Mohawk Reports Earnings Increase, Sales Decrease for Q4
Calhoun, GA, February 14, 2020--Mohawk Industries announced a Q4 2019 net earnings increase of 15% YOY. Net sales for Q4 2019 were down 2.0% from the same quarter last year. For the twelve months ending December 31, 2019, net earnings were down 13.6% YOY, and sales were flat at $10 billion.
In Q4, Flooring North America Segment’s sales decreased 4% YOY (Flooring North America accounts for 39% of total sales); Global Ceramic Segment sales (which account for 35% of the company's total sales) were flat as reported, while Flooring Rest of the World Segment’s sales (accounting for 25% of total sales) increased 3%.
For the fiscal year, Flooring North America sales fell 4.8%; Global Ceramic Segment net sales rose 2% YOY; and Flooring Rest of World sales rose 3.9%.
Commenting on Mohawk Industries’ fourth quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “Our fourth quarter results were as we expected, with sales flat to last year and very strong cash generation. Operating and free cash flow for the quarter were $440 million and $300 million, respectively. For the full year, operating and free cash flow were about $1.4 billion and $870 million, respectively. Our leverage is approaching historical lows, which provides us with the flexibility to pursue additional opportunities. Under our stock repurchase program, we bought approximately $23 million in the fourth quarter, for a total of about $375 million since the inception of the buyback program.
"We have enhanced our LVT manufacturing in the U.S. and Europe and realigned our U.S. carpet operations. We have decreased our ceramic production and inventories and are taking out wood flooring plants in the U.S. and Europe.
“As we anticipated, our businesses remained challenged by soft demand, greater competition and reduced production volume. In the U.S., markets continued to be influenced by the strong dollar, the impact of LVT on other products and positive trends in housing that should be a tailwind. Competition has increased in our global markets, impacting our pricing and mix as we leverage investments in sales and marketing to drive growth. Many countries where we operate are stimulating their economies with lower interest rates to encourage greater consumer spending and economic growth this year. In the near term we still anticipate that most of our markets will have continued pressure in our product categories."