Mohawk Posts Sales Increase of 3.6% in Q3 with Net Loss of $534M
Dalton, GA, October 28, 2022-Mohawk announced sales of $2.9 billion in Q3 2022, an increase of 3.6% compared to sales of $2.8 billion in Q3 2021. For the same period, the company reported a net loss of $534 million, compared to earnings of $271 million in Q3 2021.
For the first three quarters of 2022, sales were $9.1 billion, an 8.3% compared to sales of $8.4 billion in the same period last year. For the same period, the company reported a net loss of $8.2 million, compared to earnings of $844 million in the first three quarters of 2021.
Net sales for the global ceramic segment were $1.1 billion in Q3 2022, an increase of 10.2% compared to net sales of $998 million in Q3 2021. For the first three quarters, net sales for global ceramics were $3.3 billion, an increase of 10% compared to sales of $3 billion in the same period last year.
Flooring North America sales rose 3.8% from $1.05 billion in Q3 2021 to $1.09 billion in Q3 2022. For the first three quarters, Flooring North America sales rose 6.5% from $3.1 billion in 2021 to $3.3 billion in 2022.
Flooring Rest of World sales were $731 million in Q3 2022, a 4.8% decline compared to sales of $768 million in Q3 2021. For the first three quarters of 2022, Flooring Rest of World sales were $2.5 billion, a 4.2% increase compared to $2.4 billion in the same period last year.
Commenting on Mohawk Industries’ third quarter performance, Jeffrey S. Lorberbaum, chairman and CEO, stated, “Mohawk’s third quarter sales increased primarily from price increases and strength in the commercial sector. Our sales were weaker than we anticipated, as the retail channel softened across all regions and product categories. The strengthening U.S. dollar also negatively impacted our translated sales by $117 million or 4.1%. Our operating income declined as lower volume resulted in higher unabsorbed cost and material, energy and transportation inflation impacted our results. Our global organization responded to the economic challenges with additional actions to optimize cost, productivity and inventory levels.
“Our businesses in Europe have been impacted more than others due to the unprecedented energy crisis and high inflation that has slowed the region’s economy. Our costs have continued to rise, and our pricing in Europe has not kept up with the recent material and energy inflation, which has compressed our margins. The Italian government provided energy subsidies during the third quarter, and additional actions from both the European Union and individual countries are being discussed. The high cost of energy has forced European consumers to concentrate on necessities and defer discretionary purchases. Our sales and margins in the market will remain under pressure until the region overcomes these challenges. These postponed purchases will increase demand when the economy rebounds and enhance our results.
“The U.S. is being impacted by high overall inflation and mortgage rates that have risen from below 3% to approximately 7%. The residential market, which is the most significant part of our business, is expected to decline further before we see an inflection point. Remodeling has slowed, and our product mix has been impacted as consumers trade down to options that fit their budgets. It is estimated that the U.S. has a housing deficit of five million units, and more than half of U.S. homes are over 50 years old. Remodeling investments are expected to grow long term as U.S. housing stock ages and families with low mortgage rates choose to remain in their homes.”
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