Hamilton Beach Brands Holding Co Q1 FY2025 earnings call

• First quarter sales and operating profit showed solid improvement despite macroeconomic headwinds. - Six strategic initiatives: core growth, premium market share, global commercial, Hamilton Beach Health growth, digital transformation, partnerships/acquisitions. - Core brand growth: U.S. consumer and Latin America sales up, Mexico market share gain. - Premium business: mid-single-digit growth, Numilk and CHI brands strong, Lotus launching. - Commercial business: deal with Sunkist. - Hamilton Beach Health: third quarter of increasing subscriptions, launch with OptumHealth. - Digital transformation: 40% of U.S. consumer sales via e-commerce, mid-single-digit e-commerce growth. - Mitigating tariff impact: price increases, pre-buy inventory, sourcing diversification.

Total revenue in the first quarter was $133.4 million, a 4% increase over the prior year. Gross profit was $32.8 million, with a margin of 24.6% compared to 23.4% in the prior year. North America consumer business led sales, driven by mass market brands. Premium business had mid-single-digit growth, with Numilk and CHI brands performing well, and Lotus brand launching. Commercial business signed a deal with Sunkist for commercial juicers. Hamilton Beach Health had third consecutive quarter of increasing patient subscriptions, with launch planned with OptumHealth.

• First quarter performance was on track to achieve full-year guidance, but tariffs made visibility tough. - Temporarily suspending guidance until trade conditions stabilize. - Expect to update on second quarter earnings call in late July.

• Higher tariffs impacting near-term trends. - Uncertainty from trade negotiations and reciprocal tariff escalations.

Q: Could you clarify gross margin outlook with tariffs?

A: Sally mentioned they're working levers to mitigate tariffs but currently can't share clear gross margin outlook. Scott added that as they diversify production outside China, they feel they can maintain margins with pricing activities.

Q: Response of major retailers to price increases?

A: Scott said they're in communication with retailers, many have inventory on hand, and both are working to figure out the best way forward, with understanding between them.

Q: HealthBeacon performance and breakout?

A: Sally said HealthBeacon's performance will continue to be broken out, including in 10-Q and earnings release, and they're excited about its growth.

Q: Clarification on share repurchases?

A: Sally explained that share repurchases include those from the board-approved program and those associated with tax withholdings for incentive compensation, broken out separately.