Dixie's Net Sales Fell 9.1% in Q1, Losses Declined YOY
Dalton, GA, May 20, 2020-The Dixie Group reported net sales of $80,578,000 for Q12020, down 9.1% year over year.
For Q1 2020, the company had a loss from continuing operations of $2,613,000, compared to a loss of $6,641,000 or $0.42 per diluted share in the first quarter of 2019.
Says Daniel Frierson, CEO, “We had a slow start to our sales in January, but improved in February before finally seeing the slide in sales due to the COVID-19 crisis impact us the last three weeks of the quarter. Our low point in orders occurred around the Easter holiday and have improved each week since that time. As the extent of the COVID-19 pandemic became apparent, we implemented our continuity plan to maintain the health and safety of our associates, preserve cash, and minimize the impact on our customers. We limited travel for our associates, implemented work from home options where appropriate, and limited physical contact with our customers. We have had several cases of COVID-19 exposure in our operations for which we took appropriate cleaning and safety measures, including large scale COVID-19 testing, mandatory temperature checks prior to starting work, and deep cleaning and sanitation. With the beginning of the pandemic, our orders and sales declined dramatically in late March and early April. The first few weeks of April were impacted the most and our sales and orders decreased over 50% for the month of April. Since the second week of April, our sales and orders have continued to improve and in May we anticipate sales and orders being down in the 35% range but continuing to improve sequentially. Many of our customers are reopening and beginning to generate business. We would expect business to continue improving and be at more normal levels later this year. Until then, we have reduced our running schedules for most facilities to one shift, just beneath our shipping levels, so we could maintain order flow to those customers for which we still had requirements, while simultaneously reducing inventories to align them with our lower customer demand. In order to preserve cash, we have placed a large percentage of our associates either on rotating layoff or furlough.
"Our residential product sales were down 7.3% for the quarter with the industry, we estimate, being down mid-single digits as compared to the prior year. Our residential sales were the most impacted through our mass merchant sales channel with relatively stronger sales from our traditional flooring retailers up until the crisis hit. Despite the impact of the COVID-19 pandemic, our residential hard surface sales were still up over 80% from the first quarter of 2019. All brands in specialty retail were strong.
“Our commercial product sales in the first quarter were down 12.9% on a year over year basis while the industry we believe was down in the low single digits for the same time periods. Our commercial modular carpet tile sales were more impacted than our broadloom sales for the period. Our commercial hard surface sales were up over 40% for the period relative to a year ago.”
The company is celebrating 100 years of business in 2020.