Mohawk posts strong Q1
Home & Textiles Today Staff -- Home Textiles Today, May 2, 2014
Calhoun, Ga. – With its residential business leading sales, Mohawk Industries Inc. reported strong results for its first quarter.
Net earnings in the three-month period, ended March 29, jumped 61% to $81 million, and earnings per share came in at $1.11 compared to $0.73. Excluding unusual charges, net earnings were $90 million, with EPS at $1.23, a 41% increase over last year's first quarter adjusted EPS.
Net sales hit $1.8 billion, up 22%. This year’s Q1 had one less shipping day when compared to prior year, which equates to about 1.5% of net sales, the company said.
Jeffrey S. Lorberbaum, chairman and ceo, said Mohawk Ind.’s higher-than-expected earnings for the quarter were “due to our 2013 acquisitions, improved productivity across our business and stronger results outside North America, although severe winter weather in the U.S. impacted sales.”
The carpet segment – which includes the Mohawk Home rug division – saw its adjusted operating margins rise 60 basis points to 5.1% of net sales – the result of productivity improvements, cost reductions and improved pricing. Net sales were $675 million, down 3% with one less day in the quarter. Negative impacts to this business cam from harsh weather conditions in the U.S.
Mohawk Ind.’s residential side “outperformed the other categories,” with ultra-soft products continuing to capture a greater share of the premium carpet category.
Lorberbaum added the company’s new Continuum products, made from up to 100% recycled polyester, are "gaining momentum at both the value added and promotional price points.”
The company is actively expanding the number of stores carrying its premium Karastan products, including rugs, to broaden the brand’s presence and reach, as consumers are increasingly spending on high-end Mohawk products to use in their home improvement projects, he noted.
Looking ahead, Mohawk Ind. expects 2014 to be a good year for flooring products.
Lorberbaum said that while the company is implementing product and freight increases “as required to offset inflation,” it is also planning to increase capital investments across the enterprise “to an all-time high of $500 million to support the introduction of innovative products, to sustain our growth with increased manufacturing capacity and to drive productivity, efficiency and cost improvements.”