Mohawk Industries Inc. said Monday that the coronavirus pandemic is cutting demand for floorcovering surfaces and has forced the closing or cutback of some plants, including a production facility in Pennsylvania.
The world's biggest floorcovering company is cutting back some of its production and warned Monday that its first quarter profits will be lower than previous forecasts.
"The spread of COVID-19 is having an increasing impact on the economies where (Mohawk) operates around the world," the company said in a regulatory filing with the U.S. Securities and Exchange Commission early Monday. "Due to these factors impacting the company's manufacturing, employees and demand, parts of the Company's operations have curtailed or suspended production, with Europe being the most impacted in the first quarter. Presently, most of the facilities which have suspended operations are satisfying customer demand by delivering products from existing inventories."
Mohawk said its first quarter results "will be lower than previously expected" and the company "cannot forecast if or when any further disruptions will occur due to the rapidly changing environment as the COVID-19 pandemic and related events continue to develop."
Mohawk said its balance sheet remains "very strong" with available cash and borrowing of $1.1 billion under its revolving credit facility.
Last year, Mohawk earned $744.2 million on sales of nearly $10 billion.
"While the effects of this global pandemic are unprecedented, the company has overcome severe business downturns in the past," Mohawk said in a statement Monday. "The company is keeping employees safe, increasing work from home and adjusting strategies as required. The company's businesses around the world are balancing production with short-term demand, and non-critical expenses are being reduced or postponed, including capital spending."
Ahead of Monday's announcement, shares of Mohawk closed last week at $78.04 per share, down nearly 43% since the start of the year.