Buoyed by record sales at the end of 2020, Mohawk Industries, Inc. beat analysts’ expectations for earnings in the fourth quarter as more homebound workers and students around the globe boosted spending on residential floorcoverings.
The Calhoun, Georgia-based carpet, tile, vinyl and laminate maker said Thursday it earned a net profit of $248 million, or $3.49 per share, on sales of $2.6 billion in the fourth quarter. A year earlier, Mohawk earned $265 million, or $3.68 per share, on sales of $2.4 billion, which included a one-time tax benefit.
The results were 67 cents per share better than what analysts had forecast for Mohawk, boosting shares of Mohawk stock in after-hours trading. Mohawk’s stock, which has already rose by more than 13% so far this year, was trading up by more than 4% after the earnings results were announced Thursday after regular market trading.
“Our fourth quarter results exceeded our expectations as we posted our highest ever quarterly sales,” Mohawk CEO Jeffrey Lorberbaum said in the quarterly earnings report. “All of our markets saw strengthening residential purchases, with laminate, LVT and sheet vinyl outperforming other flooring categories.”
Lorberbaum said commercial activity remains weak as the pandemic continues and fewer people are going to offices or shopping in stores.
“We are also seeing greater inflationary pressures in many product categories, and we are increasing prices to recover,” Lorberbaum said. “Through the fourth quarter we have achieved about $50 million of the projected $100 to $110 million in anticipated savings from our restructuring initiatives. We continue to assess some projects based on changing market conditions.”
For all of 2020, Mohawk said it earned $516 million, or $7.22 per share, on sales of $9.6 billion. In 2019, Mohawk earned $744 million, or $10.30 per share, on sales of about $10 billion.
Mohawk is the world’s larget floorcovering manufacturer.
Lorberbaum said Mohawk’s “strong financial position gives us flexibility to pursue additional opportunities, including internal investments, acquisitions and stock purchases.” Since last fall, Mohawk has acquired about 1 million shares of its stock repurchase plan.