As it pursued and launched growth initiatives in the first quarter, Hamilton Beach Brands Holding Co. posted a net loss as slow consumer demand and retailer inventory repositioning hit sales.
The company reported that total revenues were $128.3 million compared to $146.4 million in the year-prior quarter. Operating loss was $5.1 million versus operating income of $12.7 million in the period a year earlier.
Hamilton Beach Brands previously reported that it expected a challenging first half of 2023, particularly in the first quarter, due to soft consumer consumption trends and retailer inventory rebalancing. However, it noted that retailer order patterns that were depressed early on entered a more normal phase later in the quarter. From a geographical perspective, revenue decreased in the company’s consumer markets in the United States and Latin America, increased in the Mexican consumer market, and was flat in the Canadian consumer market. In the Global Commercial market, Hamilton Beach Brands attributed lower revenue primarily to the timing of order fulfillment in the international food service sector.
The company anticipates continued progress with its strategic initiatives to drive revenue growth, expand operating margin and generate strong cash flow over time. The initiatives focus on increasing sales of innovative, higher priced, higher margin products in the company’s core North American market. In addition to commercial products, focus areas include premium products and home health and wellness. Hamilton Beach Brands also is focused on driving growth of its flagship brands, Hamilton Beach and Proctor Silex, accelerating its digital transformation while leveraging partnerships and acquisitions, it maintained.
In the premium business, Hamilton Beach Brands continued to develop, license and acquire brands to increase its participation in upmarket merchandise. New products and digital marketing support underpin the strategy to grow the premium business. The company expects the New Bartesian cocktail machine duet and professional models introduced in 2022 to contribute to the continued success of the brand. In March 2023, Hamilton Beach Brands announced an agreement to provide the next generation of specialty appliances for use with Numilk powdered ingredients that consumer and commercial purchasers can use to create a variety of fresh non-dairy milk products on demand. Hamilton Beach Brands and Numilk are in the product design and engineering phase, with the launch of the new appliances pegged for early 2024.
Hamilton Beach Brands has been developing and introducing new products for the fast-growing health and wellness sector as it aims to achieve meaningful dollar and share participation, the company indicated. Introduced to the U.S. in 2022, the Smart Sharps BinT from Hamilton Beach Health powered by HealthBeacon provides in-home injection care management. The system is FSA, HSA, Medicare and Medicaid eligible, which facilitates increased adoption. The company pointed out that it expects new agreements with specialty pharmacies to drive 2023 sales. Hamilton Beach Brands launched six Clorox True HEPA air purifiers and replacement filters in 2022 under a trademark licensing agreement. In addition to tabletop, medium room and large room models, the company plans an extra-large room version for 2023. Under a trademark licensing agreement, Hamilton Beach Brands introduced the Brita Hub countertop electric water filtration appliance earlier this year, creating a new category, and initial consumer response has been favorable, the company asserted.
In 2022, Hamilton Beach Brands product development teams delivered 40 new Hamilton Beach and Proctor Silex consumer product platforms in high-demand categories, and it expects benefits from those introductions in 2023 results. Hamilton Beach Brands is supporting new products under the brands via digital marketing, social media advertising and influencer marketing. The company continues to be the top small kitchen appliance brand in the U.S. based on units sold, it stated, which continues to reposition the Proctor Silex brand as “Simply Better.” After converting several direct markets to licensing partnerships beginning in 2021, Hamilton Beach Brands will continue to build out licensing partnerships globally.
The company intends to leverage partnerships and acquisitions by identifying and securing businesses with a strategic fit with the Hamilton Beach Brands portfolio as it pursues additional trademark licensing agreements, strategic alliances and purchases that can drive growth in all its markets.
In addition, Hamilton Beach Brands is investing to gain share in e-commerce markets for consumer and commercial products. The company is collaborating closely with omnichannel and online-only retail customers to leverage the fast-paced changes in the e-commerce channel and increase awareness and sell-through of its products. Hamilton Beach Brands focuses on robust digital marketing that includes online product content, search optimization and advertising, attracting favorable reviews and strong star ratings as it furthers social media strategies. The company’s consumer products earned an average 4.3-star rating in 2022 and five of its 10 brands rated 4.5 stars or higher, according to Hamilton Beach stated, which added that a new company U.S. distribution center includes state-of-the-art capability to ship small packages directly to consumers in partnership with retail customers.
