Lifetime Brands (NASDAQ:LCUT) reported higher second-quarter sales and a return to profitability, with results significantly boosted by a $40.1 million benefit tied to expected refunds of tariffs paid in 2025.
Net sales rose 7.4% year over year to $141.6 million in the second quarter of 2026. Net income totaled $19.6 million, or $0.87 per diluted share, compared with a net loss of $39.7 million, or $1.83 per diluted share, in the prior-year period. Adjusted net income was $26.6 million, or $1.18 per diluted share, compared with an adjusted net loss of $2.6 million, or $0.12 per share, a year earlier.
Tariff Refund Drives Margin and Earnings Increase
Lifetime Brands recorded a $40.1 million benefit for expected refunds of tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. The company said it paid $41.7 million in related tariffs during 2025 and had received approximately $36 million in cash by the time of the call, including $36.4 million cited by Chief Financial Officer Larry Winoker.
Because the tariffs were originally included in cost of goods sold, the refund was also recognized in cost of goods sold. As a result, consolidated gross margin rose to 65.9% from 38.6% in the year-earlier quarter. U.S. gross margin increased to 68.3% from 39.1%, with the refund partly offset by unfavorable product mix.
Income from operations was $31.6 million, compared with a $37.2 million operating loss in the prior-year period. The 2025 loss included a $33.2 million non-cash goodwill impairment charge related to the U.S. segment. Adjusted income from operations rose to $41.1 million from $900,000.
Kay said the company intends to use the refund proceeds to pay related taxes, address inflationary pressures, restore certain spending reductions made during 2025, invest in products and reduce debt. He said compensation reductions have been restored, while investments in new products that had been curtailed are being reinstated. The company is not restoring all headcount reductions, he said.
Lifetime Brands repaid $40 million of term debt since the end of the first quarter, including $20 million during the second quarter and another $20 million in early July. Net debt declined by about $10 million during the quarter and by approximately $39 million since year-end 2025, reaching about $121 million. Liquidity at quarter-end was approximately $151 million.
Sales Growth Led by Warehouse Clubs and E-Commerce
U.S. segment sales increased 7.5% to $128.2 million, while international segment sales rose 6.8% to $13.4 million, or 5.3% in local currency. U.S. sales increased across all product categories, led by warehouse-club programs and, to a lesser extent, e-commerce. International growth was driven by Asia-Pacific and Continental Europe, partly offset by lower sales in the United Kingdom.
Kay said several sizable customer orders shifted from the second quarter primarily into the third quarter, reflecting retailers’ merchandising strategies and delayed product resets. Some shipments also moved because of operational challenges during the opening of the company’s Hagerstown, Maryland, distribution center.
He said consumer durable markets remain soft. Citing third-party Circana data, Kay said the aggregate market for the company’s categories was down roughly 2% to 3% on a dollar basis and down more sharply on a unit basis, in a range of about 7.5% to 10%. He said Lifetime Brands performed better than those broader market trends.
The company’s warehouse-club volume contributed to sales growth but carried lower margins than the company average. Kay also said tariff-related pricing actions have reduced gross-margin percentages in the underlying business as the company focuses on maintaining gross-margin dollars.
Distribution Center Ramp Continues
Lifetime Brands said the Hagerstown facility was online but affected second-quarter shipping and expenses as the operation ramped. U.S. distribution expense, excluding non-recurring costs, was 11.9% of goods shipped from company warehouses, compared with 11% a year earlier, primarily because of labor inefficiencies connected to the move from New Jersey to Maryland.
Non-recurring expenses totaled $2.2 million in the quarter, including inventory relocation, recruiting and training, setup costs and lease expenses related to portions of the New Jersey and Maryland facilities.
Kay said the company expects a smaller impact in the third quarter and expects the Maryland facility to be fully operational by the fourth quarter. He said ramp-up inefficiencies had mostly been resolved and that the company was shipping at a healthy rate, though it still needed to catch up on shipments over the following weeks. The New Jersey facility is expected to cease operations by the end of 2026.
The company said its full-year guidance already incorporates expected incremental one-time costs from the distribution-center startup. However, it cautioned that costs could exceed previous estimates if disruptions continue.
Guidance Raised for Earnings, Sales Outlook Maintained
Lifetime Brands reaffirmed its 2026 net sales outlook of $650 million to $700 million. It raised earnings guidance to reflect the tariff refund, while also accounting for investments, inflation and other costs.
- Adjusted income from operations: $81.5 million to $84 million
- Adjusted net income: $46 million to $47.5 million
- Adjusted EBITDA: $90.5 million to $93 million
Winoker said trailing 12-month adjusted EBITDA through June 30 was $92 million. Interest expense, excluding mark-to-market swap adjustments, fell by $900,000 because of lower average borrowings and lower interest rates.
The company also said it was in the final stages of extending its revolving credit facility and refinancing its term loan. If completed, the transaction would extend all debt maturities to 2031. Kay said the planned financing is intended to improve the mix and tenor of debt, reduce annualized interest expense and retain capacity for potential tuck-in acquisitions.
On products and brands, the company said its redesigned Farberware kitchen-tool line relaunched in the second quarter and had encouraging early sell-through. Lifetime Brands also extended its Dolly Parton license for three years. Kay said the Dolly Parton business is approximately $20 million in annual sales and is expected to grow modestly this year after rapid expansion in prior years. He also cited growth in KitchenAid and Mikasa.
International sales increased and year-to-date losses narrowed materially, with most of the improvement occurring during the second quarter. The company said Project Concorde remains on plan and that it is evaluating options for its U.K. facility. Lifetime Brands continues to target international break-even on a pro forma basis in 2026.
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.
