Entangled for several quarters in supply chain chaos, Dorel Industries would begin to “come out of the hole”, assures the management of the manufacturer of furniture and children’s products.
“It wasn’t a good quarter compared to last year, but when you compare to the previous quarter [three months ago], you’re starting to come out of the hole,” Chief Financial Officer Jeffrey Schwartz commented during a conference call with analysts on Friday.
The pandemic has brought many logistical headaches for Montreal society. She first had to deal with delivery times and rising transportation costs. In response, retailers hoarded too many items at a time when consumers shifted their shopping habits, prioritizing activities they couldn’t do during the pandemic and essential needs amid high inflation.
The situation would begin to stabilize at retailers, notes Mr. Schwartz. “Our customers are ready to discuss new products. It’s back to normal, that’s good news. »
The recovery is more advanced in the children’s products segment, but Chairman and CEO Martin Schwartz points out that the furniture segment is also showing a recovery. “Daily orders in July are 30% higher than the first half of the year. »
Jeffrey Schwartz also indicated that the computer attacks that Dorel was targeted in March continued to disrupt operations in the second quarter. In the first quarter ended March 31, the event cost the company nearly $13 million in sales and $4 million in profit. “It took until mid-April to fully recover our systems. Some sales were lost, others were postponed. »
The company also encountered operational difficulties, the nature of which the manager did not want to specify. “We’ve had a few unpleasant things happen to us, but I don’t want to discuss them on this platform. These are things that affected us, preventing us from delivering items on time in early April. »
In the second quarter, Dorel posted a net loss of US$16.7 million in the second quarter on Friday, compared to US$13.6 million in the same period last year. Its quarterly revenue fell 19% to $345.2 million.
The children’s products division has had a profitable first quarter since the third quarter of 2021, which management attributes to the launch of new products in Europe.
The improving situation did not convince investors. The stock fell 29 cents, or 5.23%, to $5.26 at the close of trading on the Toronto Stock Exchange.
