Mohawk Boosts First-Quarter Net 14 Percent
21428 Fri, 05/06/2011 - 10:56am
CALHOUN, Ga.—Strong cost controls elevated Mohawk Industries to a 14 percent gain in net income in its first quarter, to $23.4 million.
The floor-covering manufacturer accomplished this in spite of a flat performance in net sales, which totaled $1.3 billion in the quarter, which ended on April 2. Jeffrey Lorberbaum, Mohawk’s chairman and CEO, credited the company for “continuing to drive cost reductions, manufacturing improvements and efficiency gains throughout the enterprise.”
As a result of these efforts, selling, general and administrative expenses were down 0.7 percent in dollars, and 10 basis points as a percentage of sales to 21.2 percent. Also, gross margin picked up 10 basis points to finish the quarter at 25.4 percent. In another key metric, Mohawk further bolstered its bottom line by slimming its interest expense by 22 percent.
Lagging sales to Mohawk’s residential customer segment offset a positive performance in the commercial sector. However, Lorberbaum said residential sales began to turn around toward the end of the first quarter, and that the momentum continued in April. In addition, the hospitality channel has begun to rebound after years of reduced capital spending, and the commercial segment should continue its upward progress through the rest of the year.