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Dec 31, 2022
Mohawk Q4 2022 Earnings Report
Mohawk Industries reported a decrease in net sales and earnings per share (EPS) for the fourth quarter of 2022, impacted by declining residential flooring sales and customer inventory reductions.
Key Takeaways
Mohawk Industries reported Q4 2022 results with net sales of $2.7 billion, a decrease of 4.0% as reported. Net earnings were $33 million, and diluted EPS was $0.52. The company faced challenges from rising interest rates, inflation, and lower consumer confidence, leading to decreased flooring volumes and scaled-back production.
Net sales decreased by 4.0% as reported, or 1.3% on a constant currency and days basis.
Net earnings were $33 million, with a diluted EPS of $0.52.
Adjusted EPS was $1.32, excluding restructuring, acquisition and other charges.
The company is implementing restructuring actions and reducing capital expenditures to manage current market conditions.
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
For the first quarter of 2023, Mohawk anticipates more pressure on pricing and mix due to low industry volumes and expects adjusted EPS to be between $1.24 and $1.34, excluding any restructuring, acquisition and other charges.
Positive Outlook
- Cost of energy has fallen and should benefit global margins as inventory turns.
- Second quarter results should have sequentially stronger improvement, with seasonally higher sales, increased production and lower material costs.
- Significantly lower energy costs in Europe should enhance consumer spending, discretionary purchases and flooring demand.
- Refocusing sales teams on better-performing channels.
- Introducing innovative new collections and merchandising as well as utilizing targeted promotions to improve sales.
Challenges Ahead
- Anticipate more pressure on pricing and mix due to low industry volumes.
- Inventory costs remain elevated in most product categories due to the higher material and energy costs incurred in earlier periods.
- Will not raise production as normal in the first quarter to prepare for future demand, increasing unabsorbed costs.
- Flooring industry is slowing due to higher interest rates, sustained inflation and low consumer confidence.
- Visibility of the depth and duration of this cycle is limited, and conditions differ across the world.
Revenue & Expenses
Visualization of income flow from segment revenue to net income