Mohawk Industries sets new records

The US group reported first-half sales of $5.6 billion (up 30% on 2020). The Global Ceramic Segment posted 23% sales growth to almost $2 billion.

Mohawk Industries is continuing its excellent performance. After a record-breaking first quarter of 2021 (sales of $2.67 billion, up 16.8% on 2020 and net earnings of $237 million), the company celebrated even better results in Q2. Net sales for the second quarter of 2021 were $3.0 billion, up 44% as reported and 38% on a constant currency and days basis, while net earnings reached $336 million.

As a result of this sustained growth, the US flooring group posted net sales of $5.6 billion for the first half of 2021 (up 30% versus 2020) and net earnings of $573 million compared to the $62 million of the equivalent period in 2020.

“In the quarter, we generated the highest quarterly sales of any period in our company’s history. Our second quarter results were significantly stronger than we had anticipated across all our businesses, and our operating margin expanded to its highest level in the last four years. The actions we have taken to simplify our product offering, enhance our productivity and restructure our costs are benefiting our results,” commented Jeffrey S. Lorberbaum, Chairman and CEO of Mohawk Industries.

During the second quarter, most Mohawk manufacturing units ran near capacity or were limited by material supply and labour availability. The group companies are responding to rising material, energy and transportation costs by increasing product prices and optimizing manufacturing and logistics.

All of the group's Business Units grew substantially at a global level, capitalising on the strong growth in the real estate market and building renovations in both the housing and commercial segments. Due to higher demand, inventory levels remain low and the group has “approved new capital investments of approximately $650 million to increase our production with most taking 12 to 18 months to implement”, said Lorberbaum.

Between April and June, the Flooring Rest of the World and Flooring North America segments (which produce and sell carpets, laminate, wood, stone and vinyl) reported respectively 68% and 35% increases in sales compared to the second quarter of 2020.

The Global Ceramic Segment also reported excellent results. Quarterly sales reached $1,039.5 million (up 38% on 2020), bringing net sales for the first six months of the year to almost $2 billion ($1,969.4 million, up 23% on H1 2020), accounting for 35% of consolidated group sales.

All ceramic segment operations reported an increase in sales in both the residential and commercial channels. The U.S. ceramic business is strengthening, and the product mix is being improved with new shapes, sizes and surface structures, while bathroom and kitchen countertop sales are growing steadily. The ceramic businesses in Mexico and Brazil continue to be very strong with residential business in both regions at historically high levels. However, they continue to be limited by capacity constraints, a problem that Mohawk has addressed by initiating new investments.

The group’s European ceramic business delivered strong sales and profitability thanks to greater productivity, an improved product mix and higher prices. Here too, the group has initiated expansion projects aimed at supporting sales of high-end collections (premium slabs, small sizes, outdoor and antibacterial collections) and due for completion in 2022.

In response to continued sales growth in Russia, particularly in new construction projects and direct sales to customers through the 370 Kerama-Marazzi stores, the group has initiated expansion plans that are expected to be completed in the second half of next year.

"In the third period, we expect our strong sales to continue, with typical seasonal slowing from the second quarter,” said Lorberbaum. “Longer term, housing sales and remodeling are expected to remain at a high level as rent deferment expires and investments in commercial projects continue to strengthen. We are expanding our operations and introducing new innovations to maximize our results. Our balance sheet is strong, and we are exploring additional internal and acquisition opportunities.”

Half-year results of Mohawk Industries' Business Units