Libbey Inc.’s struggles continued in the year’s second quarter, with the company reporting a loss of more than $800,000 — its third-straight quarter in the red.
Analysts had expected less-than-stellar results as the Toledo table-glass and tableware maker continues to fight shifting trends in retail and a rough global market that has led many competitors to slash prices as they try to stay afloat. That, in turn, has hurt Libbey’s profit margins.
Even so, Libbey’s $832,000 quarterly loss, which translates to 4 cents a share, was significantly worse than the consensus estimate from analysts of a 17 cents-a-share profit. Last year, Libbey earned $8.7 million in the second quarter, or 40 cents a share. Quarterly sales were closer to expectations but still fell 5 percent from last year to $197.5 million.
“We continue to face challenging market conditions,” Libbey Chief Executive Officer Bill Foley said on a conference call with investors and analysts. “Despite these challenges, we feel we are focused on the right initiatives to improve our performance in the near term and ensure we will emerge from this difficult period as an even stronger player in the global tableware market.”
In addition to lower sales, Libbey said it was hurt by weak pricing, higher production costs tied to rebuilding glass furnaces, and slightly higher administrative costs. Some of those costs came from Libbey’s development and launch of its online sales platform, developed in an all-out blitz over the last six months.
Mr. Foley said the first orders through that system shipped out late last month, and officials hope that by making a big push with traditional and online-only retailers they can start to see higher margin sales and get new products in front of customers far sooner than they have in the past.
“We expect this to be a source of revenue growth going forward, but more importantly we expect that it will begin to blunt the decline of our retail business,” Mr. Foley said.
How much that contributes in the second half of 2017 remains to be seen; Mr. Foley told analysts he couldn’t yet give them any estimations.
Still, Libbey retains a solid market-share position, and with the e-commerce platform operational and most of the major capital investment work behind them, officials are expecting some improvement in the year’s second half.
The company’s stock sunk as much as 17 percent in trading Tuesday but recovered most of that to close at $8.63, down 4 percent.
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