Mohawk Industries reported net sales for the second quarter of 2024 were $2.8 billion, a decrease of 5.1% compared net sales of $3.0 billion for the second quarter of 2023. The company reported second-quarter 2024 net earnings increased 55% to $157 million compared to net earnings of $101 million for the same period last year.
"Our second quarter results exceeded our expectations despite soft market conditions around the globe," said Mohawk Chairman and CEO Jeff Lorberbaum. "The commercial channel continues to outperform residential, although some softness in the category is occurring. While the long-term demand for our products is strong, residential purchases across our geographies remain weak. During the quarter, the actions we have taken improved volumes in many product categories, though the gains were offset by consumers trading down and competitive pricing. Residential remodeling is under the greatest pressure as consumers continue to defer large discretionary purchases due to inflation and uncertainty about the future. In addition, flooring remodeling is significantly influenced by housing turnover rates, which remain suppressed due to elevated mortgage rates, higher home prices and the ‘locked-in effect’ on homeowners."
In the second quarter, Flooring North America Segment's sales declined 4.3% versus the prior year. The segment’s operating margin was 8.2% as reported, or 8.6% on an adjusted basis, as a result of lower input costs, productivity gains and less restructuring costs, partially offset by the unfavorable impact of price and product mix. Despite challenging market conditions, volumes in some products and channels improved year over year, though partially offset by price and mix dynamics.
This year, the company reported expanding its relationships with larger U.S. home builders, which are increasing their market share. Sales of LVT and laminate collections were stronger in the retailer and builder channels. Recent laminate expansion is ramping up to satisfy higher demand for waterproof flooring. The commercial sector continues to outperform residential, with hospitality, government and education channels leading, though fewer projects are being initiated.
For the second quarter, the Global Ceramic Segment reported a 3.4% decline in net sales versus the prior year. The segment's operating margin was 7.4% as reported, or 8.5% on an adjusted basis, as a result of the unfavorable impact of price and product mix and foreign exchange headwinds, partially offset by lower input costs and productivity gains. To improve our mix, the company is investing in product differentiation with leading-edge printing, polishing and rectifying technologies.
On May 10, the U.S. Department of Commerce announced the commencement of antidumping and countervailing duty investigations of ceramic tile imported from India. The U.S. ceramic tile trade association believes this could lead to tariffs between 400% and 800%. Given India’s widespread dumping, Mexico has increased import duties on Indian tile, and Mohawk's other markets are currently investigating similar options. In the U.S., Mohawk reported that high-end design capabilities, domestic manufacturing and extensive distribution infrastructure are enhancing participation in the builder and commercial sectors.
