Mohawk's Q2 Sales Up 7%, Earning Down 17%
Calhoun, GA, July 29, 2022-Mohawk Industries announced Q2 2022 net sales of $3.2 billion, an increase of 7% over Q2 2021’s $3.0 billion. For Q2 2022, net earnings were $280 million, a 17% decline compared to Q2 2021’s $336 million.
For the first six months of 2022, net sales were $6.2 billion, an 11% increase compared to sales of $5.6 billion in the first half of 2021. Net earnings for the first half of 2022 were $526 million, an 8% decline compared to the first half of 2021’s $573 million.
Net sales for the global ceramic business in Q2 2022 were $1.2 billion, a 20% increase compared to $1.0 billion in Q2 2021. For the first half of 2022, ceramic sales were $2.2 billion, a 10% increase compared to $2.0 billion in the first half of 2021.
Flooring NA’s Q2 2022 sales were $1.1 billion, virtually flat with Q2 2021. For the first half, Flooring NA sales were $2.2 billion, a 5% increase compared to $2.1 billion in the first half of 2021.
Flooring Rest of World (ROW) sales for Q2 2022 were $3.2 billion, a 7% increase compared to $3.0 billion in Q2 2021. Flooring ROW sales for the first half of 2022 were $6.2 billion, an 11% increase compared to $5.6 billion in the first half of 2021.
Commenting on Mohawk Industries’ second quarter performance, Jeffrey S. Lorberbaum, chairman and CEO, stated, “During the quarter, sales grew in all of our segments, with our top line results benefiting from price increases, enhanced product mix, improvements in commercial and contributions from our small acquisitions. As the quarter progressed, the global economic environment became increasingly challenging, and our organization implemented additional actions to support our performance. Our operating income for the quarter was in line with our expectations, even as material, energy and transportation inflation remained a significant headwind and our translated results were impacted by the strengthening U.S. dollar.
“Over the past 18 months, all of our businesses have faced extraordinary inflation, and we have instituted multiple price increases to pass through these higher costs. We are also taking numerous operational actions, including cost controls, productivity improvements, mix and logistics enhancements. Across all our markets, inflation is causing changes in consumer discretionary spending. U.S. housing sales have been impacted more than our other markets as mortgage rates have risen faster. Unlike past economic cycles, housing demand exceeds available supply and foreclosures are not an issue. In Europe, interest rates have not risen as much as in the U.S., though consumer discretionary spending is being eroded by energy and other inflation, which is impacting demand. In most of our regions, investments in commercial new construction and remodeling remain solid. Both commercial projects that were deferred due to the pandemic and new projects are being initiated in greater numbers as the sector continues to strengthen.
“As we navigate near-term market dynamics, Mohawk’s strong balance sheet provides many options for investments, including internal expansion, acquisitions and stock buybacks. During the second quarter, we announced approximately $440 million in new acquisitions, with the largest being the agreement to acquire Vitromex, a leading ceramic manufacturer in Mexico. In early July, we completed the acquisition of Foss Floors, a leading U.S. needle punch flooring manufacturer. In Europe, we are making excellent progress in integrating our 2021 insulation and panels acquisitions, which are contributing to our results as expected. Our expansion projects remain on schedule, including laminate, LVT, quartz countertops and European high-end porcelain slabs, all of which will help us satisfy current and future demand.”
"Residential remodeling is softening as consumers postpone ungrading their homes," Lorberbaum said.