Hamilton Beach Brands Holding Company (NYSE:HBB) Q3 2023 Earnings Call Transcript
Hamilton Beach Brands Holding Company (NYSE:HBB) Q3 2023 Earnings Call Transcript November 5, 2023
Operator: Good day, everyone, and welcome to the Hamilton Beach Brands Holding Company Third Quarter 2023 Earnings Conference Call and Webcast. Today's call is being recorded. And I would now like to turn the conference over to Lou Anne Nabhan, Head of Investor Relations. Please go ahead.
Lou Nabhan : Thank you, Lisa, and good morning, everyone. Welcome to our Third Quarter 2023 Earnings Conference Call and Webcast. Yesterday after the market closed, we issued our third quarter 2023 earnings release and filed our 10-Q with the SEC. Copies are available on our website. Our speakers today are Greg Trepp, President and Chief Executive Officer; and Sally Cunningham, Senior Vice President and Chief Financial Officer. Joining us for Q&A will be Scott Tidey, Senior Vice President, Global Sales. Our presentation today does include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in either the prepared remarks or during the Q&A.
A technician inspecting a commercial kitchen appliance in a factory line.
Additional information regarding these risks and uncertainties is available in our earnings release and 10-Q and our annual report on Form 10-K for the year ended December 31, 2022. The company disclaims any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all. And now I'll turn the call over to Greg.
Gregory Trepp : Thank you, Lou Anne. Good morning, everyone. Thank you for joining us. I will take the next few minutes to provide an overview of our performance for the third quarter of 2023 and discuss our expectations for the remainder of the year. Then Sally will discuss our financials in more detail. After that, we will take your questions. We were pleased with our third quarter results. As expected, revenue returned to growth and increased nearly 2% compared to last year's third quarter. Our gross profit margin expanded by 300 basis points to 26.1%. Lower average sales price was offset by lower product costs and lower distribution and warehousing costs. Operating profit increased 54% to $14.4 million compared to $9.4 million in the third quarter of 2022, reflecting the gross margin expansion and flat SG&A.
We also continued to deliver significant improvement in net working capital and free cash flow. Sally will discuss the actual results. Regarding our revenue results. In our consumer markets, overall revenue increased approximately 3% and -- by market, revenue increased in our Latin America and Mexican markets as a result of increased distribution across key retailers. Revenue decreased in our U.S. and Canadian markets as a result of softer demand in the small kitchen appliance category compared to last year. In our global commercial market, revenue decreased 11%. This decline is attributable to demand normalizing compared to the third quarter of 2022 when revenue grew nearly 36% due to strong post-pandemic demand in the food service and hospitality industries.
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