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Michael Vodicka

Lifetime Brands, Inc.

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Lifetime Brands, Inc. recently hit a new multi-year high at $15.99 after returning to profitability in its early May, Q1 results. Estimates are on the rise as the company benefits from a strong consumer environment.

Company Description

Lifetime Brands, Inc. designs and sells a line of consumer goods for food preparation, tabletop and home decor in North America. The company was founded in 1945 and has a market cap of $191 million.

First-Quarter Results

Revenue for the period was down about $1.5 million from last year to $88.7 million, but earnings came in far better than expected at 6 cents per share, blowing past the Zacks Consensus Estimate calling for a loss of 5 cents. The solid earnings surprise pushed the company's average earnings surprise to 82% over the last four quarters.

Lifetime Brands drove its bottom line with some impressive margin growth, with gross margin expanding to 37% from 33% last year on a more favorable product mix and lower royalty and freight expenses.

The company also saw its sales, general and administrative costs drop, with CEO Jeffrey Siegel noting that "Our first-quarter 2010 results benefited from our 2008 and 2009 restructuring and inventory reduction efforts. Selling, General and Administrative Expenses in this year’s first quarter decreased 6.4% compared to the 2009 period."

Balance Sheet Improving

The company's strong cash flow has helped it strengthen its balance sheet, with its total debt load down $57 million from last year to $91 million.

Estimates Advance

Estimates took a nice jump forward on the solid performance, with the current year adding 14 cents to $1.09. The next-year estimate is up 9 cents in the same time to $1.26.

Valuation

After a string of big gains, LCUT's forward P/E of 14.37X is a premium to its peers 11.64X.

The Chart

LCUT recently hit a new multi-year high at $15.99 after breaking above some short-term resistance at $15. The MACD below the chart is bullish too, with the short-term moving average advancing ahead of its long-term counterpart. Look for support from the trend line an any weakness, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.

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