MONTREAL – Canadian home furniture supplier Dorel Inds. reported a $3.8 million loss for the fourth quarter, marking its 10th consecutive quarterly decline and two straight years of losses. Fourth quarter revenue was $350.7 million, up 3.1% from a year ago.
Despite the loss however, the company’s trajectory continues to be positive, with losses shrinking each quarter. Last quarter, it posted a $10.4 million loss. The two quarters before that, it lost $16.7 million and $31.5 million. In Dorel Juvenile, the company’s largest segment, it reported a second consecutive profit.
“Dorel Juvenile continued its trend of quarter-over-quarter earnings improvement in 2023 and delivered its best quarterly adjusted operating profit since the first quarter of 2017,” said Martin Schwartz, CEO. “We are gaining market share in our major markets and for the year, revenues grew 2.4% vs. the prior year with an adjusted earnings turnaround of almost $59 million. We are well on our way to getting Juvenile back on a solid footing.”
Juvenile revenue was $212 million, up 12.2% from last year. U.S. and European markets both posted double-digit revenue increases. The company highlighted successful sales of its new Maxi-Cosi 360 family car seat in Europe and its Safety 1st Grow and Go 3-in-1 convertible car seat in North America. Full year revenue for the segment increased to $829.8 million, up 2.4% from the prior year.
In the company’s home furniture segment, revenue for the quarter came in at $138.6 million, down 8.4% and showing an operating loss of $12.8 million. For the full year, revenue was $559 million, down 26.5%.
“The current high inflation and interest environment continued to constrain consumer spending on home furnishings, contributing to the revenue decline,” Schwartz said.
Total revenue for the full year was $1.39 billion, down 11.6% from 2022. The loss for the year was $62.4 million.
Outlook
“We expect our Juvenile segment to continue on its path to improved earnings,” Schwartz said. “Our strong portfolio of new innovative products, market share gains, excellence in e-commerce and strong retail relationships provide the confidence that we are well-poised for full year operating profit to improve over 2023. It should be noted that the seasonality of our business means that our first quarter, while substantially better than the prior year comparison, will not match 2023’s strong fourth quarter performance.
“At Dorel Home there is continuing traction at brick-and-mortar as our focus on that channel is paying off, and we expect continued improvement. Offsetting this are challenges at e-commerce that are common across the industry, and this is dampening sales overall,” he added. “We remain convinced we are on the path to a turnaround and expect improvements in 2024, but to a great extent this depends on the overall furniture industry health. We will continue to seek lower costs through our restructuring plan and coupled with innovative new product makes us confident we will deliver the turnaround as we did in Juvenile in 2023.”