CLEVELAND-A decrease in unit sales volumes and increases in employee-related costs and advertising expenses slashed Hamilton Beach’s first quarter net income by 76.7 percent, to $350,000, according to a statement from NACCO Industries, Hamilton Beach’s parent company.
Net sales in the quarter, which ended on March 31, totaled $101.3 million, down 4.5 percent. The statement said, “Hamilton Beach’s target consumer, the middle-market mass consumer, continues to struggle with financial and economic concerns.”
NACCO’s other housewares-related holding, retailer Kitchen Collection, posted a $4 million net loss in the first quarter, compared to a net loss of $3.3 million last year. Net sales were down 7.1 percent to $36.9 million, driven down by reduced same-store sales at Kitchen Collection and Le Gourmet Chef stores.
Overall, NACCO reported a net loss of $1.5 million in the quarter, compared to net income of $4.4 million in last year’s first quarter. Net sales totaled $177.4 million, down 9.5 percent.
Looking ahead, NACCO said Hamilton Beach’s sales are expected to grow moderately for all of 2014. “The company is continuing to introduce innovative products and upgrades to certain products in several small-appliance categories,” the statement said. “These products, as well as other new product introductions in the pipeline for 2014, are expected to affect both revenues and operating profit positively.”
Regarding Kitchen Collection, NACCO said the outlook for consumer mall traffic is uncertain. This and the aforementioned economic concerns among middle-market mass consumers (also the Kitchen Collection target consumer) are expected to limit their spending levels for the balance of the year.