BUSINESS

Dorel Industries says poor weather put a damper on Q1 revenue; earnings

05/09/2013 12:14 EDT | Updated 07/09/2013 05:12 EDT
MONTREAL - Dorel Industries Inc. (TSX:DII.B) says poor weather in North America and Europe helped put a damper on what was already expected to be a soft first quarter.

The manufacturer of infant car seats, bicycles and furniture said Thursday revenue fell 4.3 per cent in its most recent period to US$594.2 million from US$621.1 million in the same 2012 period.

Net profits fell 23.2 per cent to US$22.3 million or 70 cents per diluted share from US$29.1 million or 90 cents in the year-earlier period.

President and CEO Martin Schwartz said the company's forecast of a weaker quarter for its recreation and leisure products segment had been compounded by "exceptionally poor weather in both North America and Europe."

"Below normal temperatures and persistent rain and snow resulted in a 25 per cent decrease in U.S. bicycle industry sales in March compared with last year" and down 30 per cent in the independent bicycle dealers channel.

"This was in stark contrast to a year ago when abnormally mild weather in March drove higher . . . levels at retail. We remain confident that the decline is a timing issue and still expect the full- year earnings to exceed last year."

Operating profit in the Dorel's juvenile segment was also lower than last year, Schwartz said, citing challenges in the economy generally and lower consumer confidence in more mature markets.

However, Latin America as a whole produced increased profits as Dorel Chile's revenues grew substantially and Dorel Brazil had its best operating results since 2010.

Meanwhile, home furnishings had one of its best quarters since 2011 as the continued growth in on-line sales helped deliver a substantial increase in earnings.