Lifetime Brands, Inc. Q1 FY2026 earnings call

• Lifetime reported year-over-year growth in top and bottom line in Q1, with actions on pricing, cost, supply chain, and new product development contributing. - Kitchen tools is largest category, with Farberware performing well and KitchenAid recovering. Home decor had strong quarter, with Dolly Parton brand contributing. Flatware sales rebounded from tariff disruption. E-commerce declined at start of quarter but improved in March. Cutlery had year-over-year decline but underlying business stable. International business grew and improved profitability, with Project Concord expected to be resolved in first half of year. - Managed tariff exposure proactively, expanded sourcing footprint, implemented price increases, and has flexible supply chain. Relocation of East Coast Distribution Center to Hagerstown, Maryland is on schedule and operational with lower costs.

Consolidated net sales increased by 2.4% to $143.5 million. U.S. segment sales increased by 1.7% to $130.7 million, with home solutions (due to home decor products in Dollar Channel and Warehouse Club programs) contributing, partially offset by decrease in tableware products. International segment sales increased by 10.6% to $12.8 million, with 2.5% increase excluding foreign exchange translation driven by higher sales in Asia Pacific region and to UK nationals. Gross margin increased to 37.7% from 36.1%, with U.S. segment gross margin at 37.9% from 36.2% (due to favorable product mix and higher selling prices, partially offset by higher tariffs) and international gross margin at 36.7% from 35.3% (driven by favorable customer and product mix). U.S. segment distribution expenses as percentage of goods shipped improved to 10.9% from 11.9% (due to higher sales, lower variable labor but offset by higher freight rates). International segment distribution expenses as percentage of goods shipped improved to 23.2% from 25% (due to higher sales and decrease in inventory levels at third-party operated distribution facilities, partially offset by higher freight rates). U.S. segment SG&A decreased to $28.2 million, with expenses as percentage of net sales at 21.6% from 23.3% (due to impact of fixed costs on supplier sales volume). International SG&A remained at $3.7 million, with expenses as percentage of net sales at 28.9% from 31.9% (attributable to impact of fixed costs on higher sales volume). Restructuring expenses were $2 million in 2026, including employee severance, UK Project Concord, and downsizing of sterling silver manufacturing operations in Puerto Rico.

• Expect net sales between $650 million to $700 million, adjusted EBITDA of $53.5 million to $56 million, and adjusted net income of $16 million to $17.5 million. - Guidance reflects continued top line growth, full year benefit of 2025 pricing actions, reset cost structure, and costs associated with Hager Sound transition. - Dolly Parton sales expected to grow substantially in 2026 with expansion beyond dollar channel. - Actively monitoring M&A environment, looking for opportunities that meet investment criteria. - Plan to host investor day later this year targeting fourth quarter.

• Final phase of Project Concord encountered legal and structural delays in 2025. - May experience reduction in sales to Middle East due to war disruptions, but sales to region are insignificant. - High price of silver made sterling silver flatware business non-viable. - Increased freight costs both domestically and ocean freight, with container rates starting to go up driven by oil costs.

Q: Congrats on a nice quarter. Maybe just starting with the guidance for 26, just wanted to hear a little bit more about the pricing assumption that you embedded in the growth for sales, and then just any additional color on sort of the way to think about demand between the U.S. versus international.

A: Pricing in 2026 view didn't bake in incremental pricing related to further fluctuations, 2025 pricings were related to tariffs and phased in, so 2026 gets full year impact. International is small part of business, bulk of financial results from North America and US, with overlap in products and alignment of product offerings and development, e.g., fastest growing international brand is KitchenAid with products designed in US.

Q: The margin expansion that is contemplated in the full year guide, at least on the adjusted EBITDA line, wanted to hear a little bit about the way you guys built the expectations for margin expansion uh contribution from the cost cutting you've done in international versus just flow through in the us from from good growth wanted to hear how that kind of feeds into the the expansion assumption for the full year and then also if there's any headwind that you're baking in from higher oil prices component costs or shipping or anything like that uh in in the 26 guide that'd be helpful A: Margin expansion is function of channel mix, product mix. International business had bigger improvement percentage wise as it wasn't making money and driving to make money. US business has always been highly profitable, majority of increase in bottom line from US business with streamlined infrastructure. Not seeing COGS impact, but increased freight both domestically and ocean freight, container rates starting to go up driven by oil costs, baked into analysis.

Q: Curious if you've seen or if you could kind of note out any changes in behavior from your retail customers, if there is anything notable at all. Since the Iran conflict broke out in early March, just curious if there's any more reticence to take inventory or if it's relatively business as normal.

A: Haven't really seen anything from retail customers, most retailers are sophisticated and change in safety stock levels seemed to have passed. More impacts on supply side, continued investment in new product development helping gain placement at customer base.

Q: First, I just wanted to follow up on one of the last comments you mentioned, Rob, as far as new products. So, would you say that now that, you know, new product as a percentage of overall sales, are they meaningfully up versus where they had been historically?

A: Product development is continuous cycle, not necessarily changed in terms of new product mix except for new opportunities like Dolly Parton. Build-A-Board was introduced and grew, but not as much new growth in 2026 there. Home decor has new products driving growth.

Q: I know your guidance for the full year is not including any additional price increases, but when we look at the first quarter of this year versus the first quarter of last year, which the year-ago period was before Liberation Day. So just on a comparable period level, was there any – can you just speak to pricing versus volumes just for the first quarter alone?

A: Units were down, dollar sales in single-digit percentages for unit decline.

Q: As far as potential AIPA tariff refunds, how are you guys thinking about that?

A: Not included in guidance, we think appropriate gap is not to recognize impact on financial statements, have a refund of $41.7 million subject to refund, but administration could appeal and there are uncertainties.