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SEC filingLifetime Brands, Inc. reported a net loss of $26.9 million for FY 2025, compared to a net loss of $15.2 million in FY 2024, representing a significant deterioration in profitability. Net sales declined 5.1% year-over-year to $647.9 million, driven by lower sales volume as price increases softened consumer demand, partially offset by higher selling prices implemented in response to tariffs. The company recorded a $33.2 million non-cash goodwill impairment charge in its U.S. reporting unit due to revised downward forecasts impacted by changes in U.S. tariff policies and retailer buying patterns. Despite the net loss, the company generated $7.6 million in net cash from operating activities and maintained a current ratio of 2.8 to 1.0. The forward-looking outlook is challenged by ongoing tariff uncertainties, margin pressure from higher-cost inventory, and the financial impact of relocating its East Coast distribution facility.
Lifetime Brands reported challenging financial results for FY 2025, with net sales declining 5.1% to $647.9 million from $683.0 million in FY 2024. The company recorded a net loss of $26.9 million, significantly worse than the $15.2 million net loss in the prior year. Key factors included a $33.2 million non-cash goodwill impairment charge in the U.S. reporting unit, lower sales volumes due to tariff-related price increases softening consumer demand, and gross margin compression from higher tariffs and product costs. Despite the net loss, the company generated $7.6 million in net cash from operating activities, down from $18.6 million in the prior year. The current ratio improved to 2.8 to 1.0 from 2.5 to 1.0, with working capital of $242.6 million.
Revenue declined across both reportable segments. The U.S. segment, representing 91% of total sales, decreased 5.7% to $591.2 million. Within the U.S. segment, Kitchenware sales declined 2.4% to $374.9 million, Tableware declined 8.0% to $122.2 million, and Home Solutions declined 14.5% to $94.1 million. The International segment increased 1.6% to $56.7 million, but in constant currency (excluding foreign exchange effects), sales decreased 1.7%. Customer concentration remained significant, with Walmart accounting for 17% of consolidated net sales, Amazon for 12%, Costco for 11%, and TJX for 11% during FY 2025. The company's business remains highly seasonal, with 58% of annual net sales occurring in the third and fourth quarters.
Gross margin declined to 37.1% from 38.2% in the prior year, representing a 100 basis point contraction. The U.S. segment gross margin decreased to 37.3% from 38.3%, primarily due to higher tariffs and product costs that more than offset the benefit of higher selling prices. The International segment gross margin decreased to 35.1% from 36.6%, driven by a higher mix of sales incentives and customer allowances. Operating loss was $9.4 million compared to operating income of $27.3 million in the prior year, with the $33.2 million goodwill impairment charge being the primary driver. Excluding this impairment, operating income would have been $23.8 million. Interest expense decreased to $20.0 million from $22.2 million due to lower average outstanding borrowings and lower interest rates.
Net cash provided by operating activities was $7.6 million, down from $18.6 million in the prior year, primarily due to timing of payments for accounts payable and accrued expenses, partially offset by lower investment in inventory and a net legal settlement gain. Free cash flow (operating cash flow minus capital expenditures) was $3.3 million. The company had $4.3 million in cash and cash equivalents at year-end. Total consolidated debt was $189.1 million, consisting of $54.1 million under the ABL Agreement and $135.0 million under the Term Loan. The Term Loan requires quarterly principal payments of $1.875 million and matures on August 26, 2027. The company was in compliance with all debt covenants, including the maximum Total Net Leverage Ratio of 5.00 to 1.00.
The company faces significant headwinds from ongoing tariff uncertainties, with new U.S. tariffs imposed in 2025 increasing costs. Management expects continued margin pressure through the first half of 2026 as higher-cost inventory is sold through. The company is relocating its East Coast distribution facility from Robbinsville, NJ to Hagerstown, MD, with expected costs of approximately $9.3 million in capital expenditures, $7.0 million in exit costs, and $7.0 million in start-up costs, all expected to be incurred in 2026. Project Concord, a plan to streamline International operations, resulted in $0.3 million in restructuring expenses in 2025 with approximately $0.7 million expected in 2026. Key risk factors include dependence on international suppliers (primarily China), customer concentration with four customers representing 51% of sales, intense competition, and the highly seasonal nature of the business impacting borrowing needs.