This story was updated Thursday, July 25, 2019, at 11:55 p.m. with more information.
Mohawk Industries Inc. boosted its second quarter earnings from a year ago, but the world's biggest floorcovering company said it is still working to cut costs in a stagnant market for carpets, tile and hard surface flooring.
The Calhoun, Georgia-based floorcovering maker said Thursday its second quarter profits this year totaled $202.4 million, or $2.79 per share, compared to a profit of $196.6 million, or $2.62 per share, a year ago.
Mohawk's net sales for the second quarter of 2019 were $2.6 billion, up 0.3% as reported and 2.4% on a constant currency and days basis.
Mohawk CEO Jeff Lorberbaum said the results were on the high end of the company's previous guidance, but he said he is eager to do better and is working to trim expenses and inventory to improve future profitability.
"The U.S. dollar strengthened compared to the prior year, reducing our translated results for the quarter by approximately $9 million," Lorberbaum said in an earnings release after the market closes. "Most markets we operate in remain soft, with pressure on volume and pricing, and we anticipate the environment to remain difficult."
Lorberbaum said Mohawk's material costs were down, but labor and energy costs were up this spring. Residential carpet sales have declined, and lower cost polyester carpet is taking a bigger share of sales, the company said.
"Given the uncertainties in our markets, we are taking actions to improve our business," Lorberbaum said. "We are streamlining our operations, consolidating facilities and taking out higher cost assets. We are reducing production to control inventory levels, introducing new product categories and increasing promotions to address changing markets."
Ahead of the earnings announcement, Mohawk shares traded up $1.92 a share, or 1.2%, to close at $156.36. Mohawk shares have jumped nearly 33.7% so far this year after the company's stock value fell by more than 57% during 2018.