Calhoun, Ga. -- Mohawk Industries announced third quarter net earnings of $227 million for the period ending September 29, 2018. Net sales for the third quarter of 2018 were $2.5 billion, up 4% in the quarter and 5% on a constant currency basis.
In the period, the acquisition of Godfrey Hirst added revenues of approximately $70 million, even as the Australian market slowed due to higher mortgage rates, lending restrictions and reduced exports to China.
"Our third quarter results fell short of our expectations,” said Jeffrey S. Lorberbaum, chairman and CEO. “Sales growth in all segments was lower than our estimates, price increases had less impact and we experienced more inflation than predicted. Transportation costs continued to rise due to the limited availability of common carriers and higher fuel prices. Additional manufacturing reductions were required during the period to control our inventory levels.”
Lorberbaum reported that LVT sales were up significantly, but were constrained by internal production.
“Our margins were further impacted by a decline in product mix from customers trading down, import competition due to the strengthening U.S. dollar and higher volumes in channels that use lower value products,” he added. “Most of our markets have experienced weakening demand, inflation and pricing pressures.”
The company has many projects in the works, including starting up production for rigid LVT and premium laminate in the U.S., ceramic tile in Mexico, and rigid LVT, carpet tile, porcelain slabs, technical tile and premium laminate in Europe. Other projects under construction include quartz countertops in the U.S., porcelain tile in Poland, and sheet vinyl and premium laminate in Russia.
During the quarter, Flooring North America Segment's sales increased 2%.
“Sales and volume did not improve as we had anticipated, and mix declined from growth in polyester carpets, customers trading down, and higher sales in lower value channels,” Lorberbaum said.
For more information, visit mohawkind.com.