Mohawk Industries Tops Q4 Profit Estimates, Retail Sentiment Hits Fever Pitch
The flooring company reported adjusted earnings of $1.95 per share for the three months ended Dec. 31, compared with the average analysts’ estimate of $1.85 per share.
Mohawk Industries (MHK) shares edged higher on Friday after the company’s fourth-quarter earnings topped the Wall Street estimate.
According to Koyfin data, the flooring company reported adjusted earnings of $1.95 per share for the three months ended Dec. 31, compared with the average analysts’ estimate of $1.85 per share.
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Its quarterly revenue rose 1% to $2.64 billion, exceeding the Street estimate of $2.54 billion.
Towards the end of last year, central banks in the U.S., Europe, and other regions cut interest rates, but the company said this had little effect on housing turnover in most areas.
“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,” CEO Jeff Lorberbaum said.
The sales impact from U.S. hurricanes was limited to about $10 million, Lorberbaum added.
In its Global Ceramic Segment, net sales increased 1.5%, impacted by unfavorable pricing and mix and partially offset by productivity gains.
The company said it implemented many cost-containment initiatives, including reengineering products, improving processes, and rationalizing higher-cost operations.
Flooring Rest of the World segment’s net sales decreased by 2.1%, Mohawk said. The company said its operating margin in the segment also reduced due to lower prices and rising material and labor costs.
However, the North America flooring segment's net sales grew by 2.8%.
“We expect ongoing softness in all our markets during the first quarter due to elevated interest rates and weakness in housing,” the company said.
The company said that due to errors in the new order management system in its Flooring North America Segment, its first-quarter earnings would take a hit between $25 million and $30 million in lost sales and other costs.
It also forecast first-quarter adjusted earnings per share between $1.34 and $1.44.
Retail sentiment on Stocktwits rose further into ‘extremely bullish’ (96/100) territory than a day ago, while retail chatter remained ‘high.’
Over the past year, Mohawk stock has fallen nearly 27%.
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