Lifetime Brands, Inc. (NasdaqGS: LCUT), North America's leading resource for nationally branded kitchenware, tabletop, home décor, and lifestyle products today reported its financial results for the three months ended June 30, 2011.
Consolidated net sales for the three months ended June 30, 2011 increased 4.0% to $90.4 million, as compared to consolidated net sales of $86.9 million for the corresponding period in 2010.
Net sales for the Wholesale segment increased 5.9%, or $4.8 million, to $86.3 million in the second quarter of 2011. Net sales for the Retail Direct segment were $1.3 million, as compared to $4.1 million, in the second quarter of 2011. The decline in direct-to-consumer sales reflected reduced promotional activity in the 2011 quarter, as compared to the corresponding quarter in the prior year, as well as the Company’s decision to terminate its print consumer catalog.
Gross margin as a percentage of net sales for the Wholesale segment declined to 36.2% in the second quarter of 2011 from 37.2% in the corresponding period in 2010. The decrease in the Company’s gross margin percentage was primarily attributable to changes in product mix. Gross margin for the Retail Direct segment was 68.0% in the second quarter of 2011 as compared to 66.8% for the corresponding period in 2010. The increase in the gross margin for the Retail Direct segment was the result of reduced promotional activities.Income from operations for the three months ended June 30, 2011 was $4.4 million, as compared to $2.5 million for the corresponding period in 2010. The increase in income from operations reflected lower distribution expense and a reduction in selling, general and administrative expenses in the 2011 period, as compared to the corresponding period in 2010. Interest expense for the three months ended June 30, 2011 declined to $2.0 million from $2.6 million in 2010, which reflected both lower average borrowings and lower interest rates. On July 15, 2011, the Company retired the $24.1 million aggregate principal amount of its convertible notes.
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