Hamilton Beach Net Falls 71 Percent in First Quarter
May 5, 2011,
CLEVELAND-"Margin compression" took the blame for a steep 71 percent drop in net income for the Hamilton Beach brand in the first quarter, according to a statement from parent company NACCO Industries.
The reduction in the brand's margins stemmed from increased transportation and product costs, which NACCO said would likely slim down Hamilton Beach's bottom line for the entire fiscal year. The parent company said the brand would "adjust" product prices and placements if these costs continue to increase, which is expected. In addition, Hamilton Beach is moving its distribution center to a larger facility in this current quarter to increase distribution efficiencies.
Hamilton Beach lagged well behind the parent company in the first quarter. NACCO as a whole registered net income of 62.8 million, up 437 percent from the first quarter of last year, in a net sales gain of 34 percent to $745.5 million. The bottom-line gain occurred due to improved sales volume and gross-profit gains in its materials-handling group.