing that. I will tell you, each product platform is a little bit different, and the location's a little bit different. I think what we feel confident in saying is that regardless of what the cost impact is, as we diversify, we feel like we can negotiate the right.

[Operator]

It appears we lost Scott. Scott, are you back?

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Yeah.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

I'm still here. Is Adam here?

[Operator]

Okay. Great.

[Adam Bradley, Founder and Managing Member at AJB Capital]

I'm here. Can you hear me?

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Did you hear my response, Adam?

[Adam Bradley, Founder and Managing Member at AJB Capital]

No. I think we all lost you for about, I don't know, 15 seconds.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Okay. All right. What I was saying was, as we continue to diversify our production outside of China, whether the cost is up or down or neutral, we feel like that when that product lands here in the U.S., we are able to maintain our margins as we take pricing activities with our retail partners.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Okay. I have some follow-ups to that, but I'll take one step back. If there's someone else who wants to ask a question, I'll yield. If not, I'd like to follow up on that.

[Operator]

There are no further questions. Adam, if you'd like to continue.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Yeah. I'll keep rolling. Thanks. We all learned a lot in COVID and then with the other tariffs. I'm sure you all learned a lot. So far, we are hearing with other general news that retailers, the large retailers, may be pushing back on price increases. Without being specific, it sounds like you're saying you're not experiencing that because you're referencing specifically to raised prices where tariffs are impacting you. What is the response of the major retailers out there? Are they accommodating price increases in general, or are you receiving kind of some pushback on that?

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Yeah. I'm not going to—I think, Adam, I'm not going to go into that in a lot of specifics. I will tell you right now that we're kind of in week four since the retaliatory tariffs have come into play. If you look at our inventory on hand and the number of months that we have on hand, and most of our retailers have anywhere from five to eight weeks of inventory as well on hand, we're really both kind of sitting there and just doing a lot of communication as to what's the best way to move forward, right? One, we're trying to maximize the inventory that we've got on hand. We're working very hard to diversify our product into other countries, talking through those transitions and timelines, and what those costs would be.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

As things get closer for those products that we do not have diversification plans, those will be different conversations, but those have not had to happen yet. We are being very open with our retailers, and there is a lot of understanding back and forth. As you know, many of our retailers source their own products from these markets. These types of challenges are something that they are facing as well. It is also something that we really believe the majority of our competition is dealing with. It is not like we are the only ones in the room and the only ones having this conversation. We feel like we are all trying to figure it out together. We have got a little bit of cushion right now. We feel very good about our diversification efforts, and we are just trying to move as quickly as possible.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Okay. Thanks for clarifying that. I think that's pretty helpful. You did pull forward, it looks like, about $32 million if we compare inventory levels of Q1 2025 to Q1 2024. It was about $32 million pulled forward as of the end of the quarter. That was pre-retaliatory tariff amounts. Are you willing to share? Have you continued to do that through April, or what's your inventory status now?

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Yeah. I don't think we're going to spend a lot of time on that. As you know, kind of one of the critical dates that occurred out there was April 10th for when things could ship before they received the retaliatory percentage of 145%. After that date, again, we feel like we've got a good inventory position in the short term. As we get closer to the holiday season and we need to start building inventory, that's when we're going to really lean on our diversification efforts or try to work out an understanding with our retail partners on what we would do with the inventory that would be coming at the higher tariff percentage.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Okay. Thank you. I'm going to move on from inventory and tariffs and all that and talk about some of the other parts of the business. HealthBeacon, you've given us kind of a basic understanding of not only the business strategy, but its revenue has been about $1.5 million on a quarter run rate basis. Will you begin to break out its performance, or maybe say differently, do you have a plan to break out its performance longer term, and what should we expect from that?

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Yes. I mean, I think you will continue to see a breakout of the performance. I mean, certainly, if you refer to our 10Q, it is a segment. You will see it in the segment disclosures. As it makes sense, we will obviously continue to include it in our earnings release as well. We remain very excited about the business. It continues to grow at a better-than-expected rate. We are excited to see where it takes us in the future.

[Adam Bradley, Founder and Managing Member at AJB Capital]

Great. All right. I got a housekeeping item on accounting, if you could clarify, Sally. Your release said your share repurchases—I have to go back and look. I think it said something like in the body of the release. The statement of cash flows has $3.4 million of share repurchases. Is it easy enough for you to walk me through the difference in those two numbers?

[Sally Cunningham, SVP, CFO and Treasurer at Hamilton Beach Brands]

Yeah. I mean, I think we have two different pieces for the share repurchase. One is through our share repurchase program that was approved and governed by the board. Then our second piece of the repurchase in first quarter is associated with kind of tax withholdings associated with incentive compensation. It is the sum of those two pieces. As they are governed under two different plans, we break them out separately.

[Operator]

All right. Thank you for the questions, Adam. Ladies and gentlemen, that does conclude today's call. Thank you all for joining, and you may now disconnect.

[Scott Tidey, President and CEO at Hamilton Beach Brands]

Have a great day everyone.

Participants

Executives

• Sally Cunningham, SVP, CFO and Treasurer
• Scott Tidey, President and CEO

Analysts

• Adam Bradley, Founder and Managing Member at AJB Capital
• Brendan Frey, Managing Director at ICR