Shares of Hamilton Beach Brands Holding Company HBB have lost 4.5% since reporting results for the second quarter of 2025. This compares with the S&P 500 index’s 0.1% decline over the same time frame. Over the past month, the stock has fallen 17.2% against the S&P 500’s 2.5% growth.
For the second quarter ended June 30, 2025, Hamilton Beach reported a sharp 18.2% decline in revenues to $127.8 million from $156.2 million in the same period a year earlier. Net income also fell to $4.5 million, or 33 cents per diluted share, from $6 million, or 42 cents per share, in the same period last year. Despite the decline in the top and bottom lines, the company reported a gross margin improvement of 160 basis points to 27.5% from 25.9%, aided by a more favorable customer and product mix.
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
Other Key Business Metrics
Operating profit in the quarter declined 40.4% to $5.9 million from $10 million in the year-ago period. Selling, general and administrative (SG&A) expenses were modestly reduced to $29.1 million from $30.4 million due to lower incentive-related personnel costs. However, these savings were partially offset by one-time severance expenses tied to restructuring efforts.
Cash flow from operations swung to a significant deficit. Net cash used in operating activities was $23.8 million in the first half of 2025 against net cash provided of $37.1 million in the prior-year period. This change was primarily due to higher inventory levels and reduced purchases in the second quarter, leading to lower accounts payable. Inventory buildup in the first quarter in response to anticipated tariff impacts also contributed to this deterioration.
The company repurchased 215,297 shares for $4 million and paid out $1.6 million in dividends during the quarter, reflecting a continued commitment to shareholder returns despite the challenging macroeconomic environment.
Management Commentary
CEO R. Scott Tidey described the second quarter as being marked by “dramatic” trade disruptions due to increased tariffs, specifically a 145% hike on China exports, enacted in April 2025. This caused significant market uncertainty and temporary halts in retail purchasing. In response, Hamilton Beach took several strategic actions, including accelerating manufacturing diversification away from China, selectively raising prices and initiating cost-reduction programs, including an 8% workforce reduction.
Management emphasized that the gross margin improvement was largely attributable to stronger performance from the higher-margin Commercial and Health divisions, alongside a favorable shift in customer mix. Despite the top-line decline, executives expressed confidence in the resilience of the business and its capacity to adapt to external pressures.
Factors Influencing the Headline Numbers
The revenue drop was largely attributed to a temporary pause in retailer purchasing as businesses reevaluated inventory positions and considered the impacts of new U.S. tariffs. While purchasing resumed mid-quarter following the announcement of a framework for a new trade agreement with China, the company noted that final tariff outcomes and their implications for consumer demand remain uncertain.
Additionally, constrained trade advertising and promotional activities were undertaken intentionally to align with subdued retailer demand. These decisions, while strategic, contributed to weaker sales volumes in the U.S. consumer segment. Nonetheless, the international Commercial and HealthBeacon segments continued to contribute positively to both sales and gross margin expansion.
View
Due to prevailing macroeconomic uncertainties, including unresolved tariff negotiations and geopolitical developments, the company opted to withhold financial guidance for the remainder of 2025. Management characterized this as a continuation of a recent policy of not issuing formal forecasts during volatile periods.
Despite this, leadership reiterated confidence in the company’s long-term strategy, especially in the premium appliance space, commercial partnerships, and healthcare offerings. The anticipated broader rollout of the Lotus premium product line and ongoing expansion of the HealthBeacon platform were cited as potential growth levers.
Other Developments
In the second quarter, Hamilton Beach made significant progress with the launch of its Lotus premium brand, which includes the Lotus Perfectionist oven, Top Drip coffee maker and Four Slice toaster. These products debuted exclusively at a strategic retail partner, with broader distribution planned for the fourth quarter and into 2026. A marketing budget of more than $5 million is allocated to support this brand over the next 18 months.
HealthBeacon, the company’s digital health business, also showed year-over-year revenue growth to $1.7 million in the quarter, while cutting its operating loss in half from $2 million to $864,000. The company reaffirmed its goal of growing HealthBeacon’s patient subscription base by more than 50% in 2025.
Hamilton Beach continued its partnership with Sunkist to develop branded commercial juicers and sectionizers, which are already gaining traction in restaurants and schools. Management expects this initiative to represent 5% of commercial business revenues in 2025 and double in 2026.
Zacks’ Research Chief Names “Stock Most Likely to Double”
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company’s customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Hamilton Beach Brands Holding Company (HBB) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).