Mohawk Net Climbs 25.1 Percent in Q1
CALHOUN, Ga.-Increased sales and productivity improvements drove Mohawk Industries to a 25.1 percent gain in first-quarter net income, to $50.5 million.
Net sales for the quarter, which ended on March 30, rose 5.5 percent to $1.5 billion. Looking at the company's units, sales for the Mohawk segment were relatively flat, with increases in carpet sales offset by reduced rug sales. Dal-Tile sales picked up 5 percent, and sales in the Unilin sector jumped 20 percent.
Mohawk's added productivity can be seen in selling, general and administrative expenses, which edged up 0.9 percent but fell 88 basis points as a percentage of sales, to 19.5 percent. Gross margin, declined 15 basis points to 25.4 percent.
Along with increased productivity, Jeffrey Lorberbaum, Mohawk's chairman and CEO, attributed the quarter's results to an improved product mix, reduced amortization and the acquisition of flooring manufacturer Pergo, which was closed in January. Lorberbaum also noted two other acquisitions which have taken place since the beginning of the second quarter--Spano, a Belgium-based board manufacturer; and Marazzi Group, which markets ceramic tile.
"For two decades, we have created significant shareholder value through a dual strategy of growing our established business while enhancing the performance of acquired companies," Lorberbaum said.
Looking ahead, the company said it would drive its results through cost and sales initiatives, including price increases and taking advantage of the recovery in the housing market. "We remain optimistic about our international businesses even while challenges persist in some regional economies," Mohawk said.