Lifetime Q1 Sales Up; Margins Down

GDA Staff -- Gifts and Dec, 5/6/2011 11:40:40 AM

Garden City, NY - Kitchenware, tabletop and home decor vendor Lifetime Brands Inc. reported an increase of 3.5 percent in consolidated net sales for the first quarter, to $91.8 million. Net sales for the wholesale segment were up $2.8 million, or 3.4 percent, to $84.9 million; net sales for the retail direct segment were up $0.3 million, or 4.5 percent, to $6.9 million. Loss from operations for the first quarter was $23,000, compared to income from operations of $2.5 million for the corresponding period in 2010.

Gross margin as a percentage of net sales for the wholesale segment declined to 34 percent from 37 percent in the corresponding period in 2010. The company attributed the decrease to temporary price reductions related to marketing initiatives that will provide the Company with additional retail shelf space later in the year, as well as low margin sales of excess inventory and changes in product mix. Gross margin for the retail direct segment was 66.4 percent, compared to 66.6 percent for the corresponding period in 2010.

Jeffrey Siegel, chairman, president and CEO, said in a statement that the additional shelf space "should generate sufficient additional volume, beginning in the third quarter of the year to more than make up for the reductions in the gross margin percentage."

Siegel also said the company is raising prices in the third and fourth quarters to hold Lifetimes' (and retailers') margins constant in the face of increased costs. He expects the company to "achieve both top line growth and an increase in profitability for the full year 2011."