Lifetime Brands (NASDAQ:LCUT) executives said the company navigated a volatile tariff-driven backdrop in 2025 by moving quickly on pricing, tightening costs, and leaning on improving international performance, helping drive stronger profitability in the fourth quarter despite lower sales.
Tariffs and pricing shaped 2025 performance
Chief Executive Officer Rob Kay said the biggest driver of the year was the macro environment, particularly U.S. tariff actions and the market’s reaction. He highlighted the second-quarter implementation of 145% tariffs on goods sourced from China, which led to broad disruption and, in some cases, order cancellations by both customers and the company. Kay said the immediacy of the tariff implementation would have required selling some products at a loss, prompting internal order cancellations as well.
Fourth-quarter results: sales down, margins and earnings up
Chief Financial Officer Larry Winoker reported fourth-quarter 2025 net income of $18.2 million, or $0.83 per diluted share, compared with $8.9 million, or $0.41 per diluted share, in the fourth quarter of 2024. Adjusted net income was $23.0 million, or $1.05 per diluted share, versus $12.0 million, or $0.55 per diluted share, a year earlier.
Income from operations rose to $20.0 million from $15.5 million. Adjusted income from operations increased to $26.4 million from $20.2 million. For the full year, the company reported adjusted EBITDA of $50.8 million. Kay said adjusted income from operations increased by over 30% year over year in the fourth quarter and noted full-year adjusted EBITDA was over $50 million despite a 5% decline in net sales.
Winoker said consolidated sales decreased 5.2% to $204.1 million in the quarter. U.S. segment sales fell 5.5% to $185.3 million, with price increases providing a favorable impact but retailer buying disruption and dampened consumer spending weighing on demand. Within the U.S. segment, declines in kitchenware and home solutions were partially offset by an increase in tableware.
International segment sales decreased 2.3% to $18.8 million; excluding foreign exchange translation, sales declined $1.4 million, or 6.8%, which Winoker attributed to the U.K. e-commerce business.
Gross margin increased to 38.6% from 37.7%. U.S. gross margin rose to 38.8% from 37.6%, driven by lower ocean freight rates, favorable product mix, and the timing of inventory costs recognized under FIFO accounting, which Winoker said more than offset the adverse effects of tariffs in the quarter. Kay added that the FIFO benefit was aided by pre-tariff inventory and is not expected to persist as that inventory rolls off. International gross margin decreased to 36.8% from 38.6% due to higher customer support spending.
Cost actions: SG&A and distribution efficiency
Management emphasized cost discipline as a key contributor to the quarter. Kay said SG&A was $38 million in Q4, down 12% from the prior-year quarter. Winoker added that U.S. segment SG&A decreased by $3.2 million to $29.6 million and fell to 16.0% of net sales from 16.7%, driven by lower employee expenses, including incentive compensation. International SG&A decreased $1.5 million to $3.1 million, and unallocated corporate expense declined $0.5 million to $5.2 million due to lower employee expenses, partially offset by higher professional fees.
In the Q&A session, Kay characterized the lower SG&A as sustainable in the current state of the business, but he noted that incentive compensation was “hardly any” in 2025 and could increase in 2026 if performance improves.
On distribution costs, Winoker said U.S. segment distribution expenses as a percentage of goods shipped from its warehouses improved to 8.3% from 9.1%, driven by labor management efficiencies following the fully implemented warehouse management system at the West Coast facility and the impact of higher tariff-driven selling prices without a commensurate increase in expenses. International distribution expenses increased to 19.8% from 18.1% due to higher sales to prepaid freight customers and the expansion of sales into the Asia Pacific region.
Brand and channel commentary: Dolly, Taylor, and e-commerce
Kay said Lifetime continues to see benefits from new product development, highlighting the Dolly brand’s growth to approximately $18 million for the year, up over 150%. In response to analyst questions, Kay said Dolly is expanding beyond the dollar channel, where the company has “firm commitments,” and he expects “substantial growth” in 2026.
Kay also pointed to Mikasa Hospitality within a food service initiative, describing the business as one that requires building a “book of business” and then can behave like an annuity for a period of time. While he noted the food service end market was challenged in 2025, he said the company gained share and expects revenue growth in 2026 from that initiative, though he acknowledged uncertainty about broader industry conditions.
Asked about other brands, Kay said Taylor had a “phenomenal year” in 2025 and called it attractive for retailers due to GMROI. He also described Farberware as “very strong” and referred to it as a growth engine. On KitchenAid, Kay said the company had lost some share at Walmart a couple of years ago, with impacts continuing into 2025, but said a relaunch of kitchen tools is gaining traction and a KitchenAid storage product introduced for 2026 is seeing marketplace acceptance.
On channel trends, Kay said e-commerce continued to gain share, with consumers delaying holiday purchases because they could still get delivery quickly. He said the company saw divergence by channel in sell-through performance, and noted that some large retailers reduced safety stock in 2025, creating divergence between sell-in and sell-through. He said Lifetime does not expect that dynamic to be a major factor in 2026.
International restructuring, distribution center move, and balance sheet
Kay said the company’s international segment demonstrated resilience in 2025. For the full year, he reported international sales of $56.7 million, up 1.7% as reported, and down 1.7% on a constant currency basis. He attributed part of the performance to gains in national accounts amid a continued decline in independent shops in Europe.
On “Project Concord,” the company’s international restructuring initiative, Kay said the final phase was delayed due to legal and structural constraints and is expected to be resolved and implemented in the first half of 2026. Winoker also told analysts the international business posted a loss, but one that was “not as pronounced” as in 2024, and said the Concord effort is continuing.
Management also discussed the relocation of the East Coast distribution center to Hagerstown, Maryland. Kay said the new facility will span approximately 1 million square feet, adding 327,000 square feet of capacity versus the current New Jersey site, and is expected to commence operations in the second quarter of 2026. Winoker said exit and start-up costs, including capital expenditures, are expected to be at or below forecast. In the Q&A, Winoker said the company had originally forecast about $9 million of CapEx, potentially somewhat less, with roughly $7 million expected in 2026 for the distribution center after spending a couple of million in 2025.
On liquidity, Winoker said year-end liquidity was $76.6 million, including cash plus availability under the credit facility and receivable purchase agreement. He reported an adjusted EBITDA-to-net-debt ratio of 3.9x at year-end and said the balance sheet remains strong despite higher working capital needs related to tariffs. Interest expense declined by $0.6 million, driven by lower average borrowings and lower rates on variable-rate debt.
Looking ahead, Kay said the company plans to provide full-year 2026 guidance alongside first-quarter results in mid-May. He said recovering sustainable top-line growth is the priority, adding that Lifetime has worked on the cost base and “proven we can protect margins,” with focus shifting to driving volume through existing customer relationships, brands gaining traction, and a pipeline of strategic activity. He also said the company has no intention to change its dividend policy, and discussed interest in M&A opportunities, citing what he described as improved deal flow and valuations relative to recent years.
About Lifetime Brands (NASDAQ:LCUT)
Lifetime Brands, Inc, through its subsidiaries, designs, sources, manufactures and distributes a broad portfolio of consumer products for the home. Headquartered in Garden City, New York, the company operates three primary business segments—Kitchenware, Tabletop & Home Décor and Tools & Storage—providing solutions for food preparation, cooking, serving and storage under both proprietary and licensed brand names.
In the Kitchenware segment, Lifetime Brands offers cookware, bakeware, cutlery and small electric appliances under brands such as Farberware and Chef’sChoice.
