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Dorel Home Division Q2 Sales Down Slightly

Dorel Industries posted a net loss in the second quarter with home division revenues down, while operating profit and net income gained slightly.

Net loss was $14.8 million versus net income of $11.4 million in the year-earlier quarter. Adjusted net income was $12.7 million versus $12.4 million in the year-prior period. Total revenue in the quarter was up 2% to $623.2 million compared to the period a year earlier.

In the quarter, home division total revenue decreased 1.6% to $181.3 million but operating profit increased 1.1% to $16.9 million from the year-before period. In the division, e-commerce accounted for 55% of second quarter gross sales, up from 52% in the same quarter of the prior year. Brick and mortar sales slipped but strong online sales partially offset that decline. The divisional operating profit increase in the quarter emerged from reduced operating expenses offset by lower gross profit.

The company said that the Home division is taking steps to further growth by pursuing new opportunities including a licensing agreement recently signed with Cosmopolitan magazine that will generate a collection dubbed CosmoLiving. The collection, developed jointly by Cosmopolitan and Dorel Home, will roll out this fall primarily online.

“Across our segments, Dorel Sports rebounded strongly after a tough start to the year, posting solid adjusted results. Dorel Home continued to grow online sales and maintained its strong earnings performance. Dorel Juvenile had a disappointing quarter, principally due to a difficult system implementation in Europe that caused us to miss sales. This and the fact that our Chilean business is in the middle of its turnaround plan masked our outstanding performance in the U.S.,” said Dorel president and CEO, Martin Schwartz.

He added, “In a move to strengthen our board, last month Norm Steinberg was appointed as a new director. He has a strong track record as a seasoned professional with extensive experience in M&A and in corporate governance, guiding public companies. This knowledge coupled with a proven strategic vision, leadership and legal acumen will complement our existing board members and will serve all extremely well.”