Global flooring manufacturer Mohawk Industries, Inc. has reported a growth in fourth quarter sales while full year revenues were down.
According to its latest Q4 trading update, net sales were $2.6bn, an increase of 1% versus the prior year. Fourth quarter 2024 net earnings were $93m down from $139.4m.
For the year ended 31 December 2024, total sales fell 2.7% to $10.8bn from $11.1bn in 2023. Net earnings stood at $517.7m, improving from a loss of $439.5m.
Commenting on the Company’s fourth quarter and full year, Chairman and CEO Jeff Lorberbaum stated: “Our fourth quarter results exceeded our expectations as sales actions, restructuring initiatives and productivity improvements benefited our performance.
“Additionally, the negative sales impact from U.S. hurricanes was limited to approximately $10 million. While residential demand remained soft in our markets, our product introductions last year and our marketing initiatives contributed to our sales performance around the globe.
“The fourth quarter environment was an extension of conditions our industry faced throughout last year. Consumers continued to limit large discretionary purchases, and consumer confidence remained constrained by cumulative inflation, economic uncertainty and geopolitical tensions. During 2024, home sales around the world stayed suppressed, U.S. homeowners remained locked in place with low mortgage rates, and existing U.S. home sales fell to a 30-year low.
“Central banks in the U.S., Europe and other regions lowered interest rates during the later part of last year, though the impact on housing turnover was negligible in most regions. New home construction was also constrained across the world, with higher home costs and interest rates impacting starts. Throughout the year, investments in the commercial sector slowed, though they remained stronger than residential remodelling.
“These factors reduced market demand and created heightened industry competition for volume. This also resulted in greater unabsorbed overhead and temporary shutdown costs as we managed production and inventory. Given these conditions, we focused on stimulating sales with innovative new products, marketing actions and promotional programs.
“Last year, we initiated significant restructuring actions and operational improvements that are lowering our costs and will benefit our longer-term results. Through these actions, we delivered an increase of approximately 6% in full-year adjusted earnings per share despite a soft market. We ended the year with available liquidity of approximately $1.6 billion and debt leverage of 1.1 times. We are well positioned to manage this market cycle, pursue opportunities for long-term profitable growth and emerge stronger when housing markets improve.
“Our industry has been in a cyclical downturn for multiple years, and we are confident that our markets will return to historical levels, though the inflection point remains unpredictable. We expect ongoing softness in all our markets during the first quarter due to elevated interest rates and weakness in housing.
“Intense competition for volume will continue to pressure our pricing, though our mix should benefit from our differentiated products launched last year, premium collections and our commercial offering. Increased material and labour costs will reduce our margins in the quarter, as we can only partially pass through the higher costs to the market. Our businesses are finding additional ways to reduce expenses and improve processes, which will help to reduce the impact of higher input costs.”
