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Jun 27, 2020
Mohawk Q2 2020 Earnings Report
Mohawk Industries announced a net loss of $48 million and a diluted loss per share of $0.68 for Q2 2020. Net sales were $2.0 billion, a decrease of 21% as reported and 19% on a constant currency basis.
Key Takeaways
Mohawk Industries reported a net loss of $48 million, or $0.68 per share, for the second quarter of 2020. Adjusted EPS was $0.37. Net sales for the quarter were $2.0 billion, down 21% as reported and 19% on a constant currency basis.
Sales trends improved significantly after government restrictions were lifted.
Markets improved more than expected after sales bottomed in April.
Shipments exceeded production rates, reducing inventories.
The company is restructuring to enhance results and future performance, anticipating annual savings of approximately $110 to $120 million.
Mohawk
Mohawk
Mohawk Revenue by Segment
Revenue by Segment
Global Ceramic Revenue
CapyFin.comFlooring North America Revenue
CapyFin.comFlooring Rest of World Revenue
CapyFin.com Forward Guidance
Sales in July were approximately flat compared to prior year, but the company cannot predict how the sales will evolve going forward. Given this, the company is unable to provide guidance for the third quarter, though they anticipate a significant improvement in results from the second quarter.
Positive Outlook
- The business is well positioned with a strong balance sheet and deep liquidity.
- Generated free cash flow of almost $500 million during the second quarter.
- Issued over $1 billion of new bonds.
- Taking the right steps to manage through the pandemic.
- Remain focused on delivering innovative products, exceptional value and superior service to maximize results.
Challenges Ahead
- Much uncertainty remains around all of the markets regarding government policies, business confidence and consumer spending.
- Some areas, particularly the U.S., Brazil and Russia, are experiencing an increasing level of Covid cases, which are impacting operational costs and production levels.
- The commercial sector continues to be challenged, as many businesses are postponing new investments.
- Potential changes in government policies, consumer and business spending and higher Covid infection rates could reduce demand around the world, particularly if governments increase restrictions.
- Visibility into the future continues to be uncertain due to the persistent Covid spread and the unknown strength of the economic recovery.
Revenue & Expenses
Visualization of income flow from segment revenue to net income