The Dixie Group reported net sales of $74 million, down 11.6%, for the second quarter of 2023 ending July 1, 2023, as compared to $83.7 million in the same quarter of 2022. The company recorded a net loss of $1.62 million for the quarter compared to a net loss of $4.02 million for the same period in 2022.
Gross profit margin for the quarter was 26.7% of net sales compared to 19.2% in the second quarter of 2022.
For the first half of the year, net sales from continuing operations were $141.09 million, a 12.5% decrease from sales of $161.27 million in the first six months of 2023. The net loss for the first half was $3.17 million compared to a net loss of $7.36 million in the first six months of the prior year.
Dixie Group Chairman and CEO Daniel K. Frierson said second-quarter results continued to show the positive impact of the plant consolidation and cost reductions the company started in 2022.
"Our gross margins were strong as our manufacturing plants continue to operate at levels of high efficiency despite the lower year-over-year sales volume. A significant factor in the year over year sales decline was a loss of volume in the mass merchant channel, with our primary customer's strategy shifting toward lower price points. Excluding our mass merchant sales, net sales were down 9.1% over the prior year quarter. This decline in sales was primarily the continued result of high inflation and increased interest rates impacting consumer confidence and demand in the second quarter of 2023. For the first half of 2023, we have experienced higher selling expenses driven by samples and marketing investment for new product offerings, particularly in our new decorative line and the growing hard surface flooring market. The majority of the benefit of this current year expense will be reflected in sales in future periods."
The company launched 11 new products in our synthetic soft surface lines. This included four new styles in DH Floors collection made with DuraSilk solution dyed polyester, three new nylon products in Masland Energy main street commercial group and four new EnVision nylon styles in the company's high-end residential Masland and Fabrica brands
The higher-end decorative brands launched 23 new introductions. This includes eight new styles in Décor by Fabrica, six in 1866 by Masland, and nine in the company's new 1866 All Seasons Collection. Made with UV-treated fiber, which will not degrade from sunlight or weather, and available with a special exterior backing, these styles are especially suited for the growing trend of outdoor living spaces.
In the hard surface lines, the company introduced two new collections in Trucor Bravo and Trucor Tymbr Select. Tymbr Select is the company's second collection in the laminate segment and provides beautiful visuals and colors with an AC4 durability rating.
