MONTRÉAL — Dorel Industries Inc. announced on August 8 its financial results for the second quarter and six months ended June 30, 2025. While the company said its Juvenile segment delivered strong second-quarter results, its home furniture division, which has been restructuring its operations, did not fare as well.

To stabilize and improve its home segment financial results, the division has been restructuring, including closing factories and reducing its product portfolio. In June, Dorel Home announced it was closing its North American manufacturing operations and reducing its product portfolio. On August 7, the company announced it had amended its asset-backed loan facility and term loan facility, whereby Dorel’s lenders agreed to continue to forbear from enforcing their rights. In addition, the company will receive access to $20.0 million in additional liquidity to finance new inventory.

Overall, the Canadian-based company, which ranks #29 on the FDMC 300 list of top North American wood-products firms, said its second-quarter revenue was $292.4 million, compared to $348.1 million, a decrease of 16.0% from the same period a year ago. Reported net loss was $44.9 million or $1.38 per diluted share, compared to $59.5 million or $1.83 per diluted share last year. Adjusted net loss1 was $21.1 million or $0.65 per diluted share compared to $13.6 million or $0.42 per diluted share last year.

Revenue for the six months was $612.8 million, compared to $699.1 million, down 12.3% from the prior year. Reported net loss was $70.2 million or $2.15 per diluted share, compared to $77.1 million or $2.37 per diluted share a year ago. Adjusted net loss1 for the six months was $44.8 million or $1.37 per diluted share, compared to $30.5 million or $0.94 per diluted share last year.

"Dorel Juvenile delivered a strong second quarter in 2025, building on the momentum from the start of the year, and overcoming the challenges posed by U.S. tariffs. Our performance was driven by strong growth in Europe and key international markets, disciplined cost control, and favorable foreign exchange movements. Dorel Home experienced a difficult second quarter with tariff uncertainty and liquidity constraints impeding sales. On June 30th, 2025, we announced our expanded restructuring plan and are actively implementing changes to reduce costs and further streamline operations. We remain confident that the benefits of our Home segment transformation will begin to emerge in the fourth quarter of this year, with full impact expected in 2026," stated Dorel President & CEO, Martin Schwartz.

Second quarter revenue for Dorel Home was $74.3 million, a decrease of $57.3 million, or 43.5%, from $131.6 million last year. The company said that the decline was driven primarily by reduced e-commerce gross sales, which declined approximately 51%, and ongoing product availability issues stemming from liquidity constraints and tariff uncertainty. Brick-and-mortar and omni-channel sales accounted for approximately 56% of gross sales in the quarter, up from approximately 49% in the same period last year, reflecting a strategic shift in channel focus. Six-month revenue was $178.9 million, a decrease of $91.1 million, or 33.7%, from $270.0 million last year.

The adjusted operating loss for the quarter was $12.7 million, compared to $8.3 million in the same period last year. The principal cause was lower sales volumes, which more than offset the benefit of a lower cost structure that was part of the initial restructuring program implemented before the June 30th, 2025 announcement of further cost reduction initiatives. Year-to-date adjusted operating loss was $23.9 million versus $11.7 million in the prior year. Despite these pressures, the Home segment generated significant free cash flow in the second quarter, primarily through inventory reductions and improved accounts receivable collections.

In response to these and other challenges, Dorel announced an accelerated restructuring plan on June 30th, 2025, including the decision to cease manufacturing operations at its Cornwall, Ontario facility. It is expected that the wind-down of these operations will be completed by the end of the third quarter of this year to minimize losses and fulfil customer obligations. This decision is part of a broader transition to a leaner organization with a reduced product line, focused on profitable categories. The segment will operate with a reduced footprint and integrate back-office operations into Dorel Juvenile’s infrastructure. The Home segment is actively working on exiting product categories that are now considered non-core, including a plan to significantly reduce inventory by the end of the year, thereby allowing for a smaller distribution footprint. Warehouse consolidation efforts are underway, with Canadian and California operations transitioning into Dorel Juvenile facilities. The Company is also finalizing its East Coast distribution strategy.

During the quarter, the Home segment recorded restructuring costs of $22.4 million, of which $13.2 million was for the non-cash write-down of equipment and inventory. The remaining amount of $9.2 million was for accrued severance costs, the majority of which is to be paid out after the closure of the Cornwall manufacturing operations at the end of the third quarter of this year. The benefits of the Cornwall, Ontario, manufacturing facility closure will begin only in the fourth quarter of this year; however, included in the severance amount were other headcount reductions initiated in May, generating $0.8 million in monthly savings beginning in June 2025.

Outlook

“Despite the challenges of U.S. tariffs, the Juvenile segment is well-positioned relative to competitors based on its worldwide footprint and domestic manufacturing capabilities in the U.S. This was evidenced in the second quarter as reduced earnings in the U.S. were more than offset by improved earnings in our other markets. With our facilities in the U.S., which could present further opportunities going forward, and our strong international business, we expect to continue to improve earnings and remain on track for a better 2025 versus 2024. Dorel Home is entering a pivotal phase in its transformation journey, with the second half of 2025 focused on executing the structural changes initiated this year. We are confident that the actions taken, streamlining operations, integrating with Dorel Juvenile, and transitioning to a more agile distribution model, will position us for a return to profitability in 2026,” said Schwartz.