Dixie Group Q3 Sales Down 10% YOY, Income Up
Dalton, GA, November 5, 2020-The Dixie Group reported Q3 2020 net sales of $85.9 million, a 10% decline compared to Q3 2019’s $95.4 million, though sales of residential products were up 3%.
For Q3 2020, net income was $860,000, compared to a loss of $2.6 million in Q3 2019.
In Q3, sales of residential products were up 3% for the quarter, while the industry, it believes, was up closer to 1.5%. Benefiting from strong trends in new home construction and existing home sales, the residential segment saw business conditions continue to improve through the quarter, as many flooring retailers emerged from the COVID-19 downturn, and an increasing number of consumers began home improvement projects.
The Dixie Group’s specialty retail soft surface business was positive for the third quarter. Despite lower total quarter sales in its mass merchant segment, it showed favorable comparatives to the prior year by the end of the quarter.
Its residential hard surfaces segment continued performing exceptionally well in Q3, growing significantly in both the luxury vinyl flooring and engineered hardwood categories.
Its commercial business continues to be adversely impacted by COVID-19. In the third quarter, sales of its commercial products were down 41% on a year over year basis while the industry, it believes, was down close to 25% for the same time periods.
For the first nine months of 2020, sales were $227.3 million, a 20% decline compared to $284.4 million in Q3 2019. The net loss for the company was $8.9 million, compared to a loss of $10.4 million in the first nine months of 2019.
Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, "We are pleased to report a profit for the third quarter of 2020. We continue our efforts to keep our employees safe through the COVID-19 crisis. To minimize and prevent cases of COVID-19 exposure in our facilities, we have taken measures aimed at enhancing worker safety, including large scale COVID-19 testing, mandatory temperature checks prior to starting work, and requirements to wear masks when unable to maintain social distancing. We are still assessing the long-term impacts of the COVID-19 crisis on our markets and operating practices. We are encouraged by the improvement we have seen in sales, but as a resurgence of COVID-19 cases has been seen in many parts of the country and as government authorities reassess their decisions to lift the restrictions in their jurisdictions, we are cautious as to what the remainder of the year may look like.”
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