Europe is tough market for global flooring giant
April 28, 2023
World flooring giant Mohawk Industries has seen Q1 sales slip 7% with Europe being singled out as a pressure point as consumers tighten their belts.
The latest Q1 2023 trading update from Mohawk shows sales down 6.9% to $2.8bn from $3bn with net earnings down to $112m from $246m.
The group's Rest of the World segment which includes the UK and Europe was down 9.7% but performance is improving as the sales mix is adjusted to meet the challenge.
"Our European businesses have been compressed as high energy prices and inflation impacted consumer budgets," said Mohawk's statement to investors. "Compared to the prior quarter, the segment’s business improved as we increased promotions to strengthen sales, had fewer shutdowns, lowered costs and expanded product options for more constrained consumer budgets."
“Our industry is operating in a completely different environment than a year ago. Around the world, central banks are raising interest rates to slow their economies and reduce inflation. These actions lower our industry volume as new home sales and residential remodelling are postponed," it said. "The commercial sector has remained stronger than residential, though higher interest rates and tighter lending requirements could affect business investments as the year progresses."
Mohawk also reported that they are restructuring their residential LVT operations to convert from flexible products to rigid LVT.
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