Mohawk’s Q2 Sales Down 6.4%, Earnings Down 64%

July 28, 2023, from Floor Focus FloorDaily News

Calhoun, GA, July 28, 2023 – Mohawk Industries announced Q2 2023 net sales of $2.95 billion, a 6.4% decrease from Q2 2022’s $3.15 billion.

Net earnings for the period were $101 million, a 63.9% decrease from Q2 2022’s $280 million.

Global Ceramic sales for Q2 2023 were $1.16 billion, a 0.3% decrease from the $1.16 billion a year ago.

Flooring North America sales were $1 billion in Q2 2023, 8.9% lower than Q2 2022’s $1.1 billion.

Sales for the Flooring Rest of World segment in Q2 2023 were $793 million, 11.4% lower than the $895 million for this period last year.

Commenting on Mohawk Industries’ second quarter performance, chairman and CEO Jeffrey S. Lorberbaum says, “Our margins across the enterprise expanded sequentially due to seasonal improvements, increased production, productivity initiatives and lower input costs. We generated $147 million of free cash flow during the quarter, further strengthening our financial position.

“Typical of housing recessions, higher interest rates and inflation are significantly impacting flooring sales around the world. To manage, we are selectively investing to increase sales and reducing expenses by enhancing productivity, consolidating distribution points and improving administrative efficiencies. In the quarter, we initiated restructuring and integration actions that should save $35 million annually at a total cost of approximately $17 million. We anticipate half of the estimated savings should be realized in the current year, partially offsetting weak residential remodeling activity.

“In addition, we are limiting future capital investments to those delivering significant sales, margin and operational improvements. In all our regions, we are taking actions to increase sales, including promotions, retailer incentives and selective product launches. The integration of our recent acquisitions is progressing as we combine strategies and enhance their manufacturing and product offering.

“Residential remodeling remains the industry’s greatest headwind due to lower home sales and deferred home improvement projects. We expect the commercial sector to outperform the residential channel through this year, even with continued weakness in the office category. Though employment remains strong, remodeling and existing-home sales are being delayed due to limited housing availability, higher interest rates and inflation. Historically, when the economy recovers, these postponed remodeling projects fuel greater industry growth.

“Our porcelain slab, insulation, premium laminate, LVT and quartz countertop manufacturing expansions should deliver the greatest growth as the markets recover.”