Dorel reports rise in net income, 4.1% drop in Q2 sales
August 7, 2017,
MONTREAL – Case goods resource Dorel Inds. reported that second quarter sales totaled $611.3 million, down 4.1% from $637.3 million in the same period last year. Meanwhile reported net income totaled $11.4 million, compared to a reported net loss of $38.6 million last year.
For the six-month period, revenue fell 2% to $1.26 billion, from $1.28 billion last year, while reported net income totaled $20.3 million, compared with a reported net loss of $21.9 million for the first half of 2016.
He added that “disciplined cost management and better gross margins at Dorel Sports offset lower revenues, resulting in the fourth consecutive quarter of year-over-year earnings improvement. In Juvenile, we had a quarter that was below our expectations. We corrected many of our first quarter manufacturing issues in China in the past 60 days, and our production levels have increased significantly. This did lead to higher costs, but as we enter the second half of the year, Dorel Juvenile is poised for a strong rebound from its second quarter. This will come from a robust product introduction execution across all of our operating businesses and with our most important retail customers; as well as additional factory improvements taking effect.”
Within the Dorel Home adult residential furniture division, second quarter revenue rose to $184.2 million, from $171.9 million during last year’s second quarter, a 7.1% increase. During the first six months, revenues totaled $388.2 million, up 8% from $359.3 million in the first half of 2016.
The company attributed this to increased sales to online retailers. Online sales in the first quarter and first half represented 52% and 49% of total segment sales, respectively, compared with 43% and 42% for the comparable periods last year. This represented the highest percentage of online sales in Dorel’s history and also exceeded reductions in sales to brick and mortar stores, the company said.
The company’s second quarter operating profit in the Home division rose to $16.7 million, from $14.8 million a year ago, which resulted from higher sales volumes and offset by increased selling, general and administrative expenses. For the first half, operating profit rose to $36.5 million, from $32.4 million in the first half of 2016.
In the Dorel Juvenile division, second quarter revenue dropped to $218.1 million, from $229 million last year, a 4.7% decrease. The decreases in sales to brick-and-mortar accounts were partially offset by increases in e-commerce sales, the company said. For the six-month period, revenue in the Juvenile division fell to $446.7 million, from $470.8 million last year, a 5.1% decrease.
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