Global flooring manufacturer Mohawk Industries, Inc. has reported a decline in third quarter sales.
According to its latest trading update for Q3 2024, total sales fell 1.7% to $2.71bn from $2.76bn in 2023. Net earnings resulted at $162m, up from a loss of $760.3m.
Commenting on the Company’s third quarter results, Chairman and CEO Jeff Lorberbaum stated: “We delivered a solid performance in soft market conditions, which reflects the positive impact of our sales initiatives, productivity and restructuring actions as well as lower input costs, partially offset by pricing and mix pressure.
“Due to our increased earnings and management of working capital, we generated free cash flow of $204 million in the quarter, for a total of $443 million year to date. This year, we are investing approximately $450 million in capital projects focused on growth, reducing costs and asset maintenance.
“In all our regions, market conditions were slower than anticipated given high interest rates, lingering inflation and lower consumer confidence. During the quarter, our sales initiatives delivered volume gains in many product categories, offset by pricing pressures and negative mix. Though the commercial channel has lost some momentum as the year progressed, it continued to outperform residential.
“In our markets, central banks are shifting from a restrictive policy to a more balanced approach to stimulate their economies, which should benefit our industry as consumer and business spending expands. We expect that recent interest rate cuts in the U.S., Europe and Latin America will strengthen housing markets and increase flooring sales next year.
“We remain focused on managing the controllable aspects of our business to enhance our results. With gross margins under pressure from weaker industry demand, all of our businesses are implementing strategies to maximize volumes and plant utilization. To increase sales, we are launching innovative new products, marketing initiatives and promotional activities.
“We are enhancing productivity and exercising disciplined cost management in all aspects of the business. We are executing the restructuring initiatives that we announced last quarter, which are expected to yield more than $100 million of annualized savings. These actions include rationalizing inefficient assets, streamlining distribution, and reducing administrative costs. These projects will continue throughout next year to achieve our planned savings.”
