Hamilton Beach Brands (NYSE:HBB) reported higher second-quarter revenue and operating profit, with results aided by a $36.5 million refund of tariffs imposed under the International Emergency Economic Powers Act, while management said underlying operating performance also improved.
Revenue for the second quarter of 2026 rose 11.6% to $142.6 million from $127.8 million a year earlier. President and CEO Scott Tidey said the increase was primarily driven by a recovery in U.S. consumer volumes after several retailers had paused purchases in the second quarter of 2025 while reassessing inventory levels amid the tariff environment.
Tariff refund drives reported margin expansion
Senior Vice President, Chief Financial Officer and Treasurer Sally Cunningham said gross profit increased to $77.5 million from $35.1 million, and gross margin expanded to 54.3% from 27.5%.
The reported improvement was driven principally by the $36.5 million IEEPA tariff refund received during the quarter. Cunningham said approximately 260 basis points of the year-over-year margin increase also reflected sales of inventory priced in anticipation of IEEPA tariffs that were later eliminated following the Supreme Court’s February ruling.
Excluding those benefits, second-quarter gross margin was 26.1%, which Cunningham said was in line with the company’s expectations. Tidey said Hamilton Beach also benefited from inventory in its foreign trade zone that was not subject to additional tariff charges, alongside sourcing diversification and selective price increases.
Selling, general and administrative expense increased to $34.3 million from $29.2 million. The increase included higher performance-based incentive expense and $1.4 million in accelerated depreciation related to the replacement of the company’s legacy enterprise resource planning system.
Growth initiatives span consumer, commercial and health businesses
Tidey said the company remains on track to introduce two new single-serve coffee platforms in the second half of 2026. It has also gained shelf space at two wholesale membership clubs and is working with a new advertising agency to increase digital marketing activity beginning in the second half.
In premium products, Hamilton Beach launched Lotus Professional more broadly during the quarter and plans to launch Lotus Signature in the fourth quarter and early next year. The company also expanded distribution and online assortment for its CHI-branded irons and garment steamers.
Its commercial business is preparing to place the Eclipse Blender with a national coffee chain and has secured a spindle mixer placement at a U.S. fast-food company’s Central America locations. Tidey said Sunkist commercial juicers and sectionizers continue to exceed expectations. The company plans to introduce a Titan food processor in the fourth quarter, targeting what it described as a roughly $90 million global food processor market.
Hamilton Beach Health recorded its fourth consecutive quarter of profitable growth, according to Tidey, and management expects sales in that business to increase 50% this year. The platform has managed more than 1.2 million injections, and the company plans a third-quarter pilot of a pill-management platform initially aimed at dermatology and rheumatology treatments.
Outlook calls for mid-single-digit revenue growth
Management reaffirmed its expectation that 2026 revenue growth will approach the mid-single-digit range, excluding tariff refunds from forward-looking commentary.
The company now expects full-year gross margin to improve modestly from 2025, compared with its prior outlook for margins to be similar to slightly better. While tariff-free inventory supported second-quarter margins, Cunningham said the benefit would be largely offset in the second half by higher commodity costs and freight rates.
Hamilton Beach now expects operating profit to decline by a high-single-digit percentage in 2026, an improvement from its previous outlook for a low-teens percentage decline. The forecast includes an incremental $6 million in advertising spending and about $6 million of accelerated depreciation associated with its legacy ERP system.
Cash flow from operating activities less cash used for investing activities is still expected to range from $35 million to $45 million for the year. For the first six months, operating cash flow was $61.5 million, compared with cash used in operations of $23.8 million a year earlier. Inventory declined 28.2% year over year to $115.1 million as of June 30, while the company ended the quarter with net cash of $51.5 million, compared with net debt of $38.7 million a year earlier.
During the quarter, the company repurchased about 98,000 shares for $2 million and paid $1.7 million in dividends. In response to an analyst question, Cunningham said the company’s capital-allocation philosophy had not changed and that repurchases remain dependent on its outlook, cash plans, strategic initiatives and available public float.
About Hamilton Beach Brands (NYSE:HBB)
Hamilton Beach Brands Holding Company is a designer, marketer and distributor of branded small kitchen and household appliances. The company’s product portfolio spans a range of countertop and electric appliances, including blenders, mixers, toasters, coffeemakers, slow cookers, air fryers, and specialty beverage machines. Through the Hamilton Beach and Proctor-Silex brands, the company serves both everyday consumers and commercial foodservice operators.
Established in 1910, Hamilton Beach has introduced a number of innovations in small-appliance technology, from early electric drink mixers to modern immersion blenders and multi-function cookers.
