Mohawk Industries Revenue up 44% in Q2

Calhoun, GA, July 30, 2021- Mohawk Industries (NYSE: MHK) today announced Q2 2021 net sales of $3 billion and earnings of $336 million . Revenue was up 44% or 38% on a constant currency and days basis. For the Q2 2020, net sales were $2.0 billion, net loss was $48 million and diluted loss per share was $0.68, adjusted net earnings were $26 million, and EPS was $0.37, excluding restructuring, acquisitions and other charges.

For the six months ending July 3, 2021, net earnings were $573 million . For the first half of 2021, net sales were $5.6 billion, an increase of 30% versus prior year as reported or 23% on a constant currency and days basis. For the first half of 2020, net sales were $4.3 billion and net earnings were $62 million. 

According to Jeff Lorberbaum, Mohawk’s chairman and CEO, “In the quarter, we generated the highest quarterly sales of any period in our company’s history. Our revenues increased significantly over last year, when the pandemic interrupted the global economy.  The actions we have taken to simplify our product offering, enhance our productivity and restructure our costs are benefiting our results. We have delivered almost $95 million of the anticipated $100 to $110 million in savings from our restructuring initiatives. Across the enterprise, we continue to respond to rising material, energy and transportation costs by increasing product prices and optimizing manufacturing and logistics.

“During the quarter, most of our manufacturing ran near capacity or were limited by material supply and labor availability. Raw material constraints in many of our operations led to unplanned production shut downs during the period.  Our inventory levels increased slightly in the period, primarily reflecting higher material costs. Rising freight costs and limited shipping capacity impacted our material costs, availability of imported products, local shipments to customers and international exports. Presently, we do not anticipate near term abatement of these constraints.”

Commenting on Mohawk’s North Amercian business segment, Lorberbaum said, “During the quarter, our Flooring North America Segment’s sales increased 35% as reported and on a constant basis and operating margin was 10.7% as reported, primarily due to higher volume, productivity, pricing and mix improvements and fewer Covid interruptions partially offset by inflation. Through the period, our order rate remained strong, and our sales backlog remains above historical levels. We are maximizing output at our facilities to support higher sales and improve our service. During the quarter, our production levels were hindered by local labor shortages and material supply, particularly in LVT, sheet vinyl and carpet. Ocean freight constraints delayed receipt of our imported products, impacting our sales, inventories and service levels. We implemented price increases as our material and transportation costs increased, and we have announced additional pricing actions as inflation continues.”

In terms of its Rest of the World segment, Lorberbaum said, “For the quarter, our Flooring Rest of the World Segment’s sales increased 68%.  The segment’s operating margins increased from 5.9% to 19.7% as reported. 

Reporting on its ceramic tile business, Lorberbaum noted, “For the quarter, our Global Ceramic Segment’s sales increased 38%. The segment’s operating margin increased to 13.1%, primarily due to higher volume, productivity, pricing and mix improvements and fewer Covid disruptions partially offset by inflation. Our ceramic businesses around the world have greatly improved, with strength in the residential channel and increasing commercial sales. All of them have low inventories, which impacted our sales growth and service levels. We continue to raise prices to cover material, energy and transportation inflation. Our U.S. ceramic business is strengthening, and we are improving our product mix with new shapes, sizes, and surface structures.”

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