Mohawk segment drives Q3 gains for parent company
Home & Textiles Today Staff -- Home Textiles Today, November 2, 2012
Calhoun, Ga. - Thanks to sales strength in carpet products, some recovery in the rug sales, and overall improvements in pricing and product mix on soft flooring side of its business, Mohawk Industries Inc. posted strong earnings gains for its third quarter.
Net earnings jumped 48.5% to $70 million from $46.6 million a year ago, and diluted earnings per share came in at $1.01 compared to $0.68. Excluding restructuring charges, net earnings were $72 million and EPS was $1.04, a 25% increase over last year's third quarter adjusted EPS.
More modest in growth were quarterly net sales, which grew 2% to $1.5 billion versus $1.4 billion last year.
Year to date, net earnings came in at $131 million, with EPS at $1.90, and net sales grew 2.2% to $4.4 billion compared to $4.3 billion.
Jeffrey Lorberbaum, chairman and ceo, said the Mohawk segment's strong financial position "provides us with the flexibility to pursue strategic opportunities such as the recently announced agreement to acquire Pergo," which is a brand of premium laminate flooring in the U.S. and Europe.
The Mohawk segment increased its adjusted operating income margin 180 basis points with sales remaining flat compared to 2011. The gains stemmed from improved pricing and product mix, reduced manufacturing and distribution costs and increased productivity.
"Our carpet sales performance was stronger in our specialty and contractor channels but was offset by the timing of product transitions in the home center channel," Lorberbaum said. "Our rug sales improved over the prior period, though they still remained below last year as retailers adjusted their strategies with consumer spending. We saw continued improvement in mix and expanded our SmartStrand Silk collection, which has redefined the premium carpet market. We enhanced productivity through improved manufacturing and distribution efficiencies and gains from our capital investments."
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