Dorel's home furnishings sales decline 5.1% in 1Q
Michael J. Knell -- Furniture Today, May 30, 2012
MONTREAL — First-quarter home furnishing segment sales for Dorel Inds. fell on a year-over-year basis, which combined with its sagging juvenile segment, hampered profitability for the consumer goods giant.
However, its recreation and leisure segment - best known for bicycles and sporting apparel - continued to strengthen, contributing double-digit growth in both sales and operating profit.
Dorel, which reports in U.S. dollars, said it had total revenue of $621.1 million, a 2.2% gain from the same period a year ago. Net income was $29.2 million or 91 cents per share, compared with last year's $31.2 million or 94 cents per share - a decline of 6.4% overall or 3.2% on a per share basis.
The home furnishings unit - which includes ready-to-assemble specialist Ameriwood as well as Cosco Home & Office, Dorel Asia and Altra Furniture - had first quarter revenue of $130.7 million, a decline of 5.1% from the comparable 2011 period. Operating profit fell 25.3% to $5.8 million.
Dorel President and CEO Martin Schwartz said in a statement that "product mix dampened margins" in home furnishings in the first quarter. But he added, "The growing importance of the Internet retail distribution channel for home furnishings has continued into 2012 and still offers even more opportunity for us."
The company attributed home furnishings' first quarter revenue decrease mainly to reductions in sales of imported RTA and folding furniture. It added that the 2011 quarter benefited from strong shipments of initial customer rollouts, which did not recur in 2012.
Dorel's recreational and leisure segment continued to be the company's star performer as revenue climbed 10.2% to $221 million while operating profit rose 20.3%. The company noted it was the segment's "best quarter ever on the back of a strong 2011."
Meanwhile the juvenile segment - a producer of a wide range of baby and youth products including car seats and baby monitors - had revenue of $226.5 million in the quarter, essentially unchanged from last year while operating profit fell 12.7%.
"The home furnishings segment experienced a challenging second quarter in 2011 and we are expecting this year's second quarter to be better than last year," Schwartz said, adding, "The segment is expecting continued growth in the already strong Internet retail channel."