Dixie Group Reports $5M Income on 7.2% Decline in Sales for FY 2023

Dalton, GA March 8, 2024-For Q4 2023, Dixie Group reported net sales of $66.7 million, a 5.4% decline compared to net sales of $70.5 million in Q4 2022. The net income for Q4 2023 was $3.2 million, compared to a loss of $18.5 million in Q4 2022.

For 2023, net sales for the company were $276.3, a 9% decline compared to $303.6 million in 2022. The net loss for 2023 was $2.7 million, compared to a net loss of $35.1 million in 2022.

Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, “Adjusted for the additional week in our prior fiscal year, weekly sales in the fourth quarter were approximately 2% better in 2023 as compared to 2022. Net sales for the year 2023 were down 9.0% over prior year but were down 7.2% on an adjusted weekly basis. The lower net sales amount was the result of a slowdown in the floorcovering industry driven by high interest rates which have dramatically impacted the housing and residential remodeling markets. We believe the overall flooring industry experienced a significantly higher reduction in year over year sales volume, indicating we are continuing to gain market share in our core markets.

“During 2023, we were able to reduce costs over $35 million and we have a plan to further reduce costs in 2024 by $10 million. Our gross margins in the fiscal year 2023 improved by nine percentage points to 26.7% of net sales as compared to 17.7% of net sales in the fiscal year of 2022. This significant improvement to gross margins in 2023 is, in part, the result of our cost reductions and plant consolidation efforts that were substantially complete in the first quarter of the year. The facility consolidations have better aligned production with demand and lowered costs through more efficient absorption of fixed costs and headcount reductions, and we have experienced operational improvements in our manufacturing facilities.”