MONTREAL - Dorel can thank its Home Furnishings business for adding significant support to its bottom line, as e-commerce growth drove the segment's operating profit up 85% for the third quarter just reported. It was a welcome boost that came at a good time - the Canadian-based conglomerate's sales were relatively flat at about US$680 million for the quarter, while its overall profits actually declined, coming in at $15.5 million, compared to $23.8 million last year.
"The third quarter was characterized by another exceptional performance in our Dorel Home Furnishings business as well as continued currency headwinds which affected both Dorel Juvenile and Dorel Sports. Our plan is to maximize cash flow while the economy recovers, placing us in an excellent position to benefit once things return to normal," stated Dorel President & CEO, Martin Schwartz.
Safety 1st Wood Decor highchairs, imported from China by a division of Montreal-based Dorel Industries, are being recalled by the U.S. Consumer Product Safety Commission (CPSC) for a safety violation.
Dorel Home Furnishings third quarter revenue increased US$19.7 million or 13.5% to US$165.5 million, from US$145.8 million a year ago. Sales to brick and mortar stores were flat for the quarter while sales to on-line retailers continue to grow, benefitting all divisions, and representing over 37% of total segment sales. Year-to-date, segment revenue has increased US$78.8 million or 19.6% to US$481.0 million from US$402.2 million in 2014 driven by both the on-line and brick and mortar channels.
Third quarter and year-to-date operating profit was US$10.1 million and US$28.4 million, an increase of 84.9% and 50.9%, respectively. All divisions posted improved results with DHP, Cosco Home & Office and the Altra import division of Ameriwood experiencing substantial growth.
"The fact that the segment has maintained brick and mortar sales at current levels is an important achievement given today's retail environment. This stability plus the exceptional progress in our online business is driving Home Furnishings success," commented Schwartz. The substantial growth trend established by Home Furnishings during the first nine months is expected to continue through the end of the year.
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