Sales Continue to Improve at Dorel Sports
MONTREAL, Canada – Dorel Sports including Cycling Sports Group (Cannondale, GT, Mongoose among other brands as well as Pacific Cycle and Caloi) showed a strong third quarter performance with revenues increasing by approximately 9.6 percent after removing the impact of varying foreign exchange rates year-over-year. It comes after a much better second quarter than anticipated. Revenues for the nine months of 2018 increased by approximately 3.2 percent.
For the nine months, Dorel Industries’ total revenue increased by 1.9 percent to USD 1,936.0 million. It resulted in an operating profit of USD 19.4 million compared to USD 81.4 million in 2017.
Revenue of Dorel Sports for the nine months of 2018 increased by USD 21.7 million, or 3.5 percent, to USD 650.3 million and by approximately 3.2 percent after removing the impact of varying foreign exchange rates year-over-year. Organic revenue increased by approximately 11.8 percent for the quarter and by approximately 3.9 percent year-to-date when removing foreign exchange fluctuations and the divestment of the performance apparel line of business (SUGOI) in the second quarter of 2018.
Dorel Sports’ divisions
The Dorel Industries’ financial report on the three quarters of 2018 says that all Dorel Sports’ divisions have contributed to the organic revenue increase. It also states “The U.S. independent bike dealers channel had a solid third quarter finish on the heels of strong momentum created at the annual August sales meeting as dealers responded positively to the brand strategy outlined.
“Pacific Cycle experienced a third quarter double-digit revenue increase driven by the retailers building inventory in advance of the busy holiday season. Other drivers of the Pacific Cycle growth included improved parts and accessories shipments, continued growth in Mongoose scooter sales and strong sales of battery powered ride-ons including the new innovative interactive Rideamals.”
Strong organic revenue growth
On Dorel Sports’ financial results it is further explained “Additional ride-ons introductions offset the earlier loss of the Toys“R”Us U.S. business. Caloi posted strong organic revenue growth in the quarter, although it declined in reported currency due to unfavourable foreign exchange. This organic revenue growth was driven by price increases implemented to offset rising inflationary costs and new product innovation. These explanations for the third quarter on the increased revenue are also valid for the year-to-date figures.”
The financial report also points to a decline in third quarter gross profit “The primary drivers of the margin compression were increased input costs at Pacific Cycle, discounting at Cycling Sports Group with the arrival of the 2019 model year inventory, increased material costs related to the weakened Brazilian Real at Caloi combined with a less favourable sales mix at all divisions.”