Hamilton Beach Brands Holding Co. (HBB) Tops Q1 EPS by 5c

Hamilton Beach Brands Holding Co. (NYSE: HBB) reported Q1 EPS of $0.21, $0.05 better than the analyst estimate of $0.16. Revenue for the quarter came in at $149.2 million versus the consensus estimate of $131.1 million.

Outlook:

The strong momentum experienced by the Company in the fourth quarter of 2020 continued into the first quarter of 2021, driven by strong consumer demand for its products in its core North American market. Demand is expected to remain relatively strong throughout 2021. The Company believes that consumers will continue to cook more at home even as the pandemic recedes, due to the development of new cooking habits. Additionally, household formation by millennials and boomers transitioning to new homes or remodeling are ongoing demographic trends that are expected to continue to drive demand for small kitchen appliances.

In the global commercial market, the food service and hospitality industries are currently rebounding as vaccines are administered and people begin to resume dining out and traveling, although not expected to fully return to pre-pandemic levels in 2021. The Company continues to be optimistic about the potential for the global commercial market and expects significant revenue and profit growth in 2021, based on order patterns and customer input. Hamilton Beach Brands continues to invest in new commercial products and expand its offerings across the food service kitchen. The Company also continues to invest in digital marketing and ecommerce and has strengthened its partnerships with regional and global chains, all of which position it well as the commercial market continues to rebound.

For the first half of 2021, including better-than-expected results in the first quarter, the Company expects revenue to increase and operating profit to increase significantly compared to the first half of 2020.

Certain pressures in the global supply chain that are affecting a wide range of industries could have an impact on the Company's ability to satisfy the anticipated strong demand in the second half of 2021. Material and transportation costs are increasing, and shipping and transportation congestion challenges persist. The company is taking a number of steps to mitigate these conditions.

The Company will provide a more detailed outlook on the second half and full year 2021 when it announces second quarter 2021 results.

The Company continues to make progress with its strategic initiatives to drive growth in revenue and operating profit margin over time. In 2021, the Company plans to further increase its focus on ecommerce and position itself for growth in dollars and share. The Company is supporting growth in the ecommerce channel with a number of digital marketing programs, expansion of its direct-to-consumer distribution operation and increasing its participation with pure-play and omnichannel customers.

In the premium market, the Company plans to support the strong momentum and revenue growth of the last two quarters with continued investments in robust new product development as well as pursuing additional partnerships and licensing agreements to further expand its participation in the premium market.

In 2021, the Company plans to increase investment in new opportunities in the home, particularly in the large and fast-growing health and wellness space. Two examples of this include expanding its air purification offerings and entering the water filtration category.

The Company's leading portfolio of consumer preferred brands and products, which ranges from value to luxury and covers more than 50 categories, is a key competitive advantage. Hamilton Beach Brands introduced nearly 70 new products in 2020 and expects to introduce approximately 130 new products over the years 2021 and 2022. Even with employees working remotely, the Company's new product development process is working well. These accomplishments are playing an important role in the Company's ability to benefit from the broad small appliance demand across the cooking and beverage categories.

For earnings history and earnings-related data on Hamilton Beach Brands Holding Co. (HBB) click here.

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