Carpet and tile sales dropped by 6.4% from year-ago levels in the second quarter for the world’s biggest flooring company as higher interest rates curbed new home sales and commercial building and remodeling activity.
Mohawk Industries Inc. reported Thursday adjusted quarterly earnings of $176 million, or $2.76 per share, on sales of nearly $3 billion in the three months ended June 30. In the same period a year earlier, Mohawk had adjusted earnings of $280 million, $4.40 per share, on sales of $3.2 billion.
Despite the 37.3% decline in quarterly earnings, the results exceeded Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for the Calhoun, Georgia-based flooring manufacturer to earn $2.64 per share. Revenues also surpassed Wall Street forecasts.
Nonetheless, shares of Mohawk traded lower after the results were released in after-market trades.
“Typical of housing recessions, higher interest rates and inflation are significantly impacting flooring sales around the world,” Mohawk CEO Jeff Lorberbaum said in the quarterly earnings report issued after the market closed Thursday. “To manage, we are selectively investing to increase sales and reducing expenses by enhancing productivity, consolidating distribution points and improving administrative efficiencies.”
Lorberbaum said Mohawk expects to save $35 million in costs over the next year from restructuring and integration actions taken in the past quarter.
“In addition, we are limiting future capital investments to those delivering significant sales, margin and operational improvements,” Lorberbaum said.
— Compiled by Dave Flessner