Dorel's home furnishings sales down 2.7% in third quarter
Michael J. Knell -- Furniture Today, November 9, 2012
MONTREAL — Consumer goods giant Dorel Inds. reported a healthy 6.5% in revenue for the third quarter although net income fell 9.9% on a per share basis. Leading the charge were the company's juvenile and leisure segments, while home furnishings reported a 2.7% sales decline in its ready-to-assemble furniture business.
Revenue of $613.3 million for the period was up 6.5% from the comparable period last year. Net income was $20 million or 64 cents per share, down from $23.1 million or 71 cents per share for the 2011 period.
Dorel reports its financial results in U.S. dollars.
"Our core businesses are moving in the right direction despite a difficult economy," Martin Schwartz, president and CEO, said in a statement.
"Home furnishings sales were down slightly due to a reduction in ready-to-assemble furniture sales, partly offset by increases in futons and upholstered furniture. The segment's Internet sales maintained their steady growth trend," he added.
Third-quarter revenues for the home furnishings segment fell 2.7% to $135.2 million, while operating profit declined 13.9% to $5.8 million. For the first nine months, revenue was down 2.4% to $392.9 million while operating profit dropped 11.9% to $18.3 million. Gross margins were stable at about 11% for the quarter and 12% for the year-to-date.
"While benefiting from a stable cost environment, offsetting this was a less profitable sales mix," the company said. "Internet sales for the segment continued their upward progression, maintaining the positive trend established over the past several quarters."
Dorel's home furnishings segment includes RTA specialist Ameriwood, Cosco Home & Office, Altra Furniture, Dorel Asia and Dorel Home Products.
Looking to balance of the year, Schwartz said Dorel's management expects to see continued revenue and earnings growth in its juvenile and recreational segments.
"Partially offsetting these gains will be lower operating profit in home furnishings as that segment continues to face a challenging retail environment," he said, adding, "While the other two segments face a similar environment, they are well positioned in their various markets to meet these challenges and it is anticipated these segments will better last year's results."
Assuming no significant fluctuations in exchange rates, Schwartz said, "We are confident that the fourth quarter operating profit of our three segments will exceed last year."
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line