Shares of Hamilton Beach Brands Holding Company (HBB Quick QuoteHBB - Free Report) have declined 23.2% since reporting results for the first quarter of 2025. This compares with the S&P 500 index’s 0.63% growth over the same time frame. Over the past month, the stock has declined 16.3% against the S&P 500’s 3.4% rally.

Earnings Rebound on Higher Margins & Improved Volume

In the first quarter ended March 31, 2025, Hamilton Beach reported revenues of $133.4 million, up 4% from $128.3 million in the same period last year. Gross profit rose 9% to $32.8 million, with the gross margin expanding 120 basis points to 24.6% from 23.4% a year earlier. Net income stood at $1.8 million, or 13 cents per diluted share, against a net loss of $1.2 million, or 8 cents per diluted share, a year ago.

Hamilton Beach Brands Holding Company Price, Consensus and EPS Surprise

 

Hamilton Beach Brands Holding Company price-consensus-eps-surprise-chart | Hamilton Beach Brands Holding Company Quote

Operating Highlights & Key Business Metrics

Operating profit reached $2.3 million, marking a $3.2-million improvement over the prior year’s $0.9-million operating loss. SG&A expenses declined slightly to $30.4 million due to the absence of prior-year transaction costs related to the HealthBeacon acquisition.

Cash flow from operations was $6.6 million, down from $19.7 million a year ago. The decline stemmed from higher inventory levels due to tariff-related pull-forward activity and a tough comparison to prior-year improvements in receivables collections.

Strength in Core Segments & Strategic Expansion

Hamilton Beach’s first-quarter gains were driven by its North America consumer business, particularly in the United States, supported by positive at-home dining trends. The Premium and Health segments also contributed to gross margin expansion. HealthBeacon, acquired in early 2024, generated $1.5 million in revenues and operated at higher margins, boosting consolidated profitability. Notably, HealthBeacon achieved its third consecutive quarter of rising patient subscriptions, positioning the segment for above 50% growth in 2025, supported by an upcoming partnership with OptumHealth.

Premium segment brands like Numilk and CHI saw strong consumer demand, especially through product launches and partnerships with major retailers. The company plans to strengthen its premium offering with the launch of Lotus, a new brand targeting high-end home cooks, with seven products slated for release later in the year.

E-commerce accounted for roughly 40% of U.S. consumer sales and grew in the mid-single digits, supported by performance across digital platforms and retail partner sites. International revenues were slightly down due to weakness in select global markets.

Executive Perspective: Managing Through Trade Uncertainty

CEO Scott Tidey acknowledged solid momentum from the 2024 holiday season carrying into early 2025. However, visibility dimmed following the imposition of retaliatory tariffs in April, which increased levies on China imports to 145%. Management has taken several steps to mitigate the impacts, including implementing price increases, accelerating sourcing diversification and certifying its primary distribution center as a foreign trade zone.

Tidey emphasized that around 15% of the United States-bound manufacturing has already shifted away from China, with expectations for two-thirds to be sourced elsewhere by the end of 2025. These changes are projected to positively impact margins in 2026.

Cautious Outlook Amid Global Trade Volatility

While first-quarter results initially positioned HBB on track to meet full-year targets, escalating tariff uncertainty has prompted the company to suspend forward guidance. CFO Sally Cunningham cited the unpredictability of global trade negotiations as the basis for this decision. Nonetheless, management reaffirmed its confidence in existing mitigation strategies, including targeted price hikes and pre-buying inventory before tariffs took effect.

Other Developments

Hamilton Beach repurchased 141,435 shares in the quarter for $2.7 million and paid out $1.6 million in dividends, underscoring a continued commitment to shareholder returns. As of March 31, 2025, the company’s net debt stood at $1.7 million, down sharply from $23.7 million a year earlier. Capital expenditure totaled $516,000, and the company ended the quarter with $48.3 million in cash.

The Health segment, which includes the HealthBeacon platform, continued its growth trajectory with a third consecutive quarter of rising patient subscriptions. A new partnership with OptumHealth is expected to contribute to growth beginning in the second quarter.