Why did LCUT's Q4 2024 earnings surprise analysts?

Lifetime Brands Inc. (LCUT) experienced a net income of $8.92 million in Q4 2024, with an EPS surprise of $0.1, compared to the latest report period ending on December 31, 2024. This positive surprise can be attributed to several key factors:

|code|Ticker|Name|Date|Net Income|market_code|
|---|---|---|---|---|---|
|LCUT|LCUT.O|Lifetime Brands|2024 Q1|-6260000|185|
|LCUT|LCUT.O|Lifetime Brands|2024 Q2|-1.8167E7|185|
|LCUT|LCUT.O|Lifetime Brands|2024 Q3|344000|185|
|LCUT|LCUT.O|Lifetime Brands|2024 Q4|8918000|185|

1. **Increase in Sales**: LCUT reported a 6% increase in net sales for Q4 2024, reaching $215 million compared to $203 million in the same period last year. This growth was driven by strong seasonal consumer demand in December and continued execution of its online sales strategy. The company's U.S. sales grew by $10.8 million, or 5.8%, while international sales increased by $0.8 million, or 4.4% in constant currency. The successful execution of its online sales strategy and new product introductions, such as the Build·a·Board and the Dolly Parton program, contributed to the sales growth.
2. **Improved Gross Margins**: LCUT's gross margin expanded to 37.7% in Q4 2024, up from 36.4% in the same period last year. This indicates effective cost management and a favorable product mix, which contributed to the improved profitability.
3. **Strategic Initiatives**: The company's strategic initiatives, such as the launch of Project Concord aimed at promoting growth and streamlining the cost structure of its international operations, have shown positive results. The relocation of its east coast distribution facility from Robbinsville, NJ, to Hagerstown, MD, is expected to be operational by the second quarter of 2026 and is anticipated to incur one-time exit costs of up to $7 million and capital expenditures of approximately $10 million.

In conclusion, LCUT's Q4 2024 earnings surprise can be attributed to a combination of increased sales, improved gross margins, and strategic initiatives. These factors collectively contributed to the company's strong financial performance in the quarter.