Dal-Tile sales were down 12% in the quarter compared to last year reflecting a slower commercial environment along with a continued decline in residential. Margins were impacted by a declining product mix and lower production levels creating unabsorbed overhead in the fourth quarter. We shut down several high cost production lines and moved the products to more efficient operations.
We have executed many cost reductions including reduced sales, manufacturing and distribution staffing, lower alternative materials and improved transportation. Inventory levels were balanced with declining sales and should decrease as we go forward. Warehousing at the plants has been increased to ship more directly and reduce overall distribution expenses. We are increasing our penetration of the Mexican market with broader product offerings and increased distribution.
The Unilin sales during the quarter were down 26%, as reported, or 20% on a constant exchange rate basis. All products in both Europe and the U.S. declined from the prior year as the contraction in the global economy became more severe and our customers reduced inventory levels to align with demand. The Spanish and the U.K. markets were impacted most as home sales slowed while Eastern Europe and Russia continued to be less affected.
Laminate flooring sales fell in both the U.S. and Europe resulting from a significant pullback in residential spending. Production schedules have been reduced and older equipment in the U.S. has been shut down. Cost reductions have been implemented including staff reductions, temporary shut downs, product and process reengineering, and freight optimization. Our roofing systems sales began to reflect the decline in the economy. Continuing the prior trends, our European board sales remain under both volume and pricing pressure which is forcing high cost industry capacity to be closed."
The current environment is expected to remain challenging for the near term. We believe sales volume will continue to decline in the first quarter. The affect of lower carpet materials will not be realized until the second quarter. Carpet price increases did not cover the peak material increases which remained high into the fourth quarter. During the fourth quarter as sales declined, we significantly reduced inventory by curtailing production and material purchases leaving a larger proportion of higher cost inventory at year end.
In the first quarter, the Mohawk segment is forecasted to have an operating loss resulting from the $60 million flow through of peak FIFO costs. Both our Dal-Tile and Unilin segments will continue to be impacted by the recession and lower consumer spending resulting in lower production volumes and a declining product mix. Based on these factors, our EPS guidance for the first quarter is a loss of $.80 to $.89 per share.
We will remain focused on managing our balance sheet and maximizing our cash generation across our businesses. We will continue to reduce infrastructure, capital expenditures, working capital and controllable costs. In the second quarter, margins will be positively impacted after the peak inventory costs flow through the first quarter and we have seasonal improvement in volume. Our industry has excellent long-term potential with demographics which will ultimately lead to continued growth when the economic recovery begins. As the largest floorcovering manufacturing company in the world, we have an industry leading position in each of our major floorcovering product categories. We remain positive about the long-term prospects for our company.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
