Mohawk's Posts 6.7% Sales Decline in Q1, Earnings Down 67%
Calhoun, GA, April 28, 2023-Mohawk reported net sales of $2.8 billion for Q1 2023, a 6.7% decline compared to sales of $3.0 billion in Q1 2022.
Earnings for Q1 2023 were $80.2 million, a 67% decline compared to earnings of $245.3 million in the same period last year.
For the global ceramic business, sales declined 0.5% to $1.06 billion.
Flooring North America sales declined 11.1% from $1.1 billion in Q1 2022 to $953 million in Q1 2023.
Flooring Rest of World (ROW) sales declined 9.7% to $793 million from $879 million in Q1 2022.
Commenting on Mohawk Industries’ first quarter performance, Jeffrey S. Lorberbaum, chairman and CEO, stated, “All of our businesses are adapting our strategies to a more challenging environment. We are managing our costs while investing in both our short and long-term growth. We exceeded our earnings expectations with the business maintaining higher pricing and stronger mix, and Flooring Rest of the World outperforming the other segments. The commercial channel continued to be stronger than residential with home remodeling projects being postponed and new housing construction being impacted by higher mortgage rates. Our balance sheet remains strong, and we generated $129 million of free cash flow in the quarter.”
“We strategically invested in new product innovation, enhanced merchandising and customer trade shows to improve sales. We are continuing to reduce costs across the enterprise by enhancing productivity, streamlining processes and controlling administrative expenses. Our customers remained conservative with their inventory commitments, and our operations are running at lower utilization levels, creating higher costs from unabsorbed overhead. In Flooring North America and Flooring Rest of the World, our restructuring actions are on track and should improve the results of our business.
“We are limiting our capital investments to those providing significant sales, margin and process improvements. We are expanding our constrained categories that have the greatest growth potential when the economy improves, including LVT, premium laminate, quartz countertops, porcelain slabs and insulation products. We completed two ceramic acquisitions in Brazil and Mexico that had combined sales of approximately $425 million in 2022, almost doubling our existing market share. We are developing strategies to increase sales and beginning to consolidate the businesses to reduce cost, improve efficiencies and optimize production. We also continue to improve the small bolt-on acquisitions in Europe and the U.S. that we completed last year.”
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