Mohawk Industries shares fall despite strong Q3 results as market volume to remain soft

CALHOUN, Ga. - Mohawk Industries, Inc. (NYSE:MHK) reported third-quarter earnings that slightly beat analyst expectations, but shares were down 4.5%.

The flooring manufacturer posted adjusted earnings per share of $2.67 for the third quarter, narrowly exceeding the analyst consensus of $2.65. Revenue came in at $2.76 billion, slightly above the $2.73 billion analysts had expected and up 1.4% compared to the same period last year.

For Q4, Mohawk projected adjusted EPS between $1.90 and $2.00.

The company noted that economic conditions across its regions weakened more than anticipated compared to the prior quarter.

"Though economic conditions across our regions weakened more than anticipated compared to the prior quarter, we believe we outperformed our markets," said Jeff Lorberbaum, Chairman and CEO of Mohawk Industries. "Our sales and product mix continued to benefit from the success of our premium residential and commercial offering and collections introduced during the past two years."

The company’s Global Ceramic Segment saw sales increase 4.4% as reported, while Flooring Rest of the World sales rose 4.3%. However, Flooring North America sales decreased 3.8% compared to the prior year.

Mohawk continues to implement restructuring initiatives expected to deliver $110 million in savings this year. The company has identified additional restructuring opportunities that should result in annualized savings of approximately $32 million.

During the quarter, Mohawk generated approximately $310 million in free cash flow and repurchased 315,000 shares for approximately $40 million.

Management noted that declining interest rates should gradually encourage increased home sales and remodeling, though they expect market volume to remain soft through the end of the year.

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