Mohawk Reports 25% Increase in Net Earnings YOY

Calhoun, GA, November 4, 2016—Mohawk announced 2016 Q3 net earnings of $270 million, and diluted earnings per share (EPS) of $3.62, compared to 2015 Q3 net earnings of $215 million, and diluted EPS of $2.89. This represents a 25% increase versus prior year.

Net sales for the third quarter of 2016 were $2.3 billion, up 7% versus the prior year's $2.15 billion.

For the nine months ending October 1, net earnings and EPS were $696.6 million and $9.34, respectively. Net earnings excluding restructuring, acquisition and other charges were $697.1 million and EPS was $9.35, an increase of 27% over the nine-month period adjusted EPS result in 2015.

For the nine month period, net sales were $6.8 billion, an increase of 12% versus prior year as reported and 5% on a legacy basis applying constant currency rates. For the nine-month period ending October 3, 2015, net sales were $6.1 billion, net earnings were $424 million and EPS was $5.73; excluding restructuring, acquisition and other charges, net earnings and EPS were $546 million and $7.38.

Commenting on Mohawk Industries' third quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, "During the period, our growth strengthened, and our margins continue to expand compared to the last year. Our strategy of investing in our existing business as well as synergistic acquisitions continues to deliver record results. Our earnings per share for the period were an all-time record for the company, marking the tenth consecutive quarter that Mohawk has delivered a year-over-year record quarterly EPS. Our operating margin rose to an all-time record of 16.5% or 16.0% on an adjusted basis, an increase of 160 basis points, as a result of higher sales volume and productivity.

"During the quarter, our Flooring North America Segment's sales were up 6% as reported or 7% on a constant days basis. Operating income grew 35% to a margin of 17% as reported or excluding restructuring, integration and other charges, to a margin of 15%. Both our hard and soft surface flooring increased with hard surface growing faster. Our strong commercial carpet and rug sales offset softer residential carpet which was impacted by polyester growth and pressure on commodities. Product innovation continues to drive our business, and recent introductions comprised about one-third of our soft surface sales during the period. Our commercial carpet performance continues to strengthen with all end markets growing. We have expanded our commercial sales force and are increasing our participation in individual projects and large national accounts. We announced a residential and commercial carpet price increase of 3-5% for January 2017 to offset costs. Our rug sales grew as we introduced new fashion-forward collections and entered new categories with outdoor rugs and utility mats. Our hard surface sales continue to grow significantly with expanded margins. Improvements in our LVT production continue to increase our capacity and broaden our product offering. We are completing our new engineered wood plant, which will allow us to introduce larger sizes with unique finishes. The expansion of our laminate capacity in 2017 will help to satisfy increasing demand for our premium collections with superior performance and realistic visuals.”