Hamilton Beach Q3 Net Falls 19.1 Percent
CLEVELAND-The absence of a pretax benefit, which was included in last year's third quarter, led Hamilton Beach to a 19.1 percent decrease in third-quarter net income this year, to $6 million.
The benefit in last year's third quarter was related to a commitment by a third party (unnamed in a statement by NACCO Industries, Hamilton Beach's parent, detailing its third-quarter results) to share in certain environmental liabilities, which reduced Hamilton Beach's selling, general and administrative expenses. Net income in this year's third quarter, which ended on Sept. 30, was also slimmed by an increase in outside service fees and advertising expenses incurred to execute the housewares brand's strategic initiatives.
Hamilton Beach's third-quarter revenue edged up 0.8 percent to $135.2 million. For NACCO as a whole, third-quarter net income fell 37.5 percent to $7.7 million, on revenues of $221.7 million, down 3 percent from last year.
Looking ahead for Hamilton Beach, NACCO said the brand's target consumer, the middle-market shopper, "continues to struggle with financial and economic concerns. These conditions, as well as weakened consumer traffic to retail locations, are creating continued uncertainty about the strength of the retail market. As a result, sales volumes in the middle-market portion of the U.S. small kitchen-appliance market in which Hamilton Beach operates are projected to grow only moderately in the remainder of 2014."
However, NACCO also predicted that sales volumes will grow in the fourth quarter, due to increased promotions and placements. The brand also expects that the FlexBrew coffeemaker (introduced two years ago) and the Breakfast Sandwich Maker line (debuted last year) will continue to gain market share. In addition, Hamilton Beach is projecting these lines with products offering a broader range of features in 2015, along with other product introductions and upgrades to existing products.