Carpet and rug maker the Dixie Group reported a 6 percent drop in sales during the first quarter, posting about $74.5 million compared to nearly $80 million a year ago. The Chattanooga-based company, which is best known for its Fabrica International, Masland Carpets and Dixie Home brands, said sluggish carpet sales at Home Depot triggered the sales dip.
“Almost 60 percent of
our carpet sales decline was due to lower sales to one customer – the Home
Depot – where carpet business was extremely weak,” said Daniel K. Frierson,
Dixie’s chairman and ceo. “Residential carpet sales to our other customers were
down only about 4 percent, and our
commercial carpet sales were off less than one half of 1 percent.”
“Nevertheless, our sales
continued to outperform the carpet industry as a whole, where sales were off
almost 10 percent compared with the year-earlier period,” he added.
The Dixie Group also posted a
loss in its income from continuing operations. The first quarter tally ended at
$237,000 or 2 cents per diluted share, compared to last year’s $926,000 or 7
cents per diluted share. First quarter net income was also soft: $171,000 or 1
cent per diluted share compared to last year’s $835,000 or 6 cents per diluted
revenue and the effect on fixed costs of the drop in unit volume, our gross
margin as a percentage of net sales improved compared with the first quarter a
year ago,” Frierson noted. He added that Dixie plans to roll out an ambitious
mix of new commercial and residential carpets later this year.
“These new products
should fuel sales growth,” he said. “The improvement we are seeing in our
commercial business and the anticipated effect of our new residential products
make us optimistic that our sales will continue to outpace those of the rest of
the carpet industry.”