Dorel noted that the fourth quarter and full year’s sales improvements at its home division came despite some customers cancelling orders in response to tariffs being imposed in the U.S. during 2018’s second half.
For the fourth quarter, Dorel Industries recorded a net loss of $443.9 million, or $13.68 per diluted share, compared with a net loss of $6.1 million, or 19 cents per diluted share in the last fourth quarter. Adjusted net income was $10.3 million, or 31 cents per diluted share, versus $17.3 million, or 53 cents per diluted share, in the year-prior period.
According to Dorel, ignoring the 2017 fourth quarter impairment loss on trade accounts receivable from Toys “R” Us U.S. of $2.8 million after tax, the comparative fourth quarter adjusted net income was $20.1 million, or 62 cent per diluted share.
Revenue was $683.5 million, up 1% from the year previous quarter. In the fourth quarter, Dorel Home posted revenue of $209.3 million versus $201 million, and operating profit of $17.5 million versus $21.1 million.
For the full fiscal year, Dorel recorded a net loss of $444.3 million or $13.70 per diluted share, compared with net income of $27.4 million, or 84 cents per diluted share; and adjusted net income of $39.5 million, or $1.21 per diluted share, versus $67 million, or $2.05 per diluted share, in the prior year.
Dorel maintained that ignoring the 2018 first quarter and 2017 fourth quarter impairment losses on trade accounts receivable from Toys “R” Us of $9.4 million after tax and $2.8 million after tax respectively, the adjusted net income for the year was $48.9 million, or $1.50 per diluted share, compared to $69.8 million, or $2.14 per diluted share, a year earlier.
Revenue for fiscal 2018 was $2.62 billion versus $2.58 billion the previous year. In the full fiscal year, Dorel Home posted revenue of $804.4 million versus $790.6 million and operating profit of $70.2 million versus $78.1 million the previous year.
For the fourth quarter and the full year, e-commerce sales represented a record 59% and 56% of total segment gross sales respectively. Brick and mortar sales in the home division experienced a slight fourth quarter improvement from the period a year ago, Dorel reported, aided by new Cosco business at a major do-it-yourself retail chain. Although a small percentage of overall revenue, fourth quarter branded-product sales gained year-over-year and the period experienced a “decent start” for the new Cosmo Living business, the company maintained.
“Dorel Home has again performed well and continues to benefit from our market-leading innovations in e-commerce,” said Dorel president and CEO Martin Schwartz. “At the same time, we were disappointed by fourth quarter earnings at Dorel Juvenile and Dorel Sports. Both segments were affected by lower than expected industry-wide consumer demand over the holiday season and the ongoing changes in the consumer products industry. Despite the challenges facing the retail sector as a whole, we are committed to continuing to take action to build value for Dorel shareholders, including making some tough but necessary decisions. We have been acting on the recognition that the way our industry does business and the expectations and behaviors of customers and consumers are all changing. Dorel is in the process of initiating a restructuring program to evaluate our global footprint and to optimize our company to meet these new realities. We’re confident that this program will help us be more efficient, improve performance and maximize long-term value for our shareholders.”