"With the sale of our commercial business, the third quarter was the beginning of our company as a residential floorcovering only focus,” said Daniel Frierson, chairman and CEO. “During the quarter, we continued to gain market share and began significant changes, which we believe will enhance our future prospects.”
Residential business in the third quarter continued to be very strong, the company said. Net sales were 27% ahead of same period in the prior year, including sales of soft surface products that were up 22% and hard surfaces up 73%. Order entry remained well above prior year levels throughout the quarter, the company said.
For the first nine months of the year, Dixie Group’s total net sales of residential products was up 49% over the same period in the prior year despite product launches being delayed from a second-quarter ransomware attack.
“This significant year over year increase in the net sales of our residential floor covering products was the result of the impact of the COVID-19 pandemic in 2020 and strong growth in new and existing home sales and home remodeling in 2021,” Frierson said. “The departure of Stainmaster from the residential market represents a major change, but one which offers opportunities for growth and repositioning.”
The company implemented a number of strategies to help customers transition to the company’s new brands, EnVision66, EnVisionSD Pet Solutions, along with two new collections for the upper end of the decorative market.
“During the third quarter, we also executed the specialty retail transition away from the Stainmaster and PetProtect brands to our EnVision66 and EnVisionSD Pet Solutions brands,” Frierson said. “This included producing, distributing, and in some cases installing new labels on our products throughout our specialty retail channel. As part of this effort, we executed full floor resets on 217 retail stores who have joined our new Premier Flooring Center network.”
In hard surfaces, the company launched Trucor Applause, a new domestically sourced SPC offering with eight SKUs, and Trucor 3DP, a program with 16 SKUs, including wood and stone looks.
“Our Trucor brand has continued to grow even more rapidly than the LVF market,” Frierson said. “With additional cutting-edge products and focus on domestic sourcing, we feel we can continue growing faster than the marketplace."
“The momentum of our sales of residential products has continued into the fourth quarter,” Frierson said. “For the first five weeks of the quarter, our sales are up 20% compared to a strong performance a year ago. Due to increased cost pressure on many fronts, industry wide price increases were announced during the third quarter. Additional price increases have been announced for year-end as raw material, labor and transportation costs have continued to escalate.”