MONTREAL - Online home furnishing sales were a bright spot in the second quarter for Dorel Industries Inc. (TSX: DII.B, DII.A), a diversified supplier of furniture, sports equipment and juvenile goods. Dorel also makes free-standing storage cabinetry and wine rack cabinets sold through big box retailers.
Overall, however, revenue fell 5.2% to US$600.5 million, down from US$633.7 million for the same quarter last year. Dorel's home furnishings segment, representing 14% of overall revenue, fell 6.4% to US$118.8 million.
CEO Martin Schwartz said the drop was a result of a late spring, affecting the bicycle segment of the company's business. The company wholesales Cannondale, Schwinn and other bicycles, and children's car seats and cribs, in addition to furniture and home storage cupboards - mostly sold through retailers like Sears, Cosco, Meijers, and Sam's Club.
"Discounting, combined with foreign exchange losses and one-time severance costs significantly affected the segment's second quarter profits," explained Dorel President and .
"While there was a slight decline in Home Furnishings' sales to the in-store channel, the segment had another solid quarter registering improved earnings, as sales to its e-commerce customers continue to grow significantly," said Schwartz in announcing earnings last week.
Dorel reports its home furnishings revenue decrease was mostly in imported upholstered furniture and domestic ready-to-assemble furniture. A drop ship vendor program helped drive significant growth in on-line sales, where products offered on-line has been expanded for delivery throughout North America.
Home Furnishings Segment
| Second Quarters Ended June 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 118,863 | 127,019 | (6.4%) | ||
| Gross profit | 17,145 | 14.4% | 16,574 | 13.0% | 3.4% |
| Operating profit | 7,201 | 6.1% | 6,694 | 5.3% | 7.6% |
| Six Months Ended June 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 254,284 | 257,702 | (1.3%) | ||
| Gross profit | 35,225 | 13.9% | 32,304 | 12.5% | 9.0% |
| Operating profit | 15,149 | 6.0% | 12,485 | 4.8% | 21.3% |
Dorel has annual sales of US$2.5 billion and employs 5,400 people in facilities located in twenty-four countries worldwide.
Have something to say? Share your thoughts with us in the comments below.