Mohawk Industries Reports Q3 Results Below Expectations
Mohawk Industries announced its third-quarter results, which were in line with expectations but deemed unsatisfactory by the company. Sales saw a slight decrease, and profitability was impacted.
Calhoun, Georgia – Flooring manufacturer Mohawk Industries (NYSE: MHK) announced its third-quarter results on October 24, 2019, which fell in line with expectations but did not satisfy the company.
Net sales for the third quarter decreased by 1.0% to $2.5 billion compared to the prior year. Adjusted net earnings were $199 million, or $2.75 per share. Chairman and CEO Jeffrey S. Lorberbaum stated that the company's U.S. businesses faced the greatest challenges due to soft retail demand, the impact of LVT (luxury vinyl tile), a stronger dollar, and excess ceramic industry inventories.
"We expect the present conditions to persist and will further adjust our strategies as needed," Lorberbaum said. The company is progressing on initiatives to improve its business, including aligning U.S. ceramic production with demand and realigning its North American carpet operations.
Mohawk Industries' Global Ceramic Segment sales increased by 3.5%, but its operating margin declined due to inflation and lower production rates. In Europe, lower demand impacted pricing and compressed margins. The Flooring North America Segment saw a 4% decrease in sales.
The company also reported strong free cash flow and a solid balance sheet. It continues to invest in sales personnel and marketing to increase market penetration for new and existing products.