Quarterly sales up 3.6% in Dorel's home furnishings segment
May 10, 2013,
MONTREAL — While overall revenues were down 4.3% for consumer goods giant Dorel Inds. In the first quarter, its home furnishings segment enjoyed a 3.6% sales gain thanks to its strong performance with e-commerce retailers.
For the quarter, Dorel reported total revenue of $594.2 million and net income of $22.3 million or 70 cents per share, compared with $29.1 million or 90 cents per share in the first quarter of 2012 - a 22.2% decline on a per share basis. The company reports its earnings in U.S. dollars.
In a note to shareholders, Dorel President and CEO officer Martin Schwartz said senior management expected 2013 to get off to a slower start than 2012.
The company's recreational/leisure segment - which manufactures bicycles and sporting apparel - was plagued by poor weather in North America and Europe while its juvenile segment - which specializes in car seats and other products - was challenged by poor consumer confidence in its mature markets.
A bright spot was home furnishings, which includes ready-to-assemble producer Ameriwood as well as Cosco Home & Office, Altra Furniture and Dorel Asia, among others. The segment had first quarter sales of $135.4 million, a 3.6% gain over last year's $130.7 million. Operating profit jumped 37.2% to $7.9 million from $5.8 million.
"Home furnishings had one of its best quarters since 2011 as the continued growth in online sales helped deliver a substantial increase in earnings," Schwartz said. "We are a leader in this retail channel in furniture and the results are apparent in the quarter's results."
Also contributing to the segment's growth was its imported upholstery and bedding as well as its folding furniture business.
"Over the course of the past several years, the segment has been focused on servicing the Internet retail sales channel and putting into place both the technology and the infrastructure to outperform its competition," Schwartz said. "Consumer trends in furniture shopping clearly indicate that the Internet is an important channel and home deliveries are becoming an expected part of the shopping experience. Beyond pure Internet retailers, traditional brick-and-mortar chains are capitalizing on this trend and are looking to Dorel to service its online shoppers."
Schwartz said Dorel's management is looking for significant improvements in results this year.
"In home furnishings, we have had a good start to the year and continue to benefit from our solid retail relationships," he said.
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