CLEVELAND— A continued effort to shift its assortment to higher-end appliances gave Hamilton Beach a boost in net income in the first quarter despite a slight decline in revenue.
For the three months ended March 31, sales for the small appliance supplier were $114.2 million, down from sales of $115.7 million in the same quarter the prior year. First quarter net income was $0.7 million, an increase from a net loss of $0.3 million the year prior. Operating profit also increased $700,000 year-over-year.
Company officials pinned the decrease in revenue on soft retail demand as several key customers re-balanced inventory after the holiday season. New higher-priced appliances introduced by Hamilton Beach helped to partially offset the impact of reduced retail volumes.
In addition, officials with the company noted the increases in operating profit and net income were due to a shift in sales mix to higher-priced and higher-margin electrics and lower costs.
During a recent investor conference call, Christina Kmetko, head of investor relations with NACCO Industries, Hamilton Beach’s parent company, said there is an expectation that sales will continue to shift from in-store channels to Internet sales channels.
“As a result of this market environment and with a number of new products in the product pipeline, we expect Hamilton Beach’s sales volumes and revenues to increase modestly in 2017 when compared with 2016,” she said.
Kmetko noted this increase is anticipated as the result of enhanced distribution and increased higher margin product placements resulting from the execution of its strategic initiatives both domestically and internationally.
When looking at key consumer markets, consumer confidence, financial pressures on middle market consumers and changing buying patterns continue to create uncertainty about growth prospects with U.S. retailers. However, Kmetko noted the company expects solid growth from sales in the international and commercial markets.