Mohawk Q4 2020 Earnings Report
Key Takeaways
Mohawk Industries reported a strong fourth quarter with net sales of $2.6 billion, a 9.0% increase, and EPS of $3.49. The results exceeded expectations due to strengthening residential purchases and restructuring initiatives, though commercial activity remained weak.
Q4 net sales increased by 9.0% as reported and 5.5% on a constant currency and days basis.
Net profit for Q4 was $248 million, with diluted EPS of $3.49.
Adjusted net earnings were $252 million, with EPS of $3.54, excluding restructuring, acquisition, and other charges.
Free cash flow for the period was approximately $250 million after capital investments of approximately $160 million.
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Mohawk Revenue by Segment
Forward Guidance
Assuming current conditions continue, Mohawk anticipates its first quarter adjusted EPS to be $2.69 to $2.79, excluding restructuring charges.
Positive Outlook
- Momentum of residential businesses should remain strong.
- Commercial channel should slowly improve from its trough.
- Benefit from structural improvements in costs.
- Innovative new products will enhance mix.
- Continued government subsidies and low interest rates should support economic recoveries, new home construction and residential remodeling.
Challenges Ahead
- Operations are taking actions to optimize throughput and reach desired service levels.
- Plants fell short of the inventory build anticipated.
- Most of the Covid restrictions around the world have not directly impacted the sales or installation of our products.
- Seeing increasing inflation in most of product categories.
- Raising prices in response to inflation.
Revenue & Expenses
Visualization of income flow from segment revenue to net income