Mohawk's Sales Inch Up in Q4, Earnings Down 34%

Calhoun, GA, February 7, 2025-Mohawk announced Q4 2024 net sales for Q4 2024 were $2.6 billion, a slight increase over Q4 2023’s $2.6 billion.

The company reported earnings of $93 million, a 34% decline compared to earnings of $140 million in Q4 2023.

Net sales for the year ended December 31, 2024 were $10.8 billion, a decrease of 2.7% from 2023’s $11.1 billion.

For the year ended December 31, 2024, net earnings were $518 million, compared to a loss of $440 million in the prior year period.

In Q4 2024, the global ceramic business had sales of $1 billion, a .006% increase compared to sales of $994 million in the prior year period.For the year, global ceramics business sales were $4.2 billion, a 2% decrease from 2023’s $4.3 billion.

Flooring North America sales for Q4 2024 were $937.2 million, a 2.7% increase from $912.1 million in the same period last year. For the year, Flooring North America sales declined slightly 1.6% from $3.8 billion in 2023 to $3.8.

Flooring Rest of World (ROW) sales were $691.8 million in Q4 2024, a 2% decrease from Q4 2023’s $706.5 million. For 2024, Flooring ROW sales were $2.8 billion, a 5% decline compared to the prior year’s $3 billion.

Commenting on the company’s fourth quarter and full year, chairman and CEO Jeff Lorberbaum stated, “Our fourth quarter results exceeded our expectations as sales actions, restructuring initiatives and productivity improvements benefited our performance. Additionally, the negative sales impact from U.S. hurricanes was limited to approximately $10 million. While residential demand remained soft in our markets, our product introductions last year and our marketing initiatives contributed to our sales performance around the globe.

“The fourth quarter environment was an extension of conditions our industry faced throughout last year. Consumers continued to limit large discretionary purchases, and consumer confidence remained constrained by cumulative inflation, economic uncertainty and geopolitical tensions. During 2024, home sales around the world stayed suppressed, U.S. homeowners remained locked in place with low mortgage rates, and existing U.S. home sales fell to a 30-year low. Central banks in the U.S., Europe and other regions lowered interest rates during the later part of last year, though the impact on housing turnover was negligible in most regions. New home construction was also constrained across the world, with higher home costs and interest rates impacting starts. Throughout the year, investments in the commercial sector slowed, though they remained stronger than residential remodeling. These factors reduced market demand and created heightened industry competition for volume. This also resulted in greater unabsorbed overhead and temporary shutdown costs as we managed production and inventory. Given these conditions, we focused on stimulating sales with innovative new products, marketing actions and promotional programs.

"As we indicated in our 8-K filing on January 24, 2025, the Flooring North America Segment implemented a new order management system that had more issues than anticipated. The majority of the system processes have been corrected, and our shipments are currently aligned with our order rates. Our invoicing was delayed, and we are addressing shipping and invoicing errors with customers that mainly occurred in the beginning of the implementation. At this point, we estimate the impact on our first quarter operating income from the missed sales and extraordinary costs will be between $25 million and $30 million. We are working closely with our customers to remediate any issues or concerns. We believe the impact of the extraordinary costs will be limited to the first quarter. It is difficult to estimate the sales impact on future quarters, though we do not anticipate the system conversion issues will have a meaningful long-term effect on our customer relationships."

Said Reuters, “Mohawk's commercial business continues to outperform its residential business, with strength in hospitality, government, and education channels.

“The rate cuts by the U.S. Federal Reserve are also expected to ease borrowing costs, which in turn can aid demand for home remodeling and residential construction.”