Lifetime Brands, Inc. Q2 FY2025 earnings call

• Proactive steps taken over 2 years to mitigate trade policy challenges, including shifting manufacturing outside China, expanding in Mexico, and diversifying sourcing in Southeast Asia.
• Second quarter impacted by tariff-related headwinds leading to shipment delays and $10M YoY top-line decline, but EBITDA remained stable with adjusted EBITDA consistent with prior quarter.
• Cash flow from operations exceeded $25M YTD, liquidity strong with over $90M on hand. International markets, especially Europe, saw growth. Cutlery performed well with new product introductions. Taylor division, Fred product line, and international business also had growth.
• On supply chain, on track to move 80% of production outside China by year-end, enhancing flexibility and cost efficiency.

Consolidated sales declined by 6.9% to $131.9 million. U.S. segment sales decreased by 8.6% to $119.3 million, adversely affected by shipment delays due to tariffs. International segment sales increased by 12.4% to $12.6 million, with growth in Europe and e-commerce. U.S. segment gross margin increased to 39.1% from 38.7% due to favorable product mix. International gross margin decreased to 32.5% from 36.6% due to unfavorable customer and product mix.

• Second half expected to be stronger as pricing resets, shipments resume, and cost base reflects early decisions.
• Reevaluation of guidance for next quarter due to ongoing uncertainty despite improved clarity on tariffs.

• Continued uncertainty in trade environment and tariff rates could impact future shipments and sales.
• Potential impact of unforeseen macroeconomic headwinds on demand for products.

Q: Could you give details on pricing versus unit volumes in Q2?

A: Pricing increases were implemented uniformly across the board, with no impact on Q2. Effective dates of price increases had no effect on Q2.

Q: Update on Dolly Parton products at Dollar General?

A: Shipments to Dollar General were on hold in Q2 due to tariffs, but will ship in 2025. Program continues to expand, and discussions ongoing for additional brands at Dollar General.

Q: Update on international segment operating income and Project Concord?

A: International segment had negative impact from inventory write-offs, with financial impact to flow through in third quarter. Monitoring to hit milestones.

Q: Reason for difficulty in providing guidance despite improved tariff clarity?

A: Poor visibility due to frequent changes and pricing increases not yet felt by consumers. Will reevaluate next quarter.

Q: When will pricing hit shelves?

A: Expecting pricing to hit shelves in Q3, with some bigger retailers' private label stuff passing through quicker earlier.