Lifetime Brands, Inc. (NASDAQ:LCUT), a leading designer, marketer and distributor of branded kitchenware, tableware and other products used in the home, has reported its financial results for the first quarter of fiscal year 2024. The company's performance in Q1 2024 showcases its ability to navigate the current market environment and position itself for future growth.

Financials

For the first quarter of 2024, Lifetime Brands reported net sales of $142.2 million, a decrease of 2.2% compared to the same period in 2023. Despite the slight top-line decline, the company delivered strong bottom-line results, with a gross margin of 40.5%, up from 37.0% in the prior-year quarter. This margin expansion was driven by favorable product mix, new product introductions, and stability in the company's supply chain.

Net loss for the first quarter of 2024 was $6.3 million, or $0.29 per diluted share, an improvement from the $8.8 million net loss, or $0.41 per diluted share, reported in the first quarter of 2023. Adjusted net loss, a non-GAAP financial measure, was $3.2 million, or $0.15 per diluted share, compared to an adjusted net loss of $2.6 million, or $0.12 per diluted share, in the prior-year period.

Income from operations for the first quarter of 2024 was $1.8 million, compared to a loss of $1.8 million in the same quarter of 2023. Adjusted income from operations, a non-GAAP financial measure, was $5.7 million, up from $3.4 million in the prior-year period.

Adjusted EBITDA, a non-GAAP financial measure, for the trailing 12-month period ended March 31, 2024, was $59.5 million, an increase of $2.2 million from the full-year 2023 figure of $57.3 million.

Segmental Performance

The company's U.S. segment reported net sales of $130.5 million in the first quarter of 2024, a decrease of 2.3% compared to the same period in 2023. This decline was primarily driven by lower in-stock levels at certain retailers, particularly in the e-commerce channel, which led to decreased shipping volume. However, the company noted that its sell-through rates remained strong, indicating continued customer and consumer receptivity to its products.

Within the U.S. segment, the Kitchenware category saw a 2.6% decrease in net sales, while the Tableware category experienced a 7.5% increase, and the Home Solutions category declined by 10.9%.

The International segment reported net sales of $11.7 million in the first quarter of 2024, a decrease of 1.7% compared to the same period in 2023. In constant currency, the International segment's net sales decreased by 5.3%, primarily due to the ongoing recessionary environment in the U.K. and a temporary decrease in shipments to a major customer. However, the company's markets in Asia Pacific continued to show strong performance, benefiting from the company's strategic investments in the region.

Outlook

Lifetime Brands remains focused on its strategic growth initiatives, including the expansion of its foodservice business, e-commerce channel, and new product development. The company's Mikasa Hospitality product line is expected to deliver $30 million in revenue for the fiscal year 2024, up from approximately $20 million in 2023.

In the e-commerce channel, the company experienced a temporary pause in sales due to inventory rationalization efforts by its largest e-commerce customer. However, the company expects robust performance in this channel throughout 2024 as sell-through data across all categories remained strong, and the company gained market share.

The company's new product development efforts continue to be a key competitive advantage, with the successful launch of the Dolly Parton line of products and the growing traction of the KitchenAid line in international markets. The company is also preparing to announce a new partnership for its international geographies, which it expects to launch in 2024 or 2025.

For the full year 2024, Lifetime Brands provided the following guidance:

- Net sales of $690 million to $730 million - Adjusted income from operations of $49 million to $54 million - Adjusted net income of $15 million to $17 million - Adjusted EBITDA of $57.5 million to $62.5 million

Liquidity

Lifetime Brands maintains a strong balance sheet and liquidity position. As of March 31, 2024, the company had liquidity of approximately $125 million, which included cash, availability under its credit facility, and funding under its receivables purchase agreement. The company has reduced its term loan balance by almost $100 million over the past 12 months, and its debt to adjusted EBITDA leverage ratio stood at 3.3x as of the end of the first quarter, down from 3.4x at the end of 2023 and 4.4x a year ago.

The company's continued focus on disciplined expense management and operational excellence has enabled it to maintain strong liquidity levels, providing flexibility for strategic investments and potential acquisitions.

Conclusion

Lifetime Brands' solid performance in the first quarter of 2024, marked by margin expansion, improved profitability, and continued progress on its strategic initiatives, demonstrates the company's ability to navigate the current market environment. With a robust product pipeline, growing international presence, and a strong balance sheet, Lifetime Brands is well-positioned to capitalize on opportunities and drive long-term value for its shareholders.