Analyst More Optimistic About Mohawk in 2010

New York, NY, Dec. 23, 2009--Flooring industry analyst Stifel Nicolaus is revising its outlook for Mohawk Industries for next year.

The company cites a slightly better than expected economic backdrop heading into the year, along with a carpet price increase in February.

The firm said that although there is little if any current evidence of improved flooring sales the fourth quarter, multiple data points on the economy improved in quarter and "leave us somewhat more optimistic about 2010."

The firm said it anticipates revenues for 2010 to be up less than 1% versus a 2% decline (this revenue comparison includes the 1Q 2009 charge to earnings and revenues of $110 million).

The extension of the first time home buyer credit into 2010, artificially low mortgage rates, and flattening employment trends "are central to our mildly more optimistic revenue forecast."

However, Stifel said the commercial side of Mohawk's business (approximately 25% of the mix) will continue to weaken going into 2010 and residential market improvement may be back end loaded in the year.

Stifel noted that Shaw, Mohawk and Beaulieu have all announced carpet price increases that will begin to be implemented in late January/early February.

"We would not expect the mills to get much more than a 2%-3% increase if that, but any increase is welcome given rising feedstock costs."

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