Lifetime Brands (LCUT) 2026年第三季度业绩电话会：销售额增长3.4%，利润率扩张

核心要点

• Lifetime Brands (LCUT) 公布2026年第三季度净销售额为1.777亿美元，同比增长3.4%。其中美国分部销售额增长2.0%，国际分部销售额增长18.8%。
• 毛利率提升140个基点至36.5%，尽管计提了与SKU精简相关的330万美元存货跌价准备。
• 调整后净利润从上年同期的250万美元（摊薄每股收益0.11美元）增至840万美元（摊薄每股收益0.37美元）。GAAP净亏损扩大至420万美元。
• 管理层估计，黑格斯敦（Hagerstown）配送中心的中断导致第三季度业绩减少700万至1000万美元。该设施在第四季度初已恢复正常发货节奏。
• 公司将2026年净销售额指引更新为6.6亿至7.0亿美元，同时维持调整后营业利润及调整后EBITDA预期区间不变。
• 在完成将债务到期日延长至2031年并减少季度利息支出的再融资后，董事会将Lifetime Brands的股票回购授权额度提高至2000万美元。

关键财务数据

Lifetime Brands澄清称，其财报新闻稿中显示的限制后LTM调整后EBITDA为8450万美元。管理层表示，与全年指引口径一致的实际应为限制前的9240万美元。

业务与运营表现

餐具业务是本季度最大的增长驱动力，得益于刀叉匙餐具及仓储会员店渠道的强劲表现，该业务增长31%。家居装饰亦支撑了家居解决方案业务的增长，同时多莉·帕顿（Dolly Parton）合作系列的需求显著增加。管理层表示，公司2026年Dolly产品供应已基本售罄，预计该项目在2027年将继续贡献业绩。

与达乐公司（Dollar General）的合作关系持续深化。Lifetime Brands在2023年与该零售商几乎没有业务往来，但预计2026年对其批发销售额将接近2000万美元。公司还在与Dollar General就拓展更多品牌展开合作。

厨具业务保持稳健。管理层称Farberware品牌重新推出的售罄率令人鼓舞，尽管产品品类组合仍在持续优化。折扣店渠道依然是最强劲的渠道，大众零售表现稳健，仓储会员店渠道表现尤为亮眼。

国际销售额增长18.8%，各地区售价提高以及澳大利亚和新西兰客户群体的增长支撑了营收。管理层表示，国际分部已接近盈亏平衡，而亚太地区年初至今实现盈利。“康科德项目”（Project CONCORD）剩余的主要步骤涉及英国市场，公司正考虑退出一处产能利用率约为50%的设施。

马里兰州黑格斯敦配送中心在第三季度导致了发货延误和额外成本。Lifetime Brands计入了530万美元的非经常性仓库费用，用于启动运营、库存搬迁、招聘、培训以及双重租金支出。管理层表示爬坡阶段已经完成，而此前位于新泽西州罗宾斯维尔的设施预计将于年底前关闭。

公司还计入了330万美元的SKU精简费用，包括美国市场的200万美元和国际市场的130万美元，用于降价清仓并退出滞销存货。

管理层指引

Lifetime Brands上调了指引区间的下限，将2026年净销售额预期更新为6.6亿至7.0亿美元。公司维持现有的调整后营业利润和调整后EBITDA预期区间不变。

管理层预计将在第四季度追回部分（但非全部）受黑格斯敦设施影响而延误的发货。由于发货恢复程度及后续运营影响仍存在不确定性，公司维持利润指引不变。

展望2027年，管理层指出黑格斯敦启动成本的消除、新设施带来的全面运营效益、Project CONCORD的改善成果、利息支出的降低以及零售合作项目的拓展均为潜在利好因素。更详尽的规划与资本配置优先事项定于12月1日的投资者日公布。

风险与关注点

• 黑格斯敦设施运营中断对第三季度造成估计700万至1000万美元的负面影响，管理层预计无法追回所有延误的发货。
• 即使一次性启动成本结束，黑格斯敦设施的直线法租金费用以及新设备较高的折旧仍将持续存在。
• 管理层表示耐用消费品市场疲软，以金额计整体市场基本持平，但以销量计出现下滑。
• 仓储会员店渠道的项目可能存在波动，因为单品在后续时期可能不会重复采购，不过Lifetime Brands正试图通过多品牌、多品类和多价格带来对冲这一影响。
• 采购决策对关税和贸易状况依然高度敏感。由于综合成本更低，公司在2025年将部分生产转移回中国，并在墨西哥的小型业务失去经济效益后将其关闭。

分析师问答亮点

管理层表示，一旦新旧配送中心不再同时运营，2027年配送费用占出货额的比例应回落至接近过渡前的水平。

关于国际市场增长，管理层将改善归因于业务重心的转移，即从英国独立餐饮和厨具专门店转向包括Dunelm、Next和乐购（Tesco）在内的大型全国性客户。来自美国产品组合的产品（包括KitchenAid品牌产品）亦在支持欧洲、澳大利亚和新西兰的增长。

关于资本配置，再融资扩大了Lifetime Brands基于资产的循环信贷额度，以较小额度的贷款置换了原有较大额度的定期贷款，并将所有债务到期日延长至2031年。董事会随后将股票回购授权额度从此前计划剩余的约1100万美元增加至2000万美元。

业绩电话会完整纪要

完整财报电话会议逐字稿

管理层陈述

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.

分析师问答

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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