Lifetime Brands Q3 Earnings Call Highlights

Key Points

• Third-quarter sales rose 3.4% to $177.7 million, and adjusted net income increased to $8.4 million from $2.5 million. Lifetime nevertheless posted a GAAP net loss of $4.2 million.
• The slower-than-planned Maryland distribution center transition caused missed shipments and extra costs, with management estimating a $7 million to $10 million negative impact. Shipping returned to a normal cadence early in Q4, but the company expects to recover only some missed shipments.
• Lifetime raised the low end of its full-year sales outlook to a range of $660 million to $700 million while keeping profitability guidance unchanged. International sales grew 18.8%, and the board expanded the share repurchase authorization to $20 million.

Lifetime Brands NASDAQ: LCUT reported higher third-quarter 2026 sales and adjusted earnings, but a slower-than-expected ramp-up at its new Maryland distribution center led to missed shipments and added costs.

Net sales rose 3.4% from a year earlier to $177.7 million, while gross margin expanded to 36.5% from 35.1%. The company recorded a net loss of $4.2 million, or $0.19 per diluted share, compared with a loss of $1.2 million, or $0.05 per share, in the prior-year quarter.

Adjusted net income increased to $8.4 million, or $0.37 per diluted share, from $2.5 million, or $0.11 per share. Adjusted income from operations rose to $13.8 million from $11.5 million.

Chief Executive Officer Rob Kay said the company grew during the quarter but “should have grown more,” citing disruptions from the opening of the Hagerstown, Maryland, facility.

Distribution Center Transition Weighed on Results

Kay said the Hagerstown ramp-up took longer than planned, resulting in missed shipments and additional costs. The company was shipping at a normal cadence at the beginning of the fourth quarter, he said, and expects to recover some, but not all, of the missed shipments during the period.

Asked to quantify the disruption, Kay estimated a negative impact of $7 million to $10 million in the third quarter, while noting that the company was still working through the details.

The company recorded $5.3 million in non-recurring warehouse expenses associated with starting the new facility and exiting the old one. Those expenses included labor, inventory relocation, recruiting, training, setup costs and duplicate rent, Chief Financial Officer Larry Winoker said. Kay added that lost revenue and some operating inefficiencies were not included in the adjustments.

Winoker said the new facility will carry higher reported rent expense and depreciation, neither of which is added back to adjusted results. He expects distribution expense as a percentage of shipments to return to roughly its pre-move level, certainly by 2027.

Lifetime also recorded a $3.3 million inventory charge tied to exiting slow-moving products, primarily in the U.S. and partly in the U.K. Kay said the company chose to make the move as it consolidated facilities.

Club Channel and International Sales Grow

U.S. segment sales increased 2% to $161.3 million. Winoker said gains in tableware and home solutions, driven by warehouse clubs, were partly offset by lower kitchenware sales. Kay said tableware was the company’s largest growth driver in the quarter, rising 31%, led by flatware in the club channel.

Kay also pointed to the Dolly Parton home décor collection and the company’s relationship with Dollar General. Lifetime expects wholesale sales to Dollar General to approach $20 million this year, compared with essentially no business with the retailer in 2023, he said. The company is largely sold through its 2026 supply of Dolly products and sees strong demand going into 2027.

International sales rose 18.8% to $16.4 million, helped by higher selling prices and growth with retail customers in Australia and New Zealand. Kay said the international business was approximately break-even on a pro forma basis for the quarter, while Asia Pacific was profitable year to date.

Under its Project Concord initiative, Lifetime has shifted its U.K. business toward larger national accounts and changed its product assortment, Kay said. The company is also looking to exit a U.K. facility as a remaining step in the project.

Guidance, Debt and Buybacks

Lifetime raised the low end of its full-year net sales guidance, setting a range of $660 million to $700 million. It maintained its adjusted income from operations and adjusted EBITDA ranges. Kay said uncertainty over the recovery of missed shipments contributed to the decision to leave those profitability ranges unchanged.

Management corrected the trailing-12-month adjusted EBITDA figure presented in the earnings release. Winoker said the figure was $92.4 million before limitations under the credit agreement, while the $84.5 million reported in the release was after limitations. The limitations reflected one-time expenses for the distribution move and inventory rationalization, he said.

The company’s August refinancing extended debt maturities to 2031, Winoker said. Quarter-end liquidity was approximately $123 million, including cash and availability under its credit facility and receivables purchase agreement. Interest expense excluding swap mark-to-market adjustments fell to $2.1 million from $5 million, helped in part by $1.4 million in interest income from tariff refunds.

Lifetime’s board increased its share repurchase authorization to $20 million from approximately $11 million remaining under the prior program. Kay said the company could use buybacks opportunistically and plans to discuss its broader capital allocation strategy at an investor day in New York on Dec. 1.

About Lifetime Brands (NASDAQ:LCUT)

Lifetime Brands, Inc designs, sources, and sells a broad range of kitchenware, tableware, and home products. Its offerings include cookware, bakeware, cutlery, kitchen tools and gadgets, food storage and pantry products, barware, coffee and tea accessories, and dining and entertaining products.

The company markets products under a portfolio of owned, licensed, and private-label brands, including Farberware, Mikasa, Pfaltzgraff, KitchenAid, Taylor, Rabbit, Chicago Cutlery, Kamenstein, and Towle.

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