• Total Revenue: $133.4 million, a 4% increase over last year's first quarter.
• Gross Profit: $32.8 million, up from $30.1 million in the year-ago period.
• Gross Profit Margin: 24.6%, compared to 23.4% in last year's first quarter.
• Operating Profit: $2.3 million, compared to an operating loss of $943,000 in Q1 2024.
• Net Income: $1.8 million, or $0.13 per diluted share, compared to a net loss of $1.2 million, or $0.08 per diluted share a year ago.
• Net Cash Provided by Operating Activities: $6.6 million, compared to $19.7 million in Q1 2024.
• Capital Expenditures: $516,000, compared to $942,000 in Q1 2024.
• Net Debt Position: $1.7 million, compared to $23.7 million at the end of the prior year period.
• Share Repurchase: 141,435 shares totaling $2.7 million.
• Dividends Paid: $1.6 million.

• Warning! GuruFocus has detected 4 Warning Signs with CHRW.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hamilton Beach Brands Holding Co (NYSE:HBB) reported a 4% increase in total revenue for the first quarter of 2025 compared to the same period last year.
• The company's gross profit margin improved to 24.6% from 23.4% in the previous year, driven by favorable product mix and higher margin businesses.
• HBB's North American consumer markets, particularly the US, delivered solid growth, contributing significantly to the overall revenue increase.
• The company successfully launched new premium products under the Lotus brand, which are expected to capture a share of the $4 billion premium market.
• HBB's HealthBeacon business segment marked its third consecutive quarter of increasing patient subscriptions, indicating strong growth potential in the healthcare sector.

Negative Points

• The imposition of 20% tariffs by the US on Chinese imports and reciprocal tariffs have created significant uncertainty, impacting visibility into near-term trends.
• HBB has temporarily suspended its practice of providing guidance due to the unpredictability of trade negotiations and tariff impacts.
• The company experienced a decrease in net cash provided by operating activities, dropping to $6.6 million from $19.7 million in the previous year.
• International revenue saw slight declines, partially offsetting the gains in North America.
• The planned wind down of the licensing agreement with Wolf Gourmet is expected to temporarily drag on results.

Q & A Highlights

Q: Can you clarify your gross margin outlook with the tariffs and whether you expect a benefit beyond the 26% gross margin forecasted for this year? A: Sally Cunningham, CFO, clarified that while they are working to mitigate tariffs and accelerate supplier diversification, they do not have visibility to provide a specific outlook on gross margins going forward. The expectation is that diversification efforts will benefit margins in 2026.

Q: As you move sourcing outside of China, are the costs or margins better or worse compared to China? A: R. Scott Tidey, CEO, explained that each product platform and location is different, but they are confident in maintaining margins through pricing activities with retail partners, regardless of cost changes from diversification.

Q: Are major retailers accommodating price increases due to tariffs, or are you facing pushback? A: The company is in ongoing discussions with retailers, focusing on maximizing current inventory and diversifying product sourcing. There is mutual understanding as many retailers face similar challenges.

Q: Will you break out the performance of HealthBeacon, and what should we expect from it? A: Sally Cunningham confirmed that HealthBeacon's performance will continue to be disclosed as a segment in their financial reports. The business is growing at a better-than-expected rate, and they are excited about its future potential.

Q: Can you explain the difference in share repurchase figures in your financial statements? A: The difference arises from two components: the share repurchase program approved by the Board and tax withholdings associated with incentive compensation. These are governed under different plans and reported separately.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.