Mohawk Industries reported that third-quarter soft surface sales outpaced hard surface and the company is assertively growing capacity to expand business in several categories, according to a recent earnings call.
“The hurricanes in Texas and Florida interrupted normal purchasing patterns and impacted our sales during the period,” said Jeff Lorberbaum, chairman and CEO, Mohawk industries. “For the quarter, our soft surfaces sales growth exceeded hard surfaces, which were constrained by production limitations that will be addressed in the fourth quarter. Growth in our residential carpet outpaced our commercial sales. We have recently announced a 5 to 6% price increase on all of our carpet products effective the end of this year to cover our increasing costs.”
Chris Wellborn, president and COO, said the company’s SmartStrand collections continued to take market share, expanding Mohawk’s presence in the premium market.
“Presently, our new smart SmartStrand Reserve and Airo introductions are being installed in leading retail stores around the country,” said Wellborn. “Each of these collections offers a unique differentiating proposition to the consumer. We are increasing the distribution of our luxury care stand brand which provides leading style and design in premium carpet.”
The company reported it is broadening its offering at mid-price points to provide more sterilized options and increase its share in the market. “With new product collections and the expansion of our sales force, we are increasing the non-specified sales of our commercial collections in the retail channel,” said Wellborn.
Jeff Lorberbaum, Mohawk CEO, said capital expenditures of last year and this year would add about 1.4 billion of new capacity to the company’s existing businesses. In the U.S., Mohawk is expanding laminate, wood, rugs, carpet production and getting into rigid luxury vinyl tile (LVT) and quartz countertops. Ceramics production is expanding in four countries and laminate is expanding in Europe and Russia.
“All these investments should help us drive the growth depending upon which one they are; if we are going into new categories and businesses the growth, that fill up will take longer than the ones that were already in the market with existing infrastructure,” Lorberbaum said.
The company has enhanced the productivity of its U.S. LVT operations and it is expanding its product offering in both residential and commercial categories.
“We introduced a proprietary rigid LVT collection designed for exceptional stability and durability as we prepare for new U.S. LVT production in the second quarter of next year,” Wellborn said. “We anticipate that the LVT market will continue to grow at high rates for the foreseeable future. And next year's capacity expansion will extend our position as the largest domestic manufacturer in the category.”
For more information, visit mohawkind.com.
