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Brexit, Tariffs Take Toll on Cutlery Co.

LongIsland.com

Lifetime Brands is growing, but facing impacts from Brexit and tariffs.

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Lifetime Brands, parent of Farberware and many other brands, is based in Garden City.

Photo by: Lifetime Brands headquarters

Lifetime Brands, a maker of cutlery and table ware, has said that tariffs and uncertainty over Brexit are impacting the company, even as it sees success with numerous initiatives.

The Garden City-based company whose brands include Farberware, Sabatier, Hoffrtiz, Mikasa and many more  said sales for the quarter ended June 30 were $142.5 million, down $6.2 million or 4.2 percent.

The company's net loss grew to $11.5 million from $6.1 mllion a year ago as gross margins fell to $44 million, or 30.9 percent, from $52.1 million, or 35 percent a year ago.

Lifetime Brands CEO Robert Bruce Kay said second quarter 2019 financial results “fell short of expectations,” although the company is “on track to achieve its strategic priorities of repositioning our company for higher growth rates and increased returns.”

He said Lifetime Brands “gained market share in the majority of our business lines” as it grows, but added the company also “faced market and geopolitical factors that have had a negative impact on our results.”

Lifetime Brands in the second quarter completed a wide range of initiatives, introducing cutlery and tabletop products into the commercial food service sector.

It also launched what Kay called a “comprehensive international sales effort” along with new product lines across in the bakeware, kitchen tools and home solutions.

Kay, however, said factors such as “ongoing geopolitical conditions, including tariff and Brexit uncertainty” did  have “an impact on shipments for both the U.K. and continental Europe markets.”

He called tariffs “a fluid environment” amid talk about adding more to additional products made in China and discussion about how far these would extend.

“Lifetime actively monitors the changing tariff environment and has strategies in place intended to mitigate the impact of such tariffs,” Kay said.

The company is looking at ways to reduce the cost of goods, including the supply chain, administrative costs and discretionary spending activity and possible price increases amid a changing tariff environment.

“While the financial impact from tariffs is immediate upon implementation, there is a lag in realizing the financial benefits from these mitigating actions,” Kay said.

He added that the company “experienced some marginal reduction in shipments as a result of tariffs as higher prices have reduced demand.”

Still, Kay said, “To date, this has not been significant, and we continue to experience revenues consistent with our expectations.”