Mohawk Sales Up 9.4% in Q3, Earnings Up 32%
Calhoun, GA, October 29, 2021-Mohawk Industries announced Q3 2021 net earnings of $271 million, a 32% increase compared to $205 million in Q3 2020. Net sales for Q3 2021 were $2.8 billion, up 9.4% compared to $2.6 billion in Q3 2020.
For the quarter, flooring North America sales were $1.05 billion in Q3 2021, up 7% compared to Q3 2020’s $982 million. For the first nine months of 2021, flooring North America sales were $3.1 billion, a 19% increase from the first nine months of 2020’s $2.6 billion.
Global ceramic sales increased approximately 9.6%, from $998 million in Q3 2020 to $911 million in Q3 2021. For the first nine months of 2021, global ceramic sales were $3 billion, a 20% increase from the first nine months of 2020’s $2.5 billion.
Flooring rest of world sales were $768 million in Q3 2021, up 12.8% compared to $681 million in Q3 2020. For the first nine months of 2021, flooring rest of world sales were $2.4 billion, a 33% increase from the first nine months of 2020’s $1.8 billion.
For the first nine months of 2021, net earnings were $844 million, a 216% increase compared to $267 million in the first nine months of 2020. For the first nine months of 2021, net sales were $8.4 billion, an increase of 22.1% versus prior year’s $6.9 billion.
Commenting on Mohawk Industries’ third quarter performance, Jeffrey S. Lorberbaum, chairman and CEO, stated, “All of our businesses performed well, managing through a changing environment. In the period, Covid directly and indirectly impacted many economies, creating supply chain difficulties that disrupted production as well as leading to government lockdowns in Australia, New Zealand, and Malaysia that halted manufacturing and retail. Despite these and other headwinds, our third quarter sales trends continued in most regions, with Europe’s results reflecting normal summer seasonality. Home sales were robust across most geographies, and consumers continued remodeling investments at a strong pace. Year over year, the commercial sector showed improvement, though at a slower rate as Covid concerns delayed the timing of some projects. Our strategies to enhance organizational flexibility, reduce product and operational complexity, and align pricing with costs improved our results.
“Even with greater external constraints, we ran most of our operations at high levels, and we successfully managed many interruptions across the enterprise. Rather than improving as expected, the availability of labor, materials and transportation became more challenging, resulting in higher costs in the period. Tight chemical supplies, in particular, reduced the output of our LVT, carpet, laminate and board panels. For the near term, we do not foresee significant changes in these external pressures. Due to supply shortages, government regulations and political issues, natural gas costs in Europe are presently about four times higher than earlier in the year. This adds a temporary challenge to our European businesses as the higher costs are reflected in gas, electricity and materials.
“Most of our businesses are carrying significant order backlogs, and we plan to run our operations at high levels during the fourth period to improve our service and efficiencies. Currently, some of our fastest growing products are being limited by material and capacity constraints. We have initiated additional investments to increase our production of those and increase our sales and service. Completion of these projects is being extended due to longer lead times on building materials and equipment.”
Of the flooring North America business, Lorberbaum says, “Flooring North America had strong results given the material, transportation and labor constraints impacting our sales and production during the period. We implemented additional price increases across most product categories as inflationary pressures intensified. We continue to streamline our product portfolio and reduce operational complexity benefiting our efficiencies and quality. In carpet, residential was limited by material and labor, which affected our production and costs. Commercial sales improved, though the rate of growth slowed as Covid cases increased. In both residential and commercial manufacturing, we are investing in more efficient assets to improve cost, enhance styling and reduce labor requirements. Our laminate and wood business continues to grow, though our sales were restricted by our capacities. Our new laminate line should be operational by the end of this year to expand our sales and provide more advanced features. Our new high performance UltraWood collections are increasing our mix in wood, and the productivity of our new plant is improving as volume increases. Our LVT sales increased in the period, even with material supply limiting production and shipping delays in our sourced products. We have improved our LVT mix with enhanced features and lowered our cost by streamlining our processes. We are also increasing our sheet vinyl plant’s production to satisfy expanding sales of our collections.”
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