Lifetime Brands sales rise 3.4% despite warehouse transition

By Sophie Lindqvist

$177.7 million in third-quarter 2026 net sales at Lifetime Brands (NASDAQ: LCUT) represented 3.4% year-on-year growth, but a slower-than-expected Hagerstown warehouse ramp-up caused missed shipments and added costs. The 36.5% gross margin (sales remaining after product costs), up from 35.1%, did not prevent a $4.2 million net loss. Lifetime raised its full-year sales guidance floor to $660 million.

Adjusted net income reached $8.4 million, or $0.37 per diluted share, from $2.5 million, or $0.11, while adjusted income from operations rose to $13.8 million from $11.5 million. The GAAP (generally accepted accounting principles) loss widened to $4.2 million, or $0.19 per diluted share, from $1.2 million, or $0.05.

CEO Rob Kay said Lifetime “should have grown more,” citing disruptions from opening the Hagerstown, Maryland, facility. Management was still working through the details.

What did the Hagerstown transition cost?

$7 million to $10 million was Kay’s estimated third-quarter impact from the delayed Hagerstown ramp-up, although the company was still working through the details. Shipments had returned to a normal cadence at the start of the fourth quarter. Lifetime expects to recover some, but not all, missed shipments during that period.

$5.3 million in non-recurring warehouse expenses accompanied the new facility’s opening and the old facility’s exit, according to CFO Larry Winoker. The charges included:

• Labor
• Inventory relocation
• Recruiting
• Training
• Setup costs
• Duplicate rent

Kay said lost revenue and some operating inefficiencies were excluded from those adjustments. Winoker said the new facility will carry higher reported rent and depreciation, and Lifetime adds neither back to adjusted results.

Distribution expense as a percentage of shipments should return to roughly its pre-move level, Winoker said, and certainly by 2027. A $3.3 million inventory charge covered exits of slow-moving products, primarily in the U.S. and partly in the U.K. Kay said the company chose those exits while consolidating facilities.

Where did sales growth come from?

$161.3 million in U.S. segment sales represented 2% year-on-year growth. Winoker said tableware and home solutions gained through warehouse clubs, partly offsetting lower kitchenware sales. Kay called tableware the quarter’s largest growth driver; it rose 31%, led by flatware in the club channel.

Wholesale sales to Dollar General should approach $20 million in 2026, against essentially no business with the retailer in 2023, Kay said. He pointed to the Dolly Parton home décor collection and the retailer relationship, with much of the business supported by the 2026 Dolly supply. Kay also saw strong demand going into 2027.

$16.4 million in international sales represented 18.8% year-on-year growth, helped by higher selling prices and increased sales to retail customers in Australia and New Zealand. Kay said the international business was approximately break-even on a pro forma basis (adjusted for comparability) for the quarter, while Asia Pacific remained profitable year to date.

Project Concord has shifted the U.K. business toward larger national accounts and changed its product assortment, Kay said. The company also plans to exit a U.K. facility as the remaining step in the project.

What did guidance and financing show?

$660 million to $700 million is the full-year net sales guidance range after Lifetime raised the low end. Management maintained its adjusted income from operations and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, with management adjustments) ranges. Kay said uncertainty over recovering missed shipments prompted management to leave both profitability ranges unchanged.

Management corrected the trailing-12-month adjusted EBITDA figure presented in the earnings release. $92.4 million was the pre-limitation amount under the credit agreement (the contract governing borrowing terms), while the release showed $84.5 million after limitations. Winoker said the constraints reflected one-time distribution-move and inventory-rationalization expenses.

2031 is the maturity horizon after Lifetime’s August refinancing extended the company’s debt maturities, Winoker said. Approximately $123 million of quarter-end liquidity included cash, credit-facility (borrowing-line) availability and receivables-purchase-agreement (a facility for selling customer receivables) availability.

Interest expense excluding swap mark-to-market adjustments (periodic revaluation of financial swaps) fell to $2.1 million from $5 million. Tariff refunds contributed $1.4 million of interest income, providing part of the reduction.

$20 million is the board’s enlarged share-repurchase authorization, up from approximately $11 million remaining under the prior program. Kay said Lifetime may use repurchases opportunistically and plans to discuss its broader capital-allocation strategy at an investor day in New York on Dec. 1.

What does Lifetime Brands sell?

Lifetime Brands designs, sources and sells kitchenware, tableware and home products, including cookware, bakeware, cutlery, kitchen tools, gadgets, food storage, pantry goods, barware, coffee and tea accessories, and dining and entertaining items. Its owned, licensed and private-label (retailer-branded) portfolio includes Farberware, Mikasa, Pfaltzgraff, KitchenAid, Taylor, Rabbit, Chicago Cutlery, Kamenstein and Towle.

3.4% sales growth beside a widened net loss is an unusual pairing, even before the warehouse explanation. Management expects only partial shipment recovery in the fourth quarter, leaving distribution efficiency as the firmer benchmark by 2027.