Flooring manufacturer The Dixie Group posted a third-quarter net loss of $3.7 million as sales fell 5.4% to $64.9 million. The company cited high interest rates, low home sales, and weak consumer confidence for reduced demand, while higher utility and medical costs further pressured margins.
"Net sales in the third quarter started off slow in the month of July but improved throughout the remainder of the quarter," said Dixie Chairman and CEO Daniel K. Frierson. "Soft market conditions, as a result of high interest rates, low existing home sales and low consumer confidence, have negatively impacted our overall sales volume. Net sales from soft surfaces during the quarter were 3% below prior year while the industry, we believe, was down approximately 6.5%."
For the third quarter of 2024, ended September 28, 2924, the company reported net sales of $64.9 million, down 5.4% compared to $68.6 million in the same quarter of 2023. The company had an operating loss of $2.1 million compared to an operating loss of $913,000 in the third quarter of 2023.
For the nine months ended September 28, 2024, net sales were $200.6 million or 4.3% below the net sales for the nine-month period ended September 30, 2023, at $209.7 million. The operating loss for the first nine months of 2024 was $669,000 compared to an operating loss of $354,000 in the same period of the prior year.
Frierson said the company is pleased by the successful operation of the extrusion equipment that began in the first quarter of this year. "Along with providing raw materials at a lower cost, the importance of securing an internal supply of fiber became more apparent as one of our key suppliers of white nylon announced they would be shutting down their operations later this year," he said in a statement.
The company continued to promote its Step Into Color campaign through the third quarter, placing point-of-purchase materials in retail stores and using digital marketing, which led to increased lead generation, sample order activity from websites and improved capabilities for online product visualization
"The Step Into Color campaign connects our retail customers, designers and consumers with a world of color options, including custom colors available in all of our brands," Frierson said. "This provides the end user with colorful options in piece-dyed nylon as opposed to the sea of sameness that is solution-dyed polyester."
The company reported strong growth from retail stores with the Premier Flooring Center program thanks to investments in samples, merchandising and training.