Mohawk reports strong Q1, but rug sales soft
May 4, 2012,
Calhoun, Ga. - Thanks to increases in both volume and price and reductions in costs, Mohawk Industries Inc. significantly grew its first quarter net earnings, taking them up by 38% to $40 million, or 58 cents per share.
Sales rose 5% to $1.4 billion.
"Higher carpet sales in the segment were offset by lower rug sales from deferred customer promotions, inventory reductions in the channel and lower product mix," said Jeffrey Lorberbaum, chairman and ceo.
And on the commercial side, Lorberbaum continued, "our hospitality and core business improved, but we experienced weakness in our premium products."
He noted that last month Standard & Poor's upgraded of the company's credit rating and Moody's elevated Mohawk's outlook to positive, reducing the interest rate on its notes.
"Our balance sheet remains strong with net debt to adjusted EBITDA at 2.2 times and approximately $500 million available for strategic opportunities, after the payment of the 2012 notes," he added.
In the second quarter, Mohawk anticipates "continued sales growth and improving margins as selling prices align with material inflation," Lorberbaum said.
Mohawk's guidance for second quarter is EPS of $1.07 to $1.16, excluding restructuring costs.
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