Dixie Group Sales Down 2.7% YOY in Q1, Net Loss of $857,000

Dalton, GA, May 2, 2024--The Dixie Group reported net sales for Q1 2024 were $65.3 million, a 2.7% decline compared to $67.1 million in the same period of the prior year.

For Q1 2024, the company had an operating loss of $857,000, compared to an operating income of $306,000 in Q1 2023. 

Commenting on the results, Daniel K. Frierson, chairman and chief executive Officer, said, "Our net sales for the quarter were negatively impacted by high interest rates affecting the housing and home remodeling market and the impact on the economy from continued inflation. Overall, our net sales during the quarter were 2.7% below prior year while the industry, we believe, was down approximately 8%. Due to this lower demand, we saw less favorable margins in the first part of the quarter as lower volume resulted in under absorbed fixed costs in our manufacturing plants. By the end of the quarter, in the month of March, net sales were slightly ahead of the same month in the prior year and our operating margins for the month were more in line with prior year and our expectations.

“We are excited about the start of our nylon extrusion line in North Georgia. The internal production of raw materials will provide us with lower costs, as compared to our current external purchasing, and it will provide us with a continuity of supply, protecting us and our customers from potential supply disruptions. Our initial focus has been on extruding white, dyeable nylon which allows us to present long, beautiful color lines that stand out in a residential market that has moved to a solution dyed polyester sea of sameness. In support of this, we launched a color marketing campaign, Step Into Color, which connects retailers and consumers with a world of color options, including custom colors that are prevalent in Fabrica, but also available in our other soft surface divisions.

“Our new product offerings will help us continue to maintain sales volume in a difficult market. Additionally, we plan to reduce year over year costs by $10 million in 2024 through cost savings related to our extrusion operations and the reduction of other controllable costs. We believe, once interest rates come back down and consumer confidence returns, the housing market along with remodeling activity, will rebound strongly, driven by pent up demand." Frierson concluded.

Related Topics:The Dixie Group