Hamilton Beach cuts 2026 revenue outlook to flat despite third-quarter growth
Key Facts
Hamilton Beach Brands reported results on November 4 for the third quarter ended September 30, showing revenue and earnings growth alongside a cut to its full-year outlook. The company now expects 2026 revenue to remain flat year over year, after previously estimating growth near the mid-single-digit range. It also now expects operating profit to decline in the high-teens range, compared with its previous estimate of a decline in the high-single-digit range. The CEO said a deterioration in consumer sentiment over the prior two months led several retail partners to take a cautious approach to seasonal inventory commitments. That puts strong quarterly performance against a more cautious view of holiday-season sales.
Quarterly revenue rose 5.6% to $140.3 million, from $132.8 million in the third quarter of 2025. The company attributed the increase mainly to growth in its U.S. consumer business, supported by strong double-digit growth in its health business. Net income rose to $3.5 million, or $0.26 per diluted share, compared with $1.7 million and $0.12 per share a year earlier. Gross margin widened to 27.5% from 21.1%, an increase of 640 basis points. The company linked the improvement in margin to sales of inventory no longer subject to IEEPA tariffs, while the year-earlier period saw tariffs on imports from China temporarily rise to 125%.
Despite quarterly growth in sales and profitability, the company said lower revenue expectations and higher incentive expenses would weigh on operating profit in 2026. The shift from an expected decline in the high-single-digit range to one in the high-teens range reflects a substantial change in its assessment of the earnings trajectory. In August, the CEO had said the company entered the second half of the year with momentum after volumes recovered and it took steps to mitigate the impact of tariffs. In the second quarter, revenue was $142.6 million, up 11.6% year over year, compared with $127.8 million in the year-earlier period. The company then kept its 2026 revenue outlook unchanged and raised its operating margin outlook, before caution among retail partners prompted it to revise its view in November.
By contrast, Hamilton Beach raised its forecast for cash flow from operations, less cash used for investing, to a range of $40–50 million from $35–45 million previously. It attributed the increase mainly to working capital returning to normal after tariff-related disruptions. Net cash from operating activities was $80.5 million in the nine months ended September 30, 2026, compared with cash used of $14.6 million in the year-earlier period. The company said the improvement was tied to IEEPA refunds and lower working capital. In the second quarter, it cited tariff refunds of $36.5 million and said gross margin would have been 26.1% excluding those benefits.
On its balance sheet, the company had moved to net cash of $67.5 million as of September 30, 2026, compared with net debt of $32.8 million on the same date a year earlier. It repaid $25 million of debt during the third quarter. It also repurchased 24,908 Class A shares for $0.6 million and paid dividends of $1.7 million. These figures provide financial context for the revised operating profit outlook, alongside the company’s higher forecast for full-year cash flow. It said its adjusted operating profit estimate still includes $6 million in planned additional advertising spending in 2026 and about $5 million in nonrecurring accelerated depreciation.
The company’s shares, which trade under the ticker HBB, closed at $32.42 on November 5, down 6.41% from the previous session, when they rose 6.13% to $34.64. On November 6, Zacks reported that the stock had lost 0.7% since the earnings announcement, compared with a 1.6% return for the S&P 500 over the same period. In a broader backdrop, the company’s 2025 revenue fell 7.3% from 2024 after retailers temporarily halted orders to assess inventory and prices affected by tariffs. Its five largest customers accounted for about 62% of 2025 revenue, underscoring the importance of retail partners’ decisions to the company’s sales. The company warned that actual results could differ materially from its forward-looking statements and said it undertakes no obligation to update them publicly after the date of the statement.