The Dixie Group Inc. narrowed its losses in the second quarter of this year compared to a year ago, even as sales for the Chattanooga-based flooring manufacturer fell by nearly 12% from where they were a year ago.
The Dalton, Georgia-based manufacturer of carpet and tile reported Friday a loss of $1.7 million, or 12 cents per share, on sales of just over $74 million in its second quarter. In the same period a year ago, Dixie reported a net loss of more than $4 million, or 26 cents per share, on sales of $83.7 million.
“Our second quarter results continued to show the positive impact of the plant consolidation and cost reductions we began in 2022,” Dixie CEO Dan Frierson said in a quarterly earnings report Friday. “Our gross margins were strong as our manufacturing plants continue to operate at levels of high efficiency despite the lower year-over-year sales volume.”
Frierson said much of Dixie’s drop in sales was due to customers shifting to lower-priced items.
“This decline in sales was primarily the continued result of high inflation and increased interest rates impacting consumer confidence and demand in the second quarter of 2023,” Frierson said in the earnings report. “For the first half of 2023, we have experienced higher selling expenses driven by samples and marketing investment for new product offerings, particularly in our new decorative line and the growing hard surface flooring market. The majority of the benefit of this current year expense will be reflected in sales in future periods.”
Dixie said it launched 11 new products in its synthetic soft surface lines this spring, including four new styles in DH Floors a collection made with DuraSilk solution dyed polyester, three new nylon products in the Masland Energy main street commercial group and four new EnVision nylon styles in the high-end residential Masland and Fabrica brands.
In response to the narrower losses, shares of Dixie’s stock traded higher for much of Friday before closing unchanged in trading on the Nasdaq exchange. So far this year, Dixie shares have gained more than 47%. But the stock still remains more than 30% below its year-ago level.
— Compiled by Dave Flessner