Dorel Delivers Strong Showing in Third Quarter
MONTREAL, Canada – Dorel’s recreational/leisure division, which includes Cannondale, Schwinn, GT, Mongoose, IronHorse, and Sugoi brands, reported a 9.1% increase in the 2012 third quarter sales compared to 2011.
The total revenue of the recreational/leisure segment amounted € 174.9 million and the gross profit € 43.5 million accounting for 24.2% of revenue and 5.5% of operating profit (€ 9.8 million). Total revenues for the quarter, including the Home Furnishings and Juvenile segments, reached € 482.1 million, an increase of € 29.5 million (6.5%) compared to 2011.
“Our core businesses are moving in the right direction despite a difficult economy,” said Dorel President and CEO Martin Schwartz. “Our operating profits increased significantly in our Juvenile segment thanks largely to tangible progress at Dorel Juvenile Group (DJG) USA and a solid performance at Dorel Europe, despite a year-over-year drop in the value of the Euro. Dorel Chile once again was an important contributor to the quarter, underlining the value of the partnership we established there almost a year ago. Recreational/Leisure did well, particularly in the mass merchant channel.”
While Recreational/Leisure’s 9.1% increase was driven primarily by shipments to the mass-market channel, both the IBD and mass-market channels have increased sales for the year-to-date. Excluding the impact of foreign exchange variations on the segment’s non-US based businesses, the segment’s organic revenue increase was approximately 11% for the quarter and 8% year-to-date.
Sugoi lost € 1.7 million
Operating profit improved € 1.97 million, or 25%, to € 9.8 million. For the nine months, operating profit was up € 5 million or 13.1%, to € 43.6 million. Notably, Dorel’s woes with its Sugoi cycling apparel division appear to be coming to an end. Sugoi lost € 1.7 million during the third quarter last year, but this year sits in a break-even situation for this most recent quarter.
While the world economy is a hot topic among pessimists of late, Schwartz remains positive about his company’s fortunes. “The total year-to-date operating profit of our three segments has increased by € 11.95 million or 13.4% versus the prior year. We expect this positive trend to continue through the rest of 2012, led by revenue and earnings growth in Juvenile and Recreational / Leisure.