Dixie Group Inc. boosted sales in the third quarter by nearly 23 percent over the same period a year ago despite the sluggish sales growth in the carpet industry as a whole.
The Chattanooga-based carpet company said Friday the sales gain helped return the company to profitability in the three-month period ended Sept. 30. Dixie rose Friday by nearly 4 cents per share, or more than 1.3 percent, to close at $3.05 on the Nasdaq Exchange.
Dixie earned $22,000, or less than a penny a share, on sales of $69.1 million in the third quarter of this year. In the same period a year ago, Dixie lost nearly $1.9 million, or 15 cents per share.
“During the third quarter there was no relief in home sales nor any clear picture of when the housing market will improve,” Dixie CEO Dan Frierson told industry analysts Friday. “Because no improvement is apparent, we continue as an industry to suffer plant closures and staff reductions.”
Although carpet shipments were stagnant or perhaps even down this summer in the industry as a whole, Dixie reported a sharp 26 percent gain in residential sales and a 14 percent gain in commercial carpet sales. The company ran a pricing special this summer that helped boost Dixie residential sales by an estimated 6 percent, Frierson said.
The industry is boosting prices this year to offset higher material and energy costs, according to Floor Focus magazine publisher Kemp Harr who predicts an industrywide sales gain of 3 percent for all of 2011.
The biggest publicly traded carpet maker, Mohawk Industries, reported lower net income despite a nearly 10 percent rise in its revenues. Mohawk CEO Jeffrey Lorberbaum told analysts Friday he expects results to improve in 2012, albeit sluggishly.
“The consumer confidence still remains low, so we’re just a little cautious as we look forward,” Lorberbaum said. “Longer term, our sector should recover from the depressed levels and expand faster than the overall economy, as renovation and housing sales rebound.”
Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...