Lifetime Brands Inc (LCUT) Posts Mixed Q3 Results; Raises Full-Year Guidance
Lifetime Brands Inc (NASDAQ:LCUT) reports a 2.7% increase in Q3 consolidated net sales year-over-year.
Adjusted EBITDA for the trailing twelve months ended September 30, 2023, reached $55.5 million.
LCUT raises the lower end of its full-year 2023 guidance, expecting net sales between $670 to $690 million.
Company declares a regular quarterly dividend and progresses with the extension of its Term Loan B facility.
On November 9, 2023, Lifetime Brands Inc (NASDAQ:LCUT), a prominent global provider of branded consumer products for the home, announced its financial outcomes for the third quarter ended September 30, 2023. The company experienced a modest increase in net sales and a significant improvement in net income compared to the same period in the previous year. LCUT's Chief Executive Officer, Rob Kay, expressed optimism about the company's trajectory, citing a strong third quarter performance and a positive outlook for the remainder of the year.
Financial Performance Overview
The company's consolidated net sales for the third quarter reached $191.7 million, a 2.7% increase from $186.6 million in the corresponding period in 2022. This growth was partly attributed to the recovery of LCUT's core U.S. business and normalization in retailer purchasing behavior. Adjusted for constant currency, which excludes the impact of foreign exchange fluctuations, net sales saw a 2.2% increase.
Gross margin improved to 37.0% in Q3 2023 from 36.4% in Q3 2022, reflecting a more profitable mix of products sold. Income from operations more than doubled to $13.6 million, up from $7.6 million in the prior year. Adjusted income from operations also saw an increase, reaching $17.7 million compared to $16.8 million in Q3 2022.
Net income for the quarter was reported at $4.2 million, or $0.20 per diluted share, a significant turnaround from a net loss of $(6.4) million, or $(0.30) per diluted share, in the same quarter of the previous year. Adjusted net income, which excludes certain non-recurring items, was $7.7 million, or $0.36 per diluted share, compared to $6.2 million, or $0.29 per diluted share, in Q3 2022.
Nine Months Financial Highlights
For the nine months ended September 30, 2023, LCUT reported consolidated net sales of $483.5 million, a decrease of 7.1% from the previous year. Gross margin for the period increased to 37.4% from 35.7%, and income from operations was $16.2 million, up from $11.5 million. However, the company recorded a net loss of $(11.1) million, or $(0.52) per diluted share, which included a non-cash impairment charge related to the company's equity investment in Grupo Vasconia.
Balance Sheet and Cash Flow
LCUT's balance sheet as of September 30, 2023, showed total assets of $691.7 million and total liabilities and stockholders' equity of the same amount. The company's liquidity position was strong, with $198.8 million available, including cash on hand and available borrowings. Cash flows from operating activities for the nine months provided $16.9 million, despite a net loss for the period.
Outlook and Dividend
Based on the positive momentum, LCUT has raised the lower end of its full-year 2023 guidance. The company now expects net sales between $670 to $690 million and adjusted EBITDA in the range of $52 to $55 million. Additionally, the Board of Directors declared a quarterly dividend of $0.0425 per share, payable on February 15, 2024, to stockholders of record on February 1, 2024.
LCUT's financial results reflect a company navigating a dynamic market with strategic focus and operational discipline. The improved guidance for the full year indicates confidence in the company's ability to maintain its growth trajectory and deliver value to shareholders. Investors and analysts are encouraged to review the full financial statements and non-GAAP reconciliations provided by the company for a comprehensive understanding of LCUT's performance.
For detailed financial tables and further information, please refer to the full earnings release and filings available on the company's website and financial databases.
Explore the complete 8-K earnings release (here) from Lifetime Brands Inc for further details.
This article first appeared on GuruFocus.
