Gabriel Bruno
Thank you, Steve.
Moving to slide 5, our first quarter sales increased approximately 2.4% to $1.4 billion from a 4.9% benefit from acquisitions and 2.6% from higher prices. These increases were partially offset by 130 basis points from unfavorable foreign exchange translation and 3.8% lower volumes. Turkey had a 200-basis point unfavorable impact to net sales.
Gross profit dollars declined by approximately 1% to $365 million as a $4 million benefit from our savings actions, as well as benefits from cost management and operational initiatives were offset by the impact of lower volumes, Turkey, acquisitions, and an approximate $2 million [lico] charge in the quarter.
Our gross profit margin declined 110 basis points to 36.4% versus the prior year's record results. Acquisitions and Turkey combined had a 90-basis point unfavorable impact to gross profit margin results. Our SG&A expense decreased 1%, as $11 million of expense from acquisitions was offset by approximately $12 million of savings benefits and $6 million of favorable foreign exchange. SG&A as a percent of sales improves 60-basis points to 19.5% of sales.
For analysts closely following our EBIT schedule, we reported corporate expense of approximately $1.7 million which was substantially lower than prior year. The decline was primarily due to a lower level of accelerated stock compensation and equity awards, as well as an update to corporate allocations in mid 2024, which decreases the distribution of corporate costs to reportable segments.
This lowered corporate expense by approximately $4 million in the quarter. Looking ahead, we expect corporate expense of approximately $2 million to $3 million per quarter for the balance of the year. Reported operating income held relatively steady versus prior year. Excluding special items, adjusted operating income declined 1% to $160 million with an adjusted operating income margin of 16.9%, 60 basis points lower than prior year.
As Steve mentioned, Turkey and acquisitions had a combined unfavorable impact of 110 basis points, the margin. We reported first quarter diluted earnings per share of $2.10 or $2.16 on an adjusted basis. We incurred a $0.05 head when EPS this quarter from the combined impact of Turkey and unfavorable foreign exchange.
Moving to our reportable segments on slide 6. America's welding sales increased approximately 5% in the quarter, driven by a nearly 8% contribution from acquisitions and 2% higher prices. These increases were partially offset by 4% lower volumes and 1% unfavorable foreign exchange. Pricing reflects benefits of prior to 2024 pricing actions, which anniversaries at the end of the first quarter and new first quarter pricing implemented to address rising material costs and tariffs.
As Steve mentioned, we have also announced additional pricing in the second quarter, including surcharges to mitigate the impact of the announced tariffs. We will continue to monitor the dynamic situation and respond as trade policies evolve. First quarter volume softness reflected customers' cautious capital investment spending with automation representing just under half of the decline due to soft second half 2024 order rates, which we've previously discussed.
Consumer demand was relatively steady as order rates improved progressively through the quarter. This was most notable in our industrial distribution channel and in non-residential construction and energy. We expect acquisition contributions to narrow starting in the second quarter, reflecting the April 1 anniversary of the Red Viking acquisition.
VanAyer will then anniversary on August 1. America's welding segments first quarter adjusted EBIT decreased approximately 9% to $124 million. The adjusted EBIT margin declined 260 basis points to 18.2%, only due to the impact of lower volumes as well as an 80-basis point unfavorable impact from acquisitions and a 40-basis point impact from the higher allocation of corporate expenses.
These factors offset the benefits of cost management in our savings actions. We expect America's welding to continue to operate in their 17% to 19% EBIT margin target for the remainder of the year. Moving to slide 7, the international welding segment sales declined approximately 7%, primarily due to 6% lower volumes. Excluding the impact of Turkey, international welding volumes would have increased 3% on strong volume growth in Asia Pacific and a modest decline in the EMEA.
The overall improved demand was seen across four or five end markets, excluding heavy industries. Adjusted EBIT decreased approximately 17% to $23 million. Margin declined 120 basis points to 10.2%, which includes a 30-basis point unfavorable impact from corporate allocations and a 140-basis point compression from Turkey. We expect international welding's margin performance to improve sequentially and should be within 11% to 12% for the balance of the year.
Moving to the Harris Products group on slide 8. First quarter sales increased 9% with a 9.5% higher price and 60 basis points of higher volumes. Price increased on metal cost and volume growth reflected ongoing strength in the HVAC industry, which was partially offset by softer retail trends.
Adjusted EBIT increased approximately 22% to $24 million and margin improved 190 basis points to 17.9%. Improved profitability reflects effective cost management and strategic initiatives in the segment. We expect the Harris segment to operate in the 17% to 18% margin range for the full year 2025.
Moving to slide 9. We generated a record $186 million in cash flows from operations in the quarter, resulting in a 130% cash conversion ratio. Average operating working capital improved 100 basis points to 17.8% versus the comparable prior year period due to continued improvement in operating disciplines in the business and timing.
Moving to slide 10. We invested $27 million in CapEx, and cash returns to shareholders were strong at $150 million in the quarter, there are a higher dividend payout and approximately $107 million of share repurchases. We maintained a solid adjusted return on invested capital of 21.5%.
Moving to slide 11 to discuss our operating assumptions for 2025. We have adjusted our full year framework to incorporate US tariffs enacted through April. At this early stage in the year, we are assuming our full year 2025 organic sales will be relatively flat year over year, which is consistent with our prior position. However, we have updated the drivers.
To maintain a neutral price/cost position on enacted tariffs, we have estimated our full year consolidated price will be in the mid single digit percent range as compared with our original estimate of 50 basis points to 100 basis points. We are assuming that higher prices and the possibility of incremental tariffs in the months ahead will lead to lower volumes. We are expecting to see this starting in the second quarter.
Our framework assumes that we are able to substantially mitigate the impact of enacted tariffs and mid single digit percent lower volumes through a combination of price, supply chain, and operational initiatives in our savings actions, which is in line with our track record. This would result in a full-year adjusted operating income margin that is flat to down 50 basis points versus the prior year at a high teens percent decremental margin.
While April demand has been relatively steady sequentially, this stability may not reflect improved fundamentals nor the impact of all of our pricing actions. We also recognize that evolving trade policies and tariffs will continue to shape market conditions and uncertainty in the quarters ahead, which could prompt customers to defer capital spending and lower production levels until conditions stabilize. We will monitor trade and demand conditions as the year progresses and aggressively managed conditions as warranted.
Looking further down the income statement, we now expect a contribution of approximately $1 million in other income per quarter from a recent equity investment. While we are continuing to pursue M&A, the sluggish deal environment in our own valuation favors an elevated level of opportunistic share repurchases. We are now estimating our full year 2025 share repurchases to be in the range of $300 million to $400 million. We're maintaining our other assumptions on interest expense, tax, CapEx, and cash conversion.
And now I would like to turn the call over for questions.
Operator
(Operator Instructions)
Saree Boroditsky, Jefferies.
Saree Boroditsky
Thanks for taking the question. You talked about growth in all markets excluding heavy industries. I believe that includes price. If you just talk through what you saw from those end markets on a volume basis and then how you're thinking about that for the remainder of the year?
Gabriel Bruno
Yeah, just to give you some some clarity, Saree, while the four out of the five end markets were stronger than they had been, we do have an unclear picture as the year progresses, as you can appreciate. As we've talked in the past, construction and infrastructure while I was up mid to high single digits pretty choppy. So we've got good momentum there, but depending on where we see activity levels, we will progress and how we use that part of the market. Smaller part of our business as you know, it's about 13% of our overall sales.
Automotive general industries were positive. We're good to see that they're up mid-single digit. When you see the mix of our business in general industries, we did see strength in the consumable side of our business. And we saw that not only in the international markets but also in the US. We did have some strength on the HVAC as we've mentioned. And so while we had positive trends there again pretty difficult to assert whether or not that momentum will continue in the balance of the year and that's why our cautious position on volume activity.
An automotive, as we've mentioned, we were up mid single digit. And while we were trending favorable on the capital side, automation as well as standard equipment, consumables were down mid single digit. That reflects production activity and as you know there's some caution on where production activity goes across the automotive industry. But we'll continue to monitor that. The comps on the automation side were easier, and we're looking to see quotes to translate to orders as we've commented on how that impacts us for the second half of the year.
Lastly, I just comment on heavy industries. Heavy industries down high teens, that's the same progression that we've noted throughout the last year. That continues to be the most challenged. We are seeing some positive reports on the destocking, but we're still cautious as we progress throughout the year. And we've positioned our expectation to see softening production levels to the balance of the year.
I should comment lastly on energy. Energy was low single digits. And as we talked, we're bullish on oil and gas, but there were some tough comparisons beginning part of 2024, and we do see easier comps in the back half. So that's kind of an outlook that we would have. A lot of uncertainty as you know, it's dependent upon how the end markets progress on production levels as well as decisions on capital investment.
Steven Hedlund
So we just add that as you look at the consumable demand in the first quarter, I think the question on everybody's mind is how much of that reflects pre-buy activities by our customers end. Through both our analysis of demand trends and conversations with many of our large customers, the feedback is they're not pre-buying. There may be some opportunistic purchases here and there, but in general, our customers are very reluctant to get stuck with inventory they don't need, given the uncertainty of demand in the future. So while there may be a little bit of pre-buying in the first quarter and numbers and in the April quarter trends, we don't believe it's significant at this point in time.
Saree Boroditsky
Pre-buy was going to be my next question, so I appreciate that. I'll add one more just kind of high level. You mentioned customers deferring capital spending a couple times in the career marks, impacting automation demand. You just provide some color on what you're hearing from customers, and what they're really looking to see to start redoing some of those projects? Thank you.
Steven Hedlund
Yeah, sorry, as we commented, we continue to see a lot of quotation activities, so a lot of customers trying to figure out how they're going to respond to the shifting trade policies. And I believe long term, there will be a lot of good growth opportunity for us as a result of that. It's the near term where given the uncertainty of where the trade policies are finally going to shake out, general uncertainty over macroeconomic conditions, impact on demand and the like, the customers are just taking a little longer to make decisions than we would like to see.
Gabriel Bruno
And I would just add, Saree, when you translate a pause in the decision making on capital investment. We can see up to another quarter, and that's the rest that we see in the second half of the year. So we have been pointing to, if you recall, throughout the second half of last year of softening order trends that would impact the first half of this year. And so we're more cautious because of the pause in making capital investment decisions on what it means to our second half, and that's our -- that's why we posture our our dialogue on volumes to be offset with the pricing impacts that we've announced.
Operator
Bryan Blair, Oppenheimer.
Bryan Blair
Thank you. Good morning, everyone. I just wanted to level set on announced pricing. What -- in terms of the mid single digit incremental pricing, what is the split between direct price and surcharges? And then if you're willing to share what was price/cost in Q1 and given the moving parts and timing of those moving parts, how's your team thinking about price/cost impact in Q2 and throughout 2H to net to the roughly neutral full year level?
Gabriel Bruno
Yeah, so Bryan, on the price costs, we're essentially flattish in the first quarter. And you know that is our strategy to be price/cost neutral. We're not disclosing the split between surcharges and absolute price changes, but we're looking at that balance to be able to respond to tariffs. So you can see a mix of that being more traditional pricing that's reflective of inflationary pressures and then the surcharge to tie into some of the tariff actions.
Bryan Blair
Okay, understood. And maybe offer quick updates on Red Viking and then integration Red Viking obviously. You owned for around a year now. I'm just curious how those deals are progressing relative to plan the impact of the operating environment and just overall macro uncertainty on that progression, and then any quick comments you can offer on the deal pipeline and how this unique backdrop is affecting the development of pipeline action ability, etc? Thank you.
Gabriel Bruno
Yes, so generally, Bryan, the integration work on both Red Viking and VanAyer are doing great. We're right on schedule, deployed new systems at Red Viking. We've integrated them within our Lincoln business system. That's progressing nicely. The VanAyer strategy is also driven by growth and that, so that's also progressing right on schedule. But just keep in mind that the first three years of any integration that the results are expected to be diluted to the overall business. So it's running right on track.
The Red Viking business is a little bit more choppy because of the project level of activity. For example, the fourth quarter was pretty strong and yet first quarter while we had incremental. Sales contributions we did have some margin pressure on the red biking side of things. So we're very pleased with the progression of both businesses and they're very much on schedule. On the pipeline, you've heard our comments around a sluggish environment. We have, as you know, a very active pipeline. But we do anticipate some slowness and being able to to complete deals, and that's why we pressed on our dialogue around share repurchases as we think about capital allocation.
Operator
Angel Castillo, Morgan Stanley.
Stefan Diaz
Hello, thanks for taking my question. This is actually Stefan Diaz sitting in for Angel. I was wondering if you could just speak to your America's margin performance for the quarter. I know in the slides you mentioned, impact of lower volumes and some impact from acquisitions and then, also that corporate reallocation. But maybe if you could also just mention how quickly you expect kind of the integration of VanAyer and Red Viking. I know you just mentioned maybe some margin impact this quarter. But maybe like how quickly do you expect the integration of those two to progress to the point where it's not margin to creative?
Gabriel Bruno
Yes, so Stefan, thanks for that question. So in general, as I just mentioned, on acquisitions, we look to up to three years to get to our normalized margins for both. VanAyer and Red Viking are progressing on schedule. A little bit more choppiness from Red Viking and more accelerated growth on the VanAyer side is what we expect.
In terms of the margins for the Americas, we've talked about the impact of acquisitions being dilutive impact of basis points kind of resetting corporate allocations, decrease the EBIT margins for America to 40 basis points. But the larger driver is volumes, and by half of that, we know that it was in the automation side of our business.
So we're looking at mid to high single digit types of decline in growth in the first quarter in America's. Overall stable in automation, but the other offsets and the strengths on the international side. So we do expect our America's though to stay within our target range of 17% to 19% and you can see that's how we ended the first quarter, but those are the drivers. We need to see progression around automation orders to have more confidence that volumes will improve in the second half of the year.
Stefan Diaz
Thanks, that's really helpful. Maybe just sticking with automation, given all the uncertainty and maybe the reluctance of capital spend that you're mentioning particularly in America, are you still expecting that business to sort of hit $1 billion this year? Because I know you were expecting some organic growth from the automation business last quarter. Thanks.
Gabriel Bruno
Stefan, so I would say the core of our business, all the fundamentals are there to achieve our long-term targets, but this year I don't expect us to hit the billion based on everything that we see now. The order patterns and the trends around capital investment are going to put a lot of pressure on our automation business. But I'm pretty excited about how the business is positioned in long term. When you just take the core business and the acquisitions we've completed, on a normalized basis, we're exceeding the $1 billion objective.
Steven Hedlund
Yes, Stefan, it really comes back to the comments we made about customers delaying decision making. So given the mix of our business in terms of project life cycle, we need to be getting orders in this part of the quarter in the second quarter to have greater confidence in the third and fourth quarter of this year. And what we've seen so far gives us an indication that customers are still delaying decision making, which puts the back half at risk for us.
Operator
Steve Parker, KeyBanc Capital Markets.
Christian Zyla
Good morning, everyone. This is actually Christian Zyla on for Steve Parker.
Thank you for taking the questions. First question, on automation robotics, solid performance on a tough comp. Give your prepared remarks, has your visibility improved or changed since 4Q, especially in the auto and market? And I know it's fresh, but is there any indication that the stacked tariff relief helps your outlook or your customer's outlook on the automotive-related automation?
Gabriel Bruno
There's an issue there. Chris, are you still with us there?
Christian Zyla
Yeah, can you hear me? Do you need me to repeat the question?
Steven Hedlund
Yeah, if you just clarify that your first question. The second one is pretty easy, right? I mean, it's a very fluid dynamic environment. The administration's policy around double stacking of tariffs, I think just occurred yesterday, so it's a little bit too early to see any impact of that.
Christian Zyla
Got it, understood. And I guess the question was, has visibility changed in the automotive related automation segment just given, from 4Q to 1Q, has any visibility changed?
Gabriel Bruno
No, I think Christian, what you're referring to our longer lead time parts of our business, we would comment that the forward portion of our business, we had good activity into this first quarter. So that gives us some positive indication of some decisions on the longer 2026, 2027 program years. And that drove some of the automotive strength in the first quarter. But I think it's important for us to really monitor, as Steve mentioned, how the automotive industry then positions the response to tariffs. So we'll stay very close to that.
Christian Zyla
Got it, I understood. And then, second question, if we go back to early 2018, your American segment had solid margin expansion from tariff related price increases and surcharges, but then contracted in 2019 because of broader industrial weakness and buying declines. So the question is, if we fast forward to today, do you expect a similar playbook and do you see opportunities in America's margin longer term, given we started this time at lower volumes or are you anticipating a lower like down in volumes?
Thank you.
Gabriel Bruno
No, I think the longer-term picture for America's margins are to continue to improve, I mean that we've operated above the range. We need to see more contribution volumes from our automation business, but America's EBIT is solid. And the acquisition contributions will improve over time and as well as volume. So we're well positioned to continue to improve the EBIT profile for America's.
Operator
Mig Dobre, Baird.
Mircea Dobre
All right, thank you, good morning. I must admit I am a little bit confused with all the moving pieces here, so I just want to make sure that I understand this clearly because when you're talking about Q1, right, four out of five end markets reported growth. Then you mentioned that at least in April, what you've seen is demand was stable sequentially, yet your commentary points to uncertainty about the back half of the year.
So I'm sort of trying to understand here, is it a function of automation primarily and the backlogs sort of depletion and the push out that you're seeing there that gives you this sort of more cautious tone about the back half or is it that you're sort of saying, yeah, there's that, but there's also the maybe the consumables business that has been studied that could potentially deteriorate as customer production levels yet take another step down in the back half? So maybe we can parse this out, that'd be helpful to me at least.
Steven Hedlund
Mig, at a high level there are two things that give us concern over the second half of the year. The first and the easy one to understand is automation, right. As customers continue to delay decision making, that puts the revenue recognition in the second half of the year at risk for projects that we're hoping they will award soon, that we can start working on, recognize the revenue under 1% complete accounting. But if they don't award it, we can't start, we can't recognize the revenue, right? So that's pretty straightforward.
The core part of our business, what we're seeing so far is that as we take price in response to material inflation and tariffs, there's an offset in volume. And we're assuming for the second quarter that the price volume offset is effectively neutral as we have to take further pricing actions depending on how all the liberation day tariff announcements get resolved, there's a concern that as that price gets further elevated, there might be a more a demand-elastic response from a volume standpoint and then you've got the general uncertainty and macroeconomic conditions. You see falling consumer confidence, PMIs, etc. So it just makes us very cautious about the back half of the year based on what we can see at this particular point in time.
Mircea Dobre
Okay, that's helpful. And I think it would also be useful to talk a little bit about where your business is experiencing cost headwinds from tariffs. Is it certain countries where you're sourcing components, is it primarily in equipment, anything on the consumable side? And I ask really because as this tariff picture continues to evolve from a policy standpoint, it'd be helpful to know if certain deals are reached with certain countries or whatnot, if that would have a more immediate or direct effect on your cost structure as well?
Gabriel Bruno
So I would maybe emphasize that, yeah, we have pressure on steel, you have some components, some on accessories. We have about just less than 20% of our overall COGS that are exposed to where we believe tariff actions have an impact. You have a mix between when the sourcing from Mexico, Canada, China, EMEA, and the rest of the world. But that's what drives the visibility that we have in responding with a mid single digit, average price impact. So it's simply understanding the supply chains and the exposures of risk. And it's broad based, but there are definitely areas that we're working through with components and accessories, particularly within the supply chain to mitigate. But that's kind of how we think about it, big picture wise.
Operator
Nathan Jones, Stifel.
Adam Farley
Yeah, thanks. Good morning. This is Adam Farley on for Nathan. I wanted to clarify the price/cost discussion. Historically, you passed through, cost to customers with a margin. I know this environment is very different, but are you looking to drive margin with your price increases?
Gabriel Bruno
Adam, we're maintaining our same posture that we've had historically, and that's price/cost neutral. And we'll continue with that, posture in the markets.
Steven Hedlund
Yeah, Adam, our goal is to manage and maintain and defend the profitability of the business through a combination of pricing, productivity actions in our factories, the cost savings initiatives that we've taken, and really being aggressive on trying to find alternative sources of supply that aren't subject to tariffs or subject to lower tariffs. So it's a combination of all those effects that lead us to have an objective of trying to maintain the EBIT margin of the business to flat to down 50 basis points over the course of the year.
Adam Farley
Okay, that does make sense. That's understandable. I guess if the tariff picture does hypothetically improve from here, would you look to maybe hold on to pricing gains or again with the tariff environment, it's easy to point to what the cost increases are? Should we maybe assume maybe a lag on the way down from price increases or does all that price kind of go away?
Gabriel Bruno
And I would just assume that we're going to manage the conditions and we'll be agile and responsive to what we see, and we want to predict outcomes and and uncertainties progressively.
Operator
Walt Liptak, Seaport Research.
Hi, Mr. Walt. I think your line is on mute.
Walt Liptak
Oh, sorry about that. Morning, everyone. So I just wanted to ask about the -- we get it on the surcharging and price increases, how that could hit volumes. But I wonder if you talked a little bit more about some of the things you just mentioned about finding new local suppliers, if that's possible for, electronics, yet? Are you seeing opportunities for reshoring? And in automation, as you're talking to your customers, are they -- are some of the quotes on reshoring, especially around automation for the auto sector?
Steven Hedlund
Sure, well, we go through the categories of products that we buy that Gabe mentioned earlier, we buy a lot of steel outside the US. That's largely a function of limited supply, domestically of people that want to make welding grade products, right? So reshoring steel buying is a very long cycle activity that requires significant investment on behalf of our suppliers.
And then you look at electronics, the global electronics industry, a lot of the core components or transistors and blank circuit boards and the like has moved to China. And so while you can look at setting up operations either on or a supplier outside in other countries, you're still going to have an impact of buying the raw components from a country that's being heavily tariffed.
And then on accessories, a lot of the things like welding guns and helmets and the like are sourced out of China because it's the only cost competitive source of supply for doing that. We're working with our suppliers to look at them setting up other operations in Vietnam and other places that are less subject to tariffs, but there's some lead time in doing that as well. So both we and they are racing to try to do that. But there's going to be a period of time where we're going to need to take pricing through to cover the tariffs to protect the business, right? So we're pulling all levers simultaneously and it's really a question of trying to balance this interim period and manage through it.
Walt Liptak
Okay, great. And then just on the flip side of that, are you seeing -- is it too early still are these longer too long cycle to see automation projects that are kind of tied to reshoring or bringing automotive manufacturing back to the US?
Steven Hedlund
Well, I think a lot of the quoting activity we see is tied to that, and part of the uncertainty is people not wanting to pull the trigger on a major capital investment if there's uncertainty and fluidity around whether the trade policies are going to stick or not. So if you're looking at reshoring something in the US to get out from under a 50% tariff, and there's a risk that the 50% tariff goes away or gets reduced significantly in the next 100 days, you're probably going to sit on the sidelines and wait to see how that gets resolved, right? So there is a lot of interest in reshoring, but whether that interest will translate into actual project activity is the open question.
Operator
Chris Dankert, Loop Capital Markets.
Chris Dankert
Hey, morning guys, thanks for taking the questions. Forgive me if I missed it, but I believe you made a comment around the pricing offsetting volume for the second quarter specifically. I guess one, can you kind of walk through, what kind of went into that algebra why that's the expectation in 2Q and is that what you've seen through April to date here?
Steven Hedlund
Yeah, Chris, the algebra is pretty straightforward, that's what we've seen through the month of April. So we're -- at this point, we don't know any better to say, pricing will be an increment to volume or volume will overcome pricing. We just don't know at this point, but what we've seen through the month of April on the order intake side is they're roughly offsetting each other.
Chris Dankert
Got it. Super helpful. Thank you. And just following up, speaking to the automation portfolio, if I remember correctly, you guys do include both automation equipment and the consumables that go through that equipment, I guess. Can you remind of that split today to try and get arms around what project delays could kind of impact on that business?
Gabriel Bruno
No, Chris, we do not include consumable activity within our automation business. So that's strictly the equipment components, the robots, larger projects that are tied into our automation business.
Chris Dankert
Very helpful. Thanks so much, guys.
Gabriel Bruno
Thank you, Chris.
Operator
This concludes our question-and-answer session. I would like now to turn the call over to Gabe Bruno for closing remarks. Please go ahead.
Gabriel Bruno
I'd like to thank everyone for joining us on the call today and for your continued interest in Lincoln Electric. We look forward to discussing the progression of our strategic initiatives in the future. Thank you very much.
Operator
Ladies and gentlemen, that concludes today's call. Thank you all for joining.
