The Dixie Group nearly doubled its residential carpet sales this spring from the pandemic-driven levels of a year earlier and reported a profit from ongoing operations compared with a net loss the year before.
The turnaround for the Dalton, Georgia-based floor covering company - and the prospect of the sale of its less-profitable commercial carpet business - boosted shares of Dixie on Thursday by nearly 29%.
"During the second quarter of 2021 we were able to build on the momentum we experienced through the end of the first quarter," Dixie CEO Dan Frierson said in Thursday's earnings release. "Overall, net sales increased 72.3% compared with the second quarter of 2020. Net sales of our residential floor covering products were up 99.5%, or close to double the comparable residential sales from the second quarter of 2020, comparing favorably to the industry which we believe was up approximately 50-55%."
Frierson said commercial carpet sales grew more slowly. Dixie is in the process of negotiating the sale of its commercial carpet business to Mannington Mills. On June 30, Dixie said it was selling its commercial brands to focus on its more profitable residential carpet business.
Staff file photo / Dan Frierson"This sale would represent a major change of focus for our company," said Frierson, the CEO of Dixie since 1999 who helped reshape the former yarn and thread maker into a floor covering manufacturer during his tenure. "We are currently negotiating terms and conditions of the proposed sale (to Mannington). Upon successful completion of the sale, our entire focus would be solely on the residential floor covering market where our well known and respected brands continue to gain market share."
Dixie said it had s profit of 21 cents per share in the second quarter. Earnings, adjusted for non-recurring costs and to account for discontinued operations, were 22 cents per share. The floor covering company posted revenue of $104.8 million in the period.
The company's shares closed Thursday at $3.49 per share, up 78 cents per share. A year ago, Dixie shares traded at $1.02 per share.
- Compiled by Dave Flessner