라이프타임 브랜즈(LCUT) 2026년 3분기 실적 발표 콘퍼런스콜: 매출 3.4% 증가, 마진 확대

핵심 요약

• 라이프타임 브랜즈(LCUT)의 2026년 3분기 순매출은 1억 7,770만 달러로 전년 동기 대비 3.4% 증가했다. 미국 매출은 2.0% 증가한 반면, 해외 매출은 18.8% 늘었다.
• 매출총이익률은 SKU 합리화와 관련된 330만 달러의 재고충당금에도 불구하고 140bp 상승한 36.5%를 기록했다.
• 조정 순이익은 전년 동기의 250만 달러(희석 주당 0.11달러)에서 840만 달러(희석 주당 0.37달러)로 증가했다. GAAP 기준 순손실은 420만 달러로 확대됐다.
• 경영진은 헤이거스타운 물류센터의 운영 차질로 3분기 실적이 700만~1,000만 달러 감소한 것으로 추정했다. 해당 시설은 4분기 초 정상적인 출하 주기를 회복했다.
• 회사는 조정 영업이익과 조정 EBITDA 가이던스 범위를 유지하면서 2026년 순매출 가이던스를 6억 6,000만~7억 달러로 수정했다.
• 이사회는 부채 만기를 2031년으로 연장하고 분기 이자 비용을 줄인 리파이낸싱 이후, 라이프타임 브랜즈의 자사주 매입 승인 한도를 2,000만 달러로 증액했다.

주요 재무 데이터

라이프타임 브랜즈는 실적 발표 자료에 한도 적용 후 LTM 조정 EBITDA가 8,450만 달러로 기재되었다고 명확히 밝혔다. 경영진은 연간 가이던스 발표 방식과 일치하는 의도된 수치는 한도 적용 전 기준 9,240만 달러라고 설명했다.

사업 및 영업 실적

식기류(테이블웨어)는 플랫웨어와 창고형 할인점 채널의 호조에 힘입어 31% 증가하며 분기 최대 성장 동력으로 작용했다. 홈데코 역시 홈솔루션 부문의 성장을 뒷받침했으며, 돌리 파튼(Dolly Parton) 컬렉션에 대한 수요도 크게 늘었다. 경영진은 회사가 2026년 돌리 제품 공급 물량을 대부분 소진했으며, 이 프로그램이 2027년에도 실적 기여 요인으로 남을 것으로 예상된다고 밝혔다.

달러 제너럴(Dollar General)과의 거래 관계는 지속적으로 확대됐다. 라이프타임 브랜즈는 2023년 당시 이 유통업체와의 거래가 거의 없었으나, 2026년 도매 매출은 2,000만 달러에 근접할 것으로 예상하고 있다. 또한 회사는 달러 제너럴과 추가 브랜드 협업도 진행 중이다.

주방용품 부문은 견조한 흐름을 유지했다. 경영진은 파버웨어(Farberware) 리론칭에 따른 판매 소진세가 고무적이라고 설명했으나, 제품 구성 개선은 계속 진행되고 있다. 오프프라이스는 여전히 가장 강력한 채널로 유지됐고, 대형 유통은 견조한 실적을 냈으며, 창고형 할인점 채널은 두드러진 성과를 보였다.

전 지역에 걸친 판매가 인상과 호주 및 뉴질랜드에서의 고객 증가가 매출을 뒷받침하면서 해외 매출은 18.8% 증가했다. 경영진은 해외 부문이 손익분기점에 근접했으며 아시아 태평양 지역은 연초 대비 누적 기준으로 흑자를 냈다고 밝혔다. 한편 프로젝트 콘코드(Project CONCORD)의 남은 주요 과제는 영국에 관한 것으로, 회사는 가동률이 약 50% 수준인 현지 시설에서의 철수를 검토하고 있다.

메릴랜드주 헤이거스타운 물류센터로 인해 3분기 중 출하 차질과 추가 비용이 발생했다. 라이프타임 브랜즈는 초기 가동, 재고 이전, 채용, 교육 및 중복 임차료와 관련해 530만 달러의 일회성 물류센터 비용을 인식했다. 경영진은 램프업(가동 확대)이 완료되었으며, 뉴저지주 로빈스빌의 기존 시설은 연말까지 폐쇄될 예정이라고 설명했다.

회사는 또한 회전율이 낮은 재고의 가격 인하 및 정리를 위해 미국 200만 달러, 해외 130만 달러를 포함한 총 330만 달러의 SKU 합리화 비용을 계상했다.

경영진 가이던스

라이프타임 브랜즈는 전망치 하단을 상향 조정하며 2026년 순매출 가이던스를 6억 6,000만~7억 달러로 수정했다. 기존 조정 영업이익 및 조정 EBITDA 가이던스 범위는 그대로 유지했다.

경영진은 4분기 중 헤이거스타운 관련 출하 지연 물량의 일부를 만회할 것으로 예상하지만, 전량을 회복하지는 못할 것으로 내다봤다. 출하 회복 정도와 잔여 운영 영향이 불확실함에 따라 수익성 가이던스는 기존대로 유지했다.

2027년과 관련해 경영진은 헤이거스타운 초기 가동 비용의 소멸, 신규 시설의 본격적인 운영 효과, 프로젝트 콘코드 개선 성과, 이자 비용 감소, 유통 프로그램 확대를 잠재적 순풍 요인으로 꼽았다. 보다 구체적인 계획과 자본 배분 우선순위는 12월 1일 인베스터 데이에서 발표될 예정이다.

위험 요인 및 주시할 부분

• 헤이거스타운 물류 차질로 인한 3분기 부정적 영향은 700만~1,000만 달러로 추정되며, 경영진은 지연된 출하 물량을 모두 만회하기는 어려울 것으로 보고 있다.
• 헤이거스타운의 일회성 초기 가동 비용이 종료된 이후에도 정액 임차료와 신규 장비 관련 감가상각비 증가는 지속될 예정이다.
• 경영진은 소비재 내구재 시장이 부진하며, 전체 시장 규모는 금액 기준으로는 비교적 정체된 반면 출하량(수량) 기준으로는 감소했다고 설명했다.
• 창고형 할인점 채널 프로그램은 개별 제품이 다음 분기나 연도에 반복 판매되지 않을 수 있어 실적이 불균등할 수 있으나, 라이프타임 브랜즈는 다양한 브랜드, 카테고리, 가격대를 통해 이를 상쇄하고자 한다.
• 소싱 관련 결정은 관세와 무역 조건에 여전히 민감하다. 회사는 총비용이 더 낮다는 판단에 따라 2025년에 일부 생산 물량을 다시 중국으로 이전했으며, 채산성이 떨어진 멕시코의 소규모 사업장은 폐쇄했다.

애널리스트 Q&A 주요 내용

경영진은 신구 물류센터의 병행 운영이 종료되면 2027년 중 출하액 대비 물류비 비율이 이전 수준에 가깝게 회복될 것이라고 말했다.

해외 사업 성장에 대해 경영진은 영국의 독립 다이닝 및 조리용품 매장에서 벗어나 더넬름(Dunelm), 넥스트(Next), 테스코(Tesco) 등 대형 전국 유통망으로 전환한 점을 실적 개선 요인으로 꼽았다. 또한 키친에이드(KitchenAid) 브랜드 제품을 비롯해 미국 포트폴리오에서 조달한 제품들도 유럽, 호주, 뉴질랜드에서의 성장을 견인하고 있다.

자본 배분과 관련해 이번 리파이낸싱을 통해 라이프타임 브랜즈의 자산기반 회전신용(ABL) 한도가 확대됐고, 기존 대규모 기간계 대출이 소규모 대출로 대체됐으며, 모든 부채 만기가 2031년으로 연장됐다. 이에 따라 이사회는 이전 프로그램 하에서 약 1,100만 달러 남아 있던 자사주 매입 승인 한도를 2,000만 달러로 증액했다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, ladies and gentlemen, and welcome to the Lifetime Brands Third Quarter 2026 Earnings Conference Call.

[Operator Instructions]

This event is being recorded. I would now like to introduce your host for today's call, Jamie Kirchen. Mr. Kirchen, you may go ahead now.

Jamie Kirchen

Good morning, and thank you for joining Lifetime Brands' third quarter 2026 earnings call. With us today from management are Rob Kay, Chief Executive Officer, and Larry Winoker, Chief Financial Officer.

Before we begin the call, I'd like to remind you that our remarks this morning may contain forward-looking statements that relate to the future of the company, and these statements are intended to qualify for the safe harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance, and factors that could influence our results are highlighted in our earnings release, and other factors are contained in our filings with the Securities and Exchange Commission. Such statements are based upon information available to the company as of the date hereof and are subject to change for future development. Except as required by law, the company does not undertake any obligation to update such statements.

Our remarks this morning and in our release also contain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in such release is a reconciliation of these non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP.

With that introduction, I'd like to turn the call over to Rob Kay.

Operator

Yes, that's fine. Pardon me. We're going to pass the call over to Mr. Rob Kay to begin his portion of the call.

Robert Kay

Thank you, Chuck. Thank you, and good morning, everyone.

The third quarter was a quarter of notable progress for Lifetime. Net sales grew 3.4% to $177.7 million. Gross margin expanded 140 basis points to 36.5%, and that is after absorbing a $3.3 million inventory charge tied to a SKU rationalization I'll elaborate upon shortly. Adjusted net income was $8.4 million, or $0.37 per diluted share, up from $0.11 a year ago. EBITDA also grew noticeably in the quarter. Note that this morning's press release reported current period adjusted LTM EBITDA of approximately $84 million. The number should have read $92.4 million. LTM adjusted EBITDA before limitations was strong at that $92.4 million compared to prior quarter LTM adjusted EBITDA of $90.1 million calculated under the terms of our credit agreement.

We grew over last year, but we should have grown more. Bringing a distribution center the size of our new Hagerstown, Maryland facility online is no small undertaking. And while we planned for startup costs and challenges, the ramp took longer than we had planned. As we noted on our second quarter call, we anticipated carryover of startup issues into the third quarter, and the transition resulted in missed shipments and added costs. These ramp-up issues have been addressed and we are shipping in a normal cadence as of the beginning of the fourth quarter. We are confident the ramp-up phase is complete and now behind us.

Hagerstown is a 1 million-plus-square-foot facility built to consolidate our East Coast distribution and to be our most efficient building. It is now positioned as the linchpin of Lifetime's North American operations. Now that it is fully operational, Hagerstown is already contributing to our operational efficiency. In October, our peak shipping month, Lifetime shipped approximately $7 million of product, a near record for our company excluding the COVID period. While the third quarter was adversely impacted by missed shipments due to these ramp-up issues, we do expect to recover some, but not all, of the shipments missed during the fourth quarter. And as we move into 2027, we will have the full efficiency benefit of this building without the startup costs.

Notwithstanding the Hagerstown ramp-up, the underlying business is performing well in an end market that remains soft in consumer durables. End markets continue to exhibit divergent performance across channels. Off-price remains the strongest part of the market and we continue to grow there. Mass is performing solidly and Club has been a standout. We have grown meaningfully in the Club channel this year, ahead of the broader category. There is a consistent theme here: when times are tougher, people eat at home more and they cook and entertain at home more, and that plays directly to our portfolio.

Kitchenware, our largest category, is performing well. The Farberware relaunch, our largest brand, is in the market and performing. As with any relaunch of that scale, we are refining the assortment based on what we're seeing on the shelf, but sell-through has been encouraging. Tableware was our largest growth driver in the quarter, up 31%, led by flatware and the Warehouse Club channel. Home decor continues to be a growth engine, driving growth in Home Solutions. Demand for the Dolly Parton collection has stepped up significantly and the line has become something of a collectible. For 2026, we are largely sold through supply of Dolly products.

We see strong demand going into 2027, and we expect the program to be a solid contributor. The program has also expanded beyond its launch partner. That launch partner is Dollar General, and it has become one of our best growth stories. We had essentially no business with Dollar General in 2023. This year, we expect wholesale sales to approach $20 million. We are now working with Dollar General on additional brands, and we see a long runway for that relationship.

Project CONCORD is working. International sales grew 18.8% in the quarter, and the segment approached break-even. Asia Pacific, which had been losing money, is profitable year-to-date. In Australia and New Zealand, the top line is growing nicely, and we're focused on operations for that locale. We have one significant step left in CONCORD in the U.K., which we expect to contribute meaningfully to the profitability of this segment, and we hope to share more on that in the coming months.

This quarter, we took a $3.3 million charge, primarily in the U.S., with a smaller portion in the U.K., to mark down and exit slow-moving inventory. This timing was deliberate. When you're closing 1 building and opening another, it makes no sense to pay to move product which is slow moving. This makes us leaner and more profitable going forward, and we have excluded it from our adjusted results.

As previously disclosed, we completed a full refinancing of our debt this year. We expanded our low-cost asset-based facility and replaced our larger term loan with a much smaller one, which can be scaled up if we need it. The result is a meaningfully lower cost of capital and a more flexible structure. You can already see it in the numbers. Interest expense was $2.1 million this quarter versus $5 million a year ago. And Larry will walk you through the details.

Our new structure also removes restrictions that limited our ability to buy back stock under our old agreement. As announced this morning, our Board has increased our repurchase authorization to $20 million from approximately $11 million remaining under the prior program. We view this as an important tool to have in place, and we now have the full flexibility to use it opportunistically. Put simply, we have rebuilt our balance sheet and we now have significant capacity and flexibility to invest in growth, including acquisitions.

We plan to lay out our full capital allocation strategy at our Investor Day in New York on December 1st. Turning to guidance, we are raising the low end of our net sales range to $660 million to $700 million. We are maintaining our adjusted income from operations and adjusted EBITDA ranges. Our GAAP earnings guidance reflects the one-time costs discussed today.

Looking ahead, we see a number of tailwinds building into 2027. Hagerstown startup costs and disruptions will be behind us. We'll have the full efficiency of that building. We'll have the full-year benefit of Project CONCORD in international, and our refinancing lowers our interest costs. Additionally, we are growing with programs with many retailers, including Dollar General, as I discussed, and we have momentum in many of our categories, as I just described.

We look forward to going into detail of our plans and strategies during our upcoming Investor Day. We'll lay all of this out in detail on December 1st, and I hope many of you will join us. With that, I'll turn it over to Larry.

Laurence Winoker

Thanks, Rob. As we reported this morning, net loss for the third quarter of 2026 was $4.2 million, or $0.19 per diluted share, as compared to net loss of $1.2 million, or $0.05 per diluted share, in the third quarter of '25. Adjusted net income was $8.4 million for the third quarter of '26, or $0.37 per diluted share, compared to net income of $2.5 million, or $0.11 per diluted share, in '25. Loss from operations was 0 in the third quarter of '26, as compared to income from operations of $6.7 million in the 2025 period. Loss from operations for the current period included a charge for an inventory reserve for SKU rationalization of $3.3 million. Adjusted income from operations for the third quarter of '26 was $13.8 million, as compared to $11.5 million in the 2025 period.

The 2026 period included adjustments for acquisition-related intangible amortization of $4.3 million, warehouse relocation and redesign of $5.3 million, SKU rationalization of $3.3 million, and other expenses of approximately $900,000. The 2025 period also included adjustments for acquisition-related intangible amortization of $4.4 million, restructuring of $300,000, and warehouse relocation and redesign of approximately $100,000.

Adjusted EBITDA for the 12-month period ended September 30, 2026 was $92.4 million before limitations. Note that in this morning's earnings release, we reported $84.5 million, which is after limitations. While we had no limitations in the 2Q report, it was our intention to be consistent and report before limitations. The limitations in this quarter were due to one-time expenses incurred for the move of our East Coast distribution operations and SKU rationalization. Reporting before limitations is consistent with how we reported our full-year guidance. Again, adjusted EBITDA for the 12-month period ended September of '26 was $92.4 million before limitations, an increase of $2.3 million for the current quarter. Adjusted non-GAAP financial measures are reconciled to our GAAP financial measures in the earnings release.

The following comments are for the third quarter of 2026 and 2025 unless stated otherwise. Consolidated net sales increased by 3.4% to $177.7 million. U.S. segment sales increased by 2% to $161.3 million. Within the segment, product line increases were in tableware and Home Solutions, driven by warehouse clubs, partially offset by decreases in kitchenware, driven by lower warehouse club e-commerce sales, which included the impact to ramp up the new East Coast distribution facility in Hagerstown, Maryland.

International segment sales increased by 18.8% to $16.4 million. The increase was driven by higher selling prices in all regions and continued growth with retail customers in Australia and New Zealand. Consolidated gross margin increased to 36.5% from 35.1%. The U.S. segment gross margin increased to 36.8% from 35.1%. The improvement in the gross margin percentage was attributable to lower-cost products resulting from reduced tariffs relative to the prior year and favorable product mix, partially offset by a $2 million SKU rationalization charge.

International gross margin decreased to 34.1% from 35.5%, driven by the $1.3 million SKU rationalization charge recorded there, partially offset by expanded gross margin resulting from higher selling prices and favorable customer mix. U.S. segment distribution expenses as a percentage of goods shipped from its warehouses, excluding non-recurring expenses, was 11.3% versus 8.5%. The increase was due to lower shipment volume, resulting in an unfavorable absorption of fixed expenses driven by higher occupancy and depreciation for the new facility. Also included were inefficiencies associated with operating the old and new facility concurrently. Freight-out expenses increased due to higher freight rates and customer mix.

Non-recurring warehouse expenses for the current period were $5.3 million, which related to one-time expenses to start up the new facility and exit the old one. These included labor, relocation of inventory, recruiting and training, setup costs, and duplicate rent for the non-operational portion of the 2 facilities. International segment distribution expenses as a percentage of goods shipped from its warehouses improved to 24.4% from 22.6%. The improvement was due to higher sales resulting in a favorable impact on fixed expenses.

Selling, general, and administrative expenses increased by 7.6% to $38.2 million. U.S. segment expenses increased $1.7 million, or 6%, to $30.1 million. As a percentage of net sales, expenses increased to 18.7% from 18.0%. The increase in expenses was driven by higher incentive compensation. International SG&A increased to $3.7 million from $3.4 million. This increase was driven by foreign currency exchange losses. As a percentage of net sales, expenses decreased to 22.6% from 24.6%. The lower percentage was due to the impact of fixed costs on higher sales volumes.

Unallocated corporate expenses were $4.4 million compared to $3.7 million in '25. The increase was due to incentive compensation and higher professional fees. In addition, we restored salary cuts implemented last year to partially mitigate the adverse impact of tariffs. Restructuring expenses were $600,000 compared to $300,000 last year. In the current year, $500,000 was for employee severance related to exiting the old facility, and $100,000 was for the U.K. Project CONCORD employee severance.

Interest expense, excluding mark-to-market adjustments for swaps, decreased from $5 million to $2.1 million due to lower average outstanding borrowings, favorable mix of the new debt structure, and $1.4 million of interest income received from tariff refunds. The loss on extinguishment of debt of $2.5 million relates to the write-off of the unamortized issuance costs related to the recent refinancing. The effective tax rate was 9.3% versus 171.1% last year. These rates differ from the federal statutory rate of 21%, primarily due to the impact of non-deductible expenses in the current quarter and a partial valuation allowance recorded on deferred tax assets related to the goodwill impairment in the 2025 period.

Looking at debt and our liquidity, our balance sheet was further strengthened by the August debt refinancing. We amended our revolving credit facility and refinanced our term loan, which, among other things, extended all our debt maturities to 2031. The term loan, like the credit facility, is asset-based. The terms of the agreement will provide us with more flexible liquidity and flexibility in the use of our capital. At quarter-end, our liquidity was approximately $123 million, which included cash plus availability under our credit facility and receivable purchase agreement.

This concludes our prepared comments. Operator, please open the line for questions.

Operator

[Operator Instructions]

Our first question today will come from Matthew Koranda with Roth Capital. Please go ahead.

질의응답

Matthew Koranda

You mentioned, I think in the prepared remarks, $5.3 million in adjustments for warehouse startup costs. I assume that's all for Hagerstown. Are there any inefficiencies, I guess, at that facility that you can call out that weren't added back? And then now that it's shipping normally as of the fourth quarter, can you just call out the benefits to operating expenses, how those show up in the P&L going forward?

Robert Kay

So hi, Matt. All of the costs are related to Hagerstown. Larry went through a lot of the costs. There's different buckets of those costs, but there's inefficiencies as you're ramping up. No, not everything is added back, particularly lost revenues when we had problems from the ramp-up experience, that's just lost and flows through our numbers, and it's not added back. It's really just the cost of ramping up the facility, the redundancy from a labor perspective, having 2 facilities, and a lot of things that Larry walked through.

The biggest benefit we're going to see on a go-forward basis is, now that the facility is up and running, we won't have the ramp-up costs, and Robbinsville, the New Jersey facility, is empty, will be shut by the end of the year. So it's just cleanup and dilapidation at this point. And that will all disappear and we'll be on a pristine clean basis on a go-forward basis with no noise.

Laurence Winoker

Yes, Matt, just to make -- maybe you said something in response to your question. So what we didn't add back, to be more specific if I can, is that in the new facility, because I want to get into GAAP issues here, but because we have a new lease, you have the straight-line rent over the lease period of 15 years. So your rent expense is going up, but our cash rent is actually approximately what we were paying in our old facility. Nevertheless, GAAP, you have to record it that way. So that will persist, as well as we bought new equipment for the facility, so our depreciation expense will be higher. Both of those don't get added back.

The other thing is that it's just inherent inefficiency operating 2 facilities. And normally it would be very efficient, right? You move into 1, but during this period, we just have normal inefficiencies, not because of the actual move-in training people, but because you have to -- let me say you have 2 lines in each location, and you'd normally have 1 supervisor. Well, if you have 1 in Maryland, you have to also have 1 in New Jersey. So those inefficiencies you don't get to add back over, let's say, maybe not the fourth quarter, but I think certainly in 2027, you'll see the distribution expense as a percent of shipping be pretty much as it had been before we moved.

Matthew Koranda

Okay, very clear. Appreciate the color on that stuff, guys. And then just for the implied outlook for the fourth quarter looks good on sales, but you kind of held the adjusted EBITDA outlook unchanged for '26. Maybe I just wanted to hear a little bit about the drivers there that underpin the implied fourth quarter outlook and how to think about the margin flow-through to the end of the year.

Robert Kay

Yes, I think the big unknown that'll play out in the quarter is any hangover from now that Hagerstown is operating as normal and recovery of some, as I said, but definitely not all, of some missed shipments that we had. So there's definitely upside, but there's a lot of unknowns, so we left things unchanged in terms of our guidance. But on sales, we saw we were definitely running ahead, and that's why we wanted to narrow the range and moved up from the low end.

Matthew Koranda

Okay, makes sense. Maybe this last one on Project CONCORD, just an update there, I guess, since we're kind of hitting break-even in terms of profit contribution there, I wanted to hear a little bit about sort of how that may shift to a contributor in '27 versus being a drag for the last couple of years. And then what's driving the really strong growth in the EU region? It looks really positive in the quarter, and how sustainable is that growth rate that you put up?

Robert Kay

So I'm going to punt on the first question mostly by saying that we'll give you full details of next year on December 1st on Investor Day. But the business actually on a pro forma basis was break-even for the quarter, and a lot of the growth is, you know, we changed the business strategy. We also changed the product offering.

And if you look at the U.K. historically, which is the bulk of the business, historically that business was sold to dining cook shops, which would be the equivalent in the U.S. of independent gourmet shops. And it's taken time, but we've transitioned that to the larger national accounts, such as Dunelm and Next and Tesco and the like. And we're getting good traction there, which we've talked about. But those wins that we've had there are running through our shipments and financial statements now, and we're getting the benefit from that.

So that's been driving us. Unfortunately, the independent sector has, particularly since COVID, continued to decline. So it's really the shift, and as we've shifted our product strategy to products, a lot of them from the U.S. such as KitchenAid, is driving a lot of growth throughout the whole European continent for us, and international as well. And it's driving a lot of growth in Asia Pacific and Australia and New Zealand for us as well.

Matthew Koranda

Okay, I appreciate that color, Rob. I'm looking forward to hearing more from you guys on the outlook in December.

Robert Kay

Thanks, Matt.

Operator

The next question will come from Anthony Lebiedzinski with Sidoti & Company. Please go ahead.

Anthony Lebiedzinski

As we look at the reported numbers for revenue, how do we think about the pricing impact versus unit volumes overall for the quarter?

Laurence Winoker

Yes, there was some reduction in pricing, reflective of the lower cost in sourcing the goods because of tariffs. Our margins, just because we kept the gross profit the same -- just as when we implemented higher prices, we only increased it by the amount of our costs, so the gross profit percentage went down, so we've had obviously the opposite effect.

Robert Kay

If you want to talk about units, yes, I mean, in general, the market has been relatively flat on a dollar basis, but down unit-like overall. And we've seen some of that, so we've been able to pick up some share. We've had some successes, as I talked about, and that's been helping us on both, but stronger on dollar than unit.

Anthony Lebiedzinski

That's very helpful context. As we think about the SKU rationalization that you guys did in the third quarter, on a go-forward basis, how do we think about the structural gross margin benefits from this SKU rationalization?

Robert Kay

So our go-forward margin profile should be as we've expected and experienced in the past. If you look at what we did, again, when you're moving facilities into 1 big facility, there's stuff that we could sell, but it's more efficient and ultimately more economically beneficial to write off. And we're preparing to do something similar in the U.K. So the U.K. facility that we operate in is maybe 50% utilized. So the last step in Project CONCORD is we're looking to exit that facility, and in anticipation of that, we did a SKU rat there as well, and we're doing it all at once.

Anthony Lebiedzinski

Okay, that's very helpful. And then you guys mentioned that you had some missed shipments and added costs for Q3 because of the move to the Hagerstown facility. Is there any way to try to quantify that, or just basically how impactful do you think that was in the quarter?

Robert Kay

Sure. It's not very easy to quantify it in total detail, so we're still working on that, but we believe it to be between $7 million and $10 million in impact -- negatively, obviously -- in the third quarter. That's why my comments, Anthony, were, you know, we did well and we grew, but we would have done a lot better.

Anthony Lebiedzinski

Okay. So that certainly helps to kind of frame things. Got it. And then lastly, as far as the share buyback that you announced today here, is this something that you think you'll be looking to do right away? Or what's the timeframe for that as far as when you think you can put that to use?

Robert Kay

So, you know, as we've discussed publicly and in view, we believe that the intrinsic value, the economic value, is not reflected currently in this trading price. So we would use a stock buyback to, we think, create value to all of our shareholders by buying back the stock at this level.

Anthony Lebiedzinski

Okay. All right. Well, thank you. I look forward to seeing you guys in early December.

Robert Kay

Likewise. Thank you.

Operator

The next question will come from Linda Bolton-Weiser with Water Tower Research. Please go ahead.

Unknown Speaker

So you mentioned maybe a quarter or 2 ago on your call that you were still looking to diversify your outsourced manufacturing base. We'll probably hear more about this in December, but can you talk about what areas you're looking at? And also, can you remind us what you're doing with the facility in Mexico? I think there was something there that you were working on, and I haven't heard you mention it. Can you give us a little update on that?

Robert Kay

Sure, Linda, hi. When we looked throughout the world, starting a bunch of years ago when we came to the conclusion that the West, I guess now the U.S., has decoupled with China, we started everything from Turkey, which we didn't do much -- we didn't find for a lot of reasons that to be appropriate -- Mexico, as you mentioned. We looked at resourcing in the U.S., and it made no economic sense. What made most economic sense was throughout many geographies in Southeast Asia, which is where we moved a lot of our facilities.

And we did that in conjunction with our key factory vendor relationships where we had not a controlling ownership interest, but we control the majority of the output of those factories. Those factories invested throughout Southeast Asia -- Malaysia, Cambodia, Vietnam, where we already had a big presence, but other things moved there -- and built new factories with their capital and their management.

And these had ramped up. However, in 2025, because the all-in tariff-impacted cost of shipping product was cheaper coming out of China, we moved a lot of that stuff back. Now, in almost all those cases, it was to a factory that might've been in Malaysia, same ownership, same factory that we moved back in China, so it's within the same family. But we shipped mostly out of China in 2025 because the economics made more sense, right? That's not, we believe, sustainable from a political environment, and that will ultimately migrate back to all these geographies.

In China -- sorry, in Mexico, we had an opportunity to make a small acquisition of a factory that we knew had a lot of benefits. And at the time that we did this, it was very cost-beneficial because of the various tariffs throughout the world to move product there. Over time, as trade and tariffs shifted throughout the world, it became uneconomical. It was very small, and it led us to the conclusion, as there's more stability in terms of outlook from a relative trade situation, we shut that down. So that's why you don't hear us talk about it. It was small. We were looking to ramp it up as we were looking at all different avenues several years ago. But as things worked out over time, it was not economical, so we shut it down.

Unknown Speaker

Okay, thank you. And then you're talking a lot about the success of the Club channel and your programs there. I am curious, sometimes for companies, Club channel sales can be lumpy because there are programs that come in and out. Do you have a fair amount of regular program presence in the Club channel, or is it just these programs that are going to come in and out? And how should we think about the sustainability of that growth that we're seeing there?

Robert Kay

Yes, that's a great question. And we like to use the word, it's like quicksand in the Club channel. So you could have a great program. It does really well, and it doesn't anniversary. Our relationship in the Club channel has done very well over time, and there might be programs that we run that shift, like Rabbit for a long time running, I think 4 straight years, had big programs at Costco. The volumes are obviously very big. It did not anniversary, but we still grew at Costco because we're doing other things.

So 1 of the competitive advantages of a company like Lifetime versus a lot of our peers that we compete against is we can offer many brands, many different price points, many different categories, and that is how we operate in the Club channel. So the mix may change, and there are certain things that do, like Mikasa has a very strong presence there, that do stay as a brand category, but the product does change, but we shift what we're selling.

So we're very confident in terms of where we are and the future. Home decor has done very well in Club. If you look several years ago, we did nothing. So it shifts, and we should have a steady progression. But that's how we get around the lumpiness of what you see traditionally in other companies.

Unknown Speaker

Okay, well, thanks for that. That's all for me. We'll see you in December.

Robert Kay

Thanks, Linda. Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Rob Kay for any closing remarks. Please go ahead.

Robert Kay

Thanks, Chuck. Well, thank you, everyone, for participating in our call. I will remind people once again that on December 1st at a NASDAQ site in New York City, we will be hosting an Investor Day starting at 11 a.m. We hope to see people there. You can always listen in. And again, thank you for your interest and support.

Operator

This concludes today's conference. Thank you for attending today's presentation. You may now disconnect.

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