Hamilton Beach Net Falls 71 Percent in First Quarter
CLEVELAND-"Margin compression" took the blame for a steep 71 percent drop in net income for the Hamilton Beach brand in the first quarter, according to a statement from parent company NACCO Industries.
The reduction in the brand's margins stemmed from increased transportation and product costs, which NACCO said would likely slim down Hamilton Beach's bottom line for the entire fiscal year. The parent company said the brand would "adjust" product prices and placements if these costs continue to increase, which is expected. In addition, Hamilton Beach is moving its distribution center to a larger facility in this current quarter to increase distribution efficiencies.
The brand's net sales for the quarter, which ended on March 31, slipped by 1.9 percent to $100.6 million. NACCO said Hamilton Beach is counting on new products to provide sales momentum through the rest of this year, in particular the Brewstation coffeemaker, the Stay-or-Go slow-cooker line and the Melitta brand of beverage appliances. Hamilton Beach will also introduce The Scoop, a single-serve coffeemaker; and the Durathon iron product line in the second half of 2011.
Hamilton Beach lagged well behind the parent company in the first quarter. NACCO as a whole registered net income of 62.8 million, up 437 percent from the first quarter of last year, in a net sales gain of 34 percent to $745.5 million. The bottom-line gain occurred due to improved sales volume and gross-profit gains in its materials-handling group.