Q1FY18 sales of Dixie Group up 1.4%

07 May '18

3 min read

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Dixie Group, a leading marketer and manufacturer of carpet and rugs, has posted net sales of $98,858,000 as compared to $97,541,000 in 2017, up 1.4 per cent. The company had a loss from continuing operations of $2,884,000 or $0.18 per diluted share for the first quarter of 2018 as compared to a loss of $575,000 or $0.04 per diluted share in Q1 2017.

The gross profit for first quarter of 2018 was 21.8 per cent of net sales as compared to a gross profit of 25.8 per cent in 2017. During the first quarter of 2018, the sales and costs were negatively impacted by severe weather which affected several of our east coast facilities in January. In addition, the launch of numerous, new, difficult to manufacture residential products severely impacted the throughput of manufacturing operations in January and February, resulting in unabsorbed fixed costs. The selling and administrative expenses for the quarter were 23.4 per cent of net sales. The decrease in the costs is primarily due to the Profit Improvement Plan initiated in the fourth quarter of last year.

"Our residential sales were up 7.3 per cent for the quarter with the industry, we estimate, being flat as compared to the prior year. Our residential sales had solid growth with all three brands showing high single digit improvement during the quarter. Residential sales benefited from the successful launch of our Stainmaster PetProtect luxury vinyl flooring line by our Masland and Dixie Home brands," Daniel K Frierson, chairman and chief executive officer, said.

The company launched over 150 new products for 2018, including 67 carpet styles and 86 hard surface designs. It is in the process of launching its Fabrica wood product line in the southeast United Sates with a selective set of dealers. It looks forward to expanding this specialty wood line in the future.

"In 2018, we are continuing to work on achieving all of the benefits of the new capabilities we have implemented in the past year in both our commercial and residential oriented facilities as we focus on better on time execution, lower waste and higher production efficiencies. One area of particular difficulty in 2018 has been the attraction and retention of talent in our various facilities. We anticipate further cost increases relative to associate costs as we deal with a tight labor market. We implemented a price increase at the beginning of the year and have announced a second price increase for May of 2018 to offset higher labour and other operational costs," concluded Frierson. (RR)

Fibre2Fashion News Desk – India

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