Dorel continued to improve its results in the third quarter, with strong online sales for its home furnishing segments.
For the third quarter ended September 30, Dorel Industries posted net income of $15.9 million, or 49 cents per diluted share, versus a net loss of $8.8 million, or 27 cents per diluted share, in the year-earlier period. Adjusted net income was $20.6 million, or 63 cents per diluted share, versus $15.5 million, or 48 cents per diluted share, in last year’s quarter.
Revenue was $671.3 million, down 1.2% from the third quarter a year previous.
According to Dorel, the parent of Ameriwood Home, revenue from its home furnishings division advanced by 13.6% to $188 million in the third quarter. All home furnishings segments recorded year-over-year revenue improvement due to strong online sales, the company pointed out, which represented 44% of total division revenue in the third quarter compared to 37% of sales in the 2015 period. Operating profit increased by 65% in the quarter to $16.7 million, mainly driven by e-commerce sales at improved margins, Dorel noted. The effect of higher margin sales was partly offset by factors including higher selling and general and administrative expenses in line with the segment’s sales increase, among them increased spending on information technology to support e-commerce growth.
“Third quarter earnings improvements were led by ongoing gains at Dorel Home Furnishings, higher gross margins at Dorel Juvenile, as well as a strong performance at Pacific Cycle and reduced bicycle industry discounting at Cycling Sports Group,” said Martin Schwartz, Dorel president and CEO. “In addition, the progress during the first nine months in all of our businesses has bolstered our financial position. Year-over-year nine month cash flows from operating activities improved by $93.5 million, due primarily to enhanced management of our inventory levels. This has resulted in a significant strengthening in our financial position.”