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Biznes i finanse
Mohawk Industries Reports Q1 Results
- zp20
- fundacja, internauci, Lubię, Nauka, naukowiec, PKP Intercity, plebiscyt, projekt, superbohater, Szlak Akademii Superbohaterów
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Fundacja Nauka. To Lubię we współpracy z PKP Intercity ogłasza inicjatywę “Szlak Akademii Superbohaterów”. Pierwszym krokiem jest przeprowadzenie plebiscytu na superbohatera, w którym głosy internautów wybiorą wizerunek polskiego naukowca, który zostanie umieszczony na jednej z lokomotyw PKP Intercity.
Mohawk Industries, Inc. (NYSE: MHK) reported first quarter 2024 net earnings of $105 million and earnings per share of $1.64. Adjusted net earnings were $119 million, and adjusted EPS was $1.86. Net sales for the first quarter of 2024 were $2.7 billion, showing a decrease of 4.5% as reported and 5.5% on a legacy and constant basis versus the prior year. In comparison, the Company reported net sales of $2.8 billion, net earnings of $80 million and EPS of $1.26 during the first quarter of 2023; adjusted net earnings were $112 million, and adjusted EPS was $1.75.
In his comments on the Company’s first quarter results, Chairman and CEO Jeff Lorberbaum acknowledged the challenges posed by economic headwinds on industry sales, margins, and mix. However, he also highlighted the positive impact of the actions taken to improve performance, noting that earnings per share increased year over year due to restructuring, productivity initiatives, and cost-saving measures related to raw materials and energy. These gains were partially offset by weaker pricing and mix.
Market conditions across our regions have remained consistent with the previous quarter, characterized by substantial pricing and mix pressure as a result of industry competition for volume. While the commercial channel has shown signs of slowing, it continues to outperform the residential sector. Residential remodeling activity remains subdued due to low housing sales and the impact of inflation on discretionary spending. Retailers have noted that consumers are hesitant to undertake larger projects, with the flooring sector experiencing particular pressure as most replacements can be easily postponed.
Our teams are staying committed to navigating the current environment, seizing sales opportunities, cutting controllable costs, and finalizing restructuring efforts. We are also adjusting our production levels to match market demand and investing in new product launches with improved features and merchandising to highlight the value of our collections. In response to inflationary pressures, we are taking further steps to lower our costs and enhance productivity.
In the first quarter, the Global Ceramic Segment experienced a 1.4% decrease in net sales compared to the previous year. The operating margin for the segment was 4.7%, impacted by price and product mix, foreign exchange headwinds, and weather-related disruptions in the U.S. Despite these challenges, our investments in new technologies are delivering higher value styles and formats. We are also introducing decorative innovations to enhance our product offerings. In the U.S., weather disruptions impacted our operations, and the industry has taken action against India for dumping ceramic tiles in the market. In Europe, we have seen strong growth in porcelain panel sales and our premium products have performed well. In Mexico and Brazil, we are focused on optimizing sales and improving operations, implementing new distribution and product strategies to strengthen our presence in the marketplace.During the first quarter, our Flooring Rest of the World Segment saw a 7.4% decrease in net sales as reported, or 5.9% on a constant basis, compared to the previous year. The Segment’s operating margin was 9.7% as reported, or 10.1% on an adjusted basis, due to the unfavorable impact of price and product mix, partially offset by lower input costs, less restructuring, higher sales volume, and productivity gains. Despite declining inflation, our markets remained soft. However, our volumes increased from the previous year’s low levels during the quarter, which may indicate improving trends in our categories. Our results were affected by pricing pressures as we passed through lower input costs in highly competitive markets. The restructuring of our residential LVT program has been completed, resulting in substantial growth in sales of our rigid LVT, which is replacing our discontinued flexible products. In insulation, we are raising our prices in response to recent material increases. Margins in our panels business have declined from cyclically high comparisons due to underutilization of industry capacity, partially offset by mix improvement in our decorative collections. We have announced selective price increases in panels to reflect rising material costs.
During the first quarter, our Flooring North America Segment experienced a 5.6% decline in sales compared to the previous year. The Segment reported an operating margin of 5.0%, which adjusted to 5.3% due to lower input costs and increased productivity. However, this was partially offset by the negative impact of price and product mix. Despite temporary closures in January due to weather, sales showed improvement throughout the quarter. The optimism of builders and an expected increase in new single-family home sales bode well for our flooring business. Commercial sales, particularly in the hospitality, retail, and government channels, continue to outperform residential sales. Our new residential product launches, such as PetPremier carpet and our award-winning PureTech resilient planks, have been well-received by retailers. We are also seeing growth in our non-woven business with new customers and product expansions. Additionally, our West Coast LVT facility is ramping up production, and our Georgia LVT restructuring initiatives are underway.
The flooring industry seems to be at the lowest point of the cycle, and we are taking steps to improve our business results by managing the aspects we can control. We are continuously reducing costs through restructuring and productivity initiatives. Our production is in line with market demand to manage working capital and reduce unabsorbed overhead. To increase sales and margins, we are enhancing our product offering with unique features and investing in new merchandising. Our focus this year is on completing our LVT, quartz countertop, and premium laminate expansion projects to support products with the highest growth potential when the market bounces back. Our other capital investments are aimed at reducing costs, driving product innovation, or maintaining the business. Due to European vacation schedules, our second quarter sales are seasonally higher than the third quarter. Taking these factors into account, we expect our second quarter adjusted EPS to be between $2.68 and $2.78, excluding any restructuring or other one-time charges.
As consumer confidence improves and the housing market strengthens, residential flooring sales are expected to lead the recovery. With postponed remodeling projects being initiated and existing home sales normalizing, homeowners are likely to replace flooring before listing a property or soon after completing a purchase. Across our geographies, there is a significant need for home construction to keep pace with household formations. Additionally, as homes age, increased remodeling investments are necessary to maintain property values. As the world’s largest flooring manufacturer, we anticipate benefiting from our brand leadership, investments in new capabilities and recent acquisitions as the flooring market recovers. We have the products to inspire consumers, the infrastructure to deliver superior service, and the balance sheet strength to invest in business opportunities.
ABOUT MOHAWK INDUSTRIES
Mohawk Industries is a global leader in the manufacturing of flooring products for both residential and commercial spaces. With a focus on innovation, we produce a wide range of products including carpet, rugs, ceramic tile, laminate, wood, stone, and vinyl flooring. Our brands, such as American Olean, Daltile, and Karastan, are well-known and trusted in the industry. Over the past twenty years, Mohawk has expanded its operations from a US-based carpet manufacturer to the world’s largest flooring company, with a presence in multiple countries around the world.
Some of the statements in the preceding paragraphs, especially those relating to future performance, business prospects, growth, and operating strategies, as well as those containing words such as “could,” “should,” “believes,” “anticipates,” “expects,” and “estimates,” or similar expressions, are considered “forward-looking statements.” Mohawk asserts the protection of the safe harbor for forward-looking statements as set forth in the Private Securities Litigation Reform Act of 1995 for these statements. The accuracy of these forward-looking statements cannot be guaranteed, as they are based on numerous assumptions involving risks and uncertainties. Various important factors could lead to differing future results, including changes in economic or industry conditions, competition, inflation and deflation of freight and raw material prices, currency fluctuations, energy costs and supply, timing and level of capital expenditures, implementation of price increases, acquisition and integration, international operations, introduction of new products, rationalization of operations, taxes, litigation, geopolitical conflict, regulatory changes, and other risks outlined in Mohawk’s SEC reports and public announcements.
Join us for a conference call on Friday, April 26, 2024, at 11:00 AM Eastern Time. You can participate in the call via the Internet by visiting http://ir.mohawkind.com/events/event-details/mohawk-industries-inc-1st-quarter-2024-earnings-call. If you prefer to join via telephone, please register in advance at https://dpregister.com/sreg/10188065/fc2a593c61 to receive a unique personal identification number. On the day of the call, you can also dial 1-833-630-1962 (U.S./Canada) or 1-412-317-1843 (international) for operator assistance. A replay of the call will be available until May 24, 2024, by dialing 1-877-344-7529 (U.S./Canada) or 1-412-317-0088 (international) and entering access code #5217402.
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As required by the Securities and Exchange Commission rules, the Company provides non-GAAP financial measures in addition to its condensed consolidated financial statements prepared in accordance with US GAAP. The tables above include a reconciliation of the Company’s non-GAAP financial measures to the most directly comparable US GAAP measure. These non-GAAP measures should be considered alongside the comparable US GAAP measure, and may not be comparable to measures reported by other companies. The Company believes that these non-GAAP measures, when reconciled to the corresponding US GAAP measure, provide valuable information to investors, including identifying growth trends and comparing revenue with prior and future periods, as well as understanding long-term profitability trends and comparing profits with prior and future periods.
To provide a clearer picture of underlying business trends, the Company’s non-GAAP revenue measures exclude certain items that can fluctuate significantly between periods. These items include foreign currency transactions and translation, variations in shipping days, and the impact of acquisitions.
For its non-GAAP profitability measures, the Company excludes specific items that may not accurately reflect or are unrelated to its core operating performance. These excluded items encompass restructuring, acquisition and integration-related costs, legal settlements, reserves and fees, impairment of goodwill and indefinite-lived intangibles, acquisition purchase accounting, adjustments of indemnification asset, adjustments of uncertain tax position, and European tax restructuring.
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