MONTREAL — With revenue up 5.4% for the first quarter ended March 31, Dorel Inds. still reported a net loss in the period.
Revenue was $351.1 million, up from $333.2 million a year ago. The net loss for the first quarter was $17.6 million, or 54 cents per diluted share, compared with $31.5 million, 97 cents per diluted share, last year. The company has now reported two straight years of losses and 11 consecutive quarterly declines.
In the earnings release, Dorel President and CEO Martin Schwartz broke it down by segments.
Looking at the Dorel Home segment, Schwartz said it made what he termed “substantial progress” in Q1, narrowing its adjusted operating loss.
“This was despite on-going softness in the furniture market, where industry sales continue to lag all other consumer product categories,” he noted. “The previously announced plan to simplify and combine certain key areas of the Home segment has made the combined operations more effective and cost efficient. Savings are expected to be $4 million annually. Home is making all the right moves with new customers and new product listings growing. The meaningful benefits will come once industry volumes increase to more traditional levels.”
Dorel Home revenue was $138.4 million for the period, up 3.9% from $133.2 million last year. The segment showed an operating loss of $3.6 million, compared with a operating loss of $13.9 million last year.
In the earnings release, the company noted that “attendance was excellent” for Dorel at the recent High Point Market, with enthusiasm for the segment’s new product lineup.
Dorel referenced its restructuring plan, initiated in the fourth quarter of 2023, for having improved efficiencies and reduced operating costs. Inventories were down $27.8 million from the period year’s period.
In its outlook for the Dorel Home segment, Schwartz said, “The traction at brick-and-mortar experience in first quarter is expected to continue. … However, given the sales cycle process is naturally longer at brick-and-mortar vs. e-commerce, we will only see the benefits of our success in that channel during the second half of the year.”
He added that Dorel Home will continue to focus on cost reduction and “re-igniting” the e-commerce business.
Schwartz also noted that the Dorel Juvenile segment posted what he called significant gains year over year, with adjusted operating profit improving by $10.1 million over the year ago period.
“Internal optimism is high as the segment is capitalizing on its introduction of a diverse selection of exciting new products,” Schwartz said. “Both our retail partners and consumers have reacted well to the new offerings, with in store sales rebounding nicely, driving growth through market share gains. Through a combination of higher sales and by further reducing Juvenile costs we are more comfortable than ever that this business will continue its year-over-year earnings improvement.”
In the company’s outlook for Dorel Juvenile, Schwartz said it expects an increase in sales vs. the first quarter, further enhancing “our current improving revenue line.” He added that the company expects the second half to be better than the first.