Hamilton Beach Brands Sees Revenue Growth Despite Stock Decline
Shares of Hamilton Beach Brands Holding Company (HBB) have fallen 23.2% since releasing its first-quarter results for 2025. In contrast, the S&P 500 index posted a modest growth of 0.63% during the same period. Over the last month, HBB’s stock dropped 16.3%, while the S&P 500 rallied by 3.4%.
Positive Earnings Driven by Higher Margins and Volume
For the first quarter ended March 31, 2025, Hamilton Beach reported revenues of $133.4 million, marking a 4% increase from $128.3 million a year earlier. Its gross profit rose by 9% to $32.8 million, with gross margin expanding 120 basis points to 24.6%, up from 23.4% in the previous year. Net income improved to $1.8 million, or 13 cents per diluted share, compared to a net loss of $1.2 million, or 8 cents per diluted share, last year.
Key Business Metrics and Operating Performance
Operating profit reached $2.3 million, representing a $3.2 million turnaround from last year’s $0.9 million operating loss. Selling, general, and administrative (SG&A) expenses slightly dropped to $30.4 million, reflecting the absence of prior-year acquisition costs related to HealthBeacon.
Cash flow from operations stood at $6.6 million, down from $19.7 million a year prior, largely because of increased inventory levels and tariff-related pull-forward activities. The decline also compares unfavorably to previous gains in receivables collections.
Consumer Business Growth and Strategic Development
The first quarter’s gains were principally driven by Hamilton Beach’s consumer business in North America, especially within the U.S., which benefited from positive trends in at-home dining. The Premium and Health segments also aided gross margin growth. HealthBeacon, acquired in early 2024, contributed $1.5 million in revenues and operated at higher profit margins, enhancing overall profitability. This segment saw its third consecutive increase in patient subscriptions, positioning it for over 50% growth in 2025, bolstered by a new partnership with OptumHealth.
Noteworthy brands like Numilk and CHI within the Premium segment experienced strong consumer interest, driven by product launches and partnerships with major retailers. The company aims to enhance its premium offerings with a new brand, Lotus, set to debut seven products targeted at high-end home cooks later this year.
E-commerce sales constituted about 40% of U.S. consumer revenue, growing in the mid-single digits thanks to strong performance across digital and retail partner platforms. However, international revenue faced slight declines due to weaknesses in select global markets.
Executive Insights on Trade Challenges
CEO Scott Tidey noted that momentum from the 2024 holiday season was beneficial early in 2025. Nevertheless, the imposition of retaliatory tariffs in April, which raised levies on Chinese imports to 145%, has led to decreased visibility. To mitigate these impacts, management is pursuing price increases, accelerating sourcing diversification, and designating its primary distribution center as a foreign trade zone.
Tidey pointed out that approximately 15% of manufacturing bound for the U.S. is now sourced outside China, with expectations of that figure reaching two-thirds by the end of 2025. These adjustments are projected to positively affect margins in 2026.
Outlook Amid Trade Uncertainty
While first-quarter results initially indicated that HBB was on course to meet full-year targets, the rising tariff uncertainty has led the company to suspend forward guidance. CFO Sally Cunningham cited the unpredictability of global trade negotiations as the reason for this decision. However, management remains confident in its mitigation strategies, including planned price increases and proactive inventory purchases ahead of tariff impacts.
Shareholder Returns and Financial Health
During the quarter, Hamilton Beach repurchased 141,435 shares for $2.7 million and distributed $1.6 million in dividends, reaffirming its commitment to shareholder returns. As of March 31, 2025, the company’s net debt plummeted to $1.7 million, down from $23.7 million a year earlier. Capital expenditures were recorded at $516,000, leaving the company with $48.3 million in cash at the quarter’s end.
The Health segment, particularly the HealthBeacon platform, is achieving continued growth with its third consecutive quarter of rising patient subscriptions. A new partnership with OptumHealth is expected to contribute to this growth starting in the second quarter.
