Dorel Q2 profit doubles to US$22.2 million despite ongoing challenges
Dorel says strong bike demand propelled its sports segment to its ninth consecutive quarter of revenue growth.
Dorel Industries Inc. missed expectations even though its net profit doubled in its latest quarter despite higher transportation costs and supplier closures.
The company, which keeps its books in U.S. dollars, says it earned US$22.2 million or 67 cents per diluted share in the second quarter, up from US$11.1 million or 34 cents per share a year earlier.
On an adjusted basis, its net income increased 47 per cent to US$23 million or 70 cents per diluted share, from US$15.6 million or 48 cents per share in the second quarter of 2020.
The Montreal-based company, which makes home goods, sporting goods and products for young children, says revenue for the three months ended June 30 was US$765 million, up 5.7 per cent from US$724 million in the prior year period.
Dorel says strong bike demand propelled its sports segment to its ninth consecutive quarter of revenue growth while juvenile revenue and operating profits improved and home furnishings were impacted by substantial freight costs and COVID-related supplier closures in Vietnam and Malaysia.
Dorel was expected to earn 82 cents per share in net and adjusted profits on US$860.6 million in revenues, according to financial data firm Refinitiv.
“Given the continuing chaotic supply chain environment, we are very pleased with the second quarter performance of our businesses,” stated CEO Martin Schwartz.
“We are reporting substantially improved earnings while dealing with record increases in container freight rates and higher product costs in many categories. Demand for our products remained robust, but we were not able to fully satisfy consumer needs due to inventory shortages from a lack of ocean container availability.”