Home Furnishings Gain, But Dorel Profits Hit By Currency Rates

For the first quarter ended March 31, Dorel Industries Inc. posted net income of $11.6 million, or 36 cents per diluted share, versus $24.8 million, or 77 cents per diluted share, in the 2014 period. Total revenue increased 2.7% to $665.5 million, the company reported.
Foreign exchange rate volatility had a negative effect on Dorel’s first quarter earnings equivalent to 30 cents per diluted share, the company stated.
Home furnishings revenues gained 17.2% to $161.9 million with operating profit increasing by 18.3% to $9.6 million. E-commerce sales and related drop-ship vendor programs continued expanding, now representing over 30% of total segment revenues, according to Dorel. Sales to brick and mortar stores also increased versus the previous year. Growth came from sales of mattresses, beds and upholstered furniture, the company reported, with additional listings at retailers resulting in strong sell through on many items. All divisions posted improved operating profit, Dorel noted, with the exception of Cosco Home & Office due to product mix sold.
“As expected, Dorel’s first quarter performance was significantly affected by the continued strength of the U.S. dollar and resulted in a net negative impact on earnings in our markets outside of the U.S. where almost half of our revenue is derived,” said Dorel president and CEO, Martin Schwartz. “Corporate-wide, foreign exchange reduced operating profit in reported currency by approximately U.S. $12 million. This situation is clearly not unique to Dorel and overshadows a number of first quarter’s positive accomplishments.”
All Dorel financial results are stated in United States currency.