Hội nghị công bố kết quả kinh doanh quý 3/2026 của Lifetime Brands (LCUT): Doanh số tăng 3.4%, biên lợi nhuận mở rộng

Những điểm nhấn chính

• Lifetime Brands (LCUT) công bố doanh thu thuần quý 3/2026 đạt 177,7 triệu USD, tăng 3,4% so với cùng kỳ năm trước. Doanh thu tại Mỹ tăng 2,0%, trong khi doanh thu quốc tế tăng 18,8%.
• Biên lợi nhuận gộp tăng 140 điểm cơ bản lên 36,5%, bất chấp khoản dự phòng hàng tồn kho 3,3 triệu USD liên quan đến việc tinh giản SKU.
• Lợi nhuận ròng đã điều chỉnh tăng lên 8,4 triệu USD, tương đương 0,37 USD trên mỗi cổ phiếu pha loãng, từ mức 2,5 triệu USD, tương đương 0,11 USD trên mỗi cổ phiếu pha loãng của cùng kỳ năm trước. Lỗ ròng theo GAAP nới rộng lên 4,2 triệu USD.
• Ban lãnh đạo ước tính sự gián đoạn từ trung tâm phân phối Hagerstown đã làm giảm kết quả quý 3 từ 7 triệu USD đến 10 triệu USD. Cơ sở này đã trở lại nhịp độ giao hàng bình thường vào đầu quý 4.
• Công ty đã cập nhật dự báo doanh thu thuần năm 2026 lên khoảng 660 triệu USD - 700 triệu USD, đồng thời duy trì các khoảng dự báo lợi nhuận hoạt động đã điều chỉnh và EBITDA đã điều chỉnh.
• Hội đồng quản trị đã nâng hạn mức ủy quyền mua lại cổ phiếu của Lifetime Brands lên 20 triệu USD sau đợt tái cấp vốn giúp kéo dài thời hạn đáo hạn nợ sang năm 2031 và giảm chi phí lãi vay hàng quý.

Dữ liệu tài chính trọng yếu

Lifetime Brands làm rõ rằng thông cáo kết quả kinh doanh của công ty thể hiện EBITDA đã điều chỉnh LTM sau giới hạn là 84,5 triệu USD. Ban lãnh đạo cho biết con số dự kiến công bố, nhất quán với cách trình bày trong dự báo cả năm, là 92,4 triệu USD trước giới hạn.

Hiệu quả kinh doanh và hoạt động

Đồ dùng bàn ăn là động lực tăng trưởng lớn nhất trong quý với mức tăng 31% nhờ sự bứt phá của sản phẩm dao thìa dĩa và kênh siêu thị bán sỉ (Warehouse Club). Mảng trang trí nhà cửa cũng hỗ trợ tăng trưởng cho phân khúc Giải pháp Gia đình (Home Solutions), trong khi nhu cầu đối với bộ sưu tập Dolly Parton tăng mạnh. Ban lãnh đạo cho biết công ty gần như đã bán hết nguồn cung sản phẩm Dolly năm 2026 và kỳ vọng chương trình này sẽ tiếp tục đóng góp trong năm 2027.

Mối quan hệ hợp tác với Dollar General tiếp tục được mở rộng. Lifetime Brands gần như không có hoạt động kinh doanh nào với nhà bán lẻ này trong năm 2023 nhưng kỳ vọng doanh số bán buôn năm 2026 sẽ tiệm cận mức 20 triệu USD. Công ty cũng đang phối hợp với Dollar General để phát triển thêm các thương hiệu khác.

Mảng đồ dùng nhà bếp tiếp tục duy trì sự vững vàng. Ban lãnh đạo nhận định tỷ lệ bán hết (sell-through) trong đợt tái ra mắt thương hiệu Farberware là rất khả quan, dù danh mục sản phẩm vẫn đang tiếp tục được tinh chỉnh. Kênh hàng giảm giá (off-price) vẫn là kênh mạnh nhất, kênh bán lẻ đại trà hoạt động ổn định và kênh Club ghi nhận kết quả nổi bật.

Doanh thu quốc tế tăng 18,8% nhờ giá bán cao hơn tại các khu vực và sự tăng trưởng lượng khách hàng ở Úc cũng như New Zealand đã hỗ trợ doanh thu. Ban lãnh đạo cho biết phân khúc quốc tế đã tiệm cận mức hòa vốn, trong khi khu vực châu Á - Thái Bình Dương ghi nhận có lãi tính từ đầu năm đến nay. Bước đi lớn còn lại của Dự án CONCORD liên quan đến Vương quốc Anh, nơi công ty đang xem xét việc rút khỏi một cơ sở đang hoạt động ở mức công suất khoảng 50%.

Trung tâm phân phối tại Hagerstown, Maryland đã khiến công ty bị trễ các đơn giao hàng và phát sinh thêm chi phí trong quý 3. Lifetime Brands đã ghi nhận 5,3 triệu USD chi phí kho bãi không thường xuyên cho việc khởi động, di dời hàng tồn kho, tuyển dụng, đào tạo và chi phí thuê trùng lặp. Ban lãnh đạo cho biết quá trình nâng công suất đã hoàn tất, trong khi cơ sở cũ tại Robbinsville, New Jersey dự kiến sẽ đóng cửa vào cuối năm.

Công ty cũng ghi nhận khoản chi phí tinh giản SKU trị giá 3,3 triệu USD, bao gồm 2,0 triệu USD tại Mỹ và 1,3 triệu USD tại thị trường quốc tế, nhằm giảm giá và thanh lý hàng tồn kho luân chuyển chậm.

Dự báo của ban lãnh đạo

Lifetime Brands đã cập nhật triển vọng doanh thu thuần năm 2026 lên 660 triệu USD - 700 triệu USD bằng cách nâng cận dưới của khoảng dự báo. Công ty vẫn duy trì các khoảng dự báo hiện tại về lợi nhuận hoạt động đã điều chỉnh và EBITDA đã điều chỉnh.

Ban lãnh đạo kỳ vọng sẽ bù đắp được một phần, nhưng không phải toàn bộ, các đơn giao hàng bị trễ liên quan đến Hagerstown trong quý 4. Công ty giữ nguyên dự báo lợi nhuận do mức độ phục hồi đơn giao hàng và bất kỳ tác động vận hành còn lại nào vẫn chưa chắc chắn.

Cho năm 2027, ban lãnh đạo xác định việc không còn chi phí khởi động cơ sở Hagerstown, các lợi ích vận hành đầy đủ từ cơ sở mới, những cải tiến từ Dự án CONCORD, chi phí lãi vay thấp hơn và các chương trình bán lẻ mở rộng là những động lực hỗ trợ tiềm năng. Các kế hoạch chi tiết hơn và ưu tiên phân bổ vốn dự kiến sẽ được trình bày tại Ngày hội Nhà đầu tư vào ngày 1 tháng 12.

Rủi ro và các yếu tố cần theo dõi

• Sự gián đoạn tại Hagerstown ước tính gây tác động tiêu cực từ 7 triệu USD đến 10 triệu USD trong quý 3 và ban lãnh đạo không kỳ vọng sẽ bù đắp được toàn bộ các đơn giao hàng bị trễ.
• Chi phí thuê tính theo đường thẳng và chi phí khấu hao thiết bị mới cao hơn tại Hagerstown sẽ vẫn tiếp diễn ngay cả sau khi các chi phí khởi động một lần kết thúc.
• Ban lãnh đạo nhận định thị trường hàng tiêu dùng lâu bền đang suy yếu, với thị trường chung nhìn chung đi ngang về giá trị bằng đồng USD nhưng sụt giảm về sản lượng.
• Các chương trình bán hàng qua kênh Club có thể không đồng đều do từng sản phẩm riêng lẻ có thể không lặp lại trong các kỳ tiếp theo, dù Lifetime Brands tìm cách bù đắp điều này thông qua đa dạng hóa thương hiệu, ngành hàng và phân khúc giá.
• Các quyết định tìm kiếm nguồn cung ứng vẫn rất nhạy cảm với thuế quan và các điều kiện thương mại. Công ty đã chuyển một phần hoạt động sản xuất trở lại Trung Quốc vào năm 2025 do tổng chi phí trọn gói thấp hơn, đồng thời đóng cửa hoạt động quy mô nhỏ tại Mexico sau khi cơ sở này không còn mang lại hiệu quả kinh tế.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết chi phí phân phối tính theo tỷ lệ phần trăm trên khối lượng giao hàng sẽ quay về gần mức trước giai đoạn chuyển đổi trong năm 2027, một khi các trung tâm phân phối cũ và mới không còn vận hành đồng thời.

Về tăng trưởng quốc tế, ban lãnh đạo cho rằng sự cải thiện này đến từ việc chuyển hướng khỏi các cửa hàng đồ ăn và dụng cụ nấu ăn độc lập tại Vương quốc Anh để tập trung vào các khách hàng lớn cấp quốc gia, bao gồm Dunelm, Next và Tesco. Các sản phẩm được khai thác từ danh mục tại Mỹ, bao gồm các sản phẩm mang thương hiệu KitchenAid, cũng đang hỗ trợ tăng trưởng tại châu Âu, Úc và New Zealand.

Về phân bổ vốn, đợt tái cấp vốn đã mở rộng hạn mức tín dụng tuần hoàn dựa trên tài sản của Lifetime Brands, thay thế khoản vay có kỳ hạn lớn hơn bằng một hạn mức nhỏ hơn và kéo dài toàn bộ thời hạn đáo hạn nợ sang năm 2031. Hội đồng quản trị sau đó đã nâng hạn mức ủy quyền mua lại cổ phiếu từ khoảng 11 triệu USD còn lại theo chương trình trước đó lên 20 triệu USD.

Toàn văn biên bản cuộc gọi báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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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