Hamilton Beach Q2 Net Drops 31.5 Percent
CLEVELAND-Even though sales moved up during the quarter, the Hamilton Beach brand posted a 31.5 percent decline in second-quarter net income, which totaled $1.4 million.
Net sales for the small electrics label, a subsidiary of NACCO Industries, were $118.4 million, up 3.3 percent, for the quarter ending on June 30. The gain resulted primarily from increased sales of products with higher price points, chiefly in the brand's commercial market and U.S. and Canadian consumer markets. This was offset somewhat by reduced unit sales volumes, primarily in the U.S. consumer market, and unfavorable currency movements from both the Canadian dollar and Mexican peso.
NACCO's other home-related unit, the Kitchen Collection retail operation, reported a net loss of $2.7 million in the quarter, compared to a net loss of $2.4 million in last year's second quarter. Net sales fell 14.5 percent to $32.8 million. Kitchen Collection's results suffered from the closure of unprofitable Kitchen Collection and Le Gourmet Chef stores since June 30, 2013, along with decreases in same-store sales from both stores.
Overall, NACCO posted a net loss of $3.6 million in the quarter, compared to net income of $5.1 million in last year's second quarter. The parent company's net sales totaled $200.4 million, up 2.2 percent.
Looking ahead, NACCO is projecting moderate growth in sales volumes for Hamilton Beach products over the second half of 2014, "provided customer traffic improves." This is uncertain, the company added, given the continuing economic struggles facing the brand's middle-market consumer base.
Regarding Kitchen Collection, NACCO said its second-half outlook is problematic considering the prevailing traffic patterns to all mall locations, particularly outlet malls. The company also noted the trend of fewer households being established and the economic and financial pressures on the retailer's target base of middle-market consumers, which are expected to continue dampening consumer sentiment and spending levels for this customer base through the rest of 2014.