Mohawk Q2 Net Jumps 80.6 Percent
CALHOUN, Ga.-Improvements in productivity and cost controls teamed with a tick-up in sales to boost Mohawk Industries' second-quarter net income by 80.6 percent, to $152.8 million.
Jeffrey Lorberbaum, Mohawk's chairman and CEO, cited the gains in productivity, the slimming of costs and successful product launches for the company's burgeoning bottom line in the quarter, which ended on June 28. Selling, general and administrative expenses dropped 7.4 percent in dollars and 206 basis points as a percentage of sales, to 17.2 percent. "We reduced SG&A compared to last year across the enterprise, even as we reinvested into the business to promote new product collections and enhance our sales strategies," Lorberbaum said.
Net sales rose 3.6 percent to $2 billion, a growth rate that was less than anticipated due to slower gains in U.S. housing and remodeling, Lorberbaum said. Leading the way as far as Mohawk's business segments was laminate and wood, whose sales picked up 6 percent, followed by the ceramic segment with a 5 percent increase. Carpet sales edged up 1 percent.
Further helping the bottom line, gross margin rose by 205 basis points to 28.1 percent.
Mohawk said it anticipates stronger sales for the second half of the year, with help coming from continued U.S. job creation and higher economic growth. "We remain committed to enhancing Mohawk's results, and we are optimistic about the improvement of the floor-covering industry and our participation in it," the company said.