Mohawk Net Jumps 20 Percent in Second Quarter
CALHOUN, Ga.-Reduced costs elevated Mohawk Industries to a second-quarter net income gain of 20.2 percent, to $73.2 million.
Net sales in the quarter, which ended on June 30, slipped 0.5 percent to $1.5 billion. Sales in Mohawk's carpet segment were about flat with last year's second quarter, with residential remodeling in the midst of a slowdown and retail sales on the decline.
However, gross margin rose 56 basis points to 26.4 percent. Jeffrey Lorberbaum, Mohawk's chairman and CEO, explained that the company's product selling prices helped offset increases in raw-materials costs, and that Mohawk has benefited from gains in productivity, improved product mix and lower interest costs.
Selling, general and administrative expenses were flat with the second quarter of last year on a dollar basis. With the slight sales decline, SG&A as a percentage of sales edged up 12 basis points to 19.1 percent.
Lorberbaum said, "We have addressed many of today's economic challenges by enhancing our product differentiation, reducing costs, improving efficiencies and entering new product categories and geographies."