Profits explode as Mohawk soars

Joan Gunin, Don Hogsett, April 26, 2004

Calhoun, Ga. — With sales soaring by more than a fourth, and at the same time building margins and cutting costs, Mohawk Industries Inc. drove first quarter profits up a heady 59.2 percent, to $431.6 million from $66.3 million last year.

Racing along a fast track, and helped by a booming flooring industry and its Lees Carpet acquisition, Mohawk drove sales in the opening quarter up 28.3 percent, to $1.4 billion from $1.1 billion last year, layering on $306.5 million in new sales during the period.

In addition to its core business in floor coverings, Mohawk is the nation's third-largest home fashions supplier through its Mohawk Home division, with $655 million in 2003 sales.

Tweaking an already strong operation, Mohawk widened its margins 30 basis points, or three-tenths of a percentage point, to 25.6 percent from 25.3 percent. Continuing to hack away at costs, the diversified floor coverings and home fashions producer reduced expense 110 basis points, or 1.1 percentage points, to 17 percent of sales from 18.1 percent a year ago.

Helped by the winning trifecta of stronger sales, wider margins and lower costs; operating profits increased more than half, rising 52.2 percent, to $119 million from $78.2 million, despite higher raw material costs.

Keeping stockpiles strictly controlled, Mohawk inventories rose sharply behind the rate of sales growth. Inventories increased 17.8 percent, to $897.5 million from $761.6 million, substantially beneath the 28.3 percent boost in sales.

Interest rates edged up modestly, rising 6.4 percent, to $14 million from $13.1 million during the same period a year ago.

"All of our business turned in outstanding results this quarter with each product category experiencing organic revenue growth as well as increased operating earnings," said Jeffrey Lorberbaum, president and CEO.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Current issue for September 2017

See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more... See details!