Dorel has seen net income rise, with record profitability in Q3 across the company in its third quarter and nine month results, published yesterday.
Revenue dropped for the firm to US $518.5 million, 6.1 per cent lower than US $552.2 million a year ago. Net income rose by 11.1 per cent compared like-for-like with Q3 2008.
Dorel’s Recreational/Leisure division, which includes the cycling arm of the firm, saw revenue decline. According to the company, that fall is due largely to reduction in sales at ‘mass merchants’, though Dorel noted an increase of sales at independent bike dealers.
In quarter three the division's revenue fell 11 per cent to US $145.1 million from US $163.2 million. Gross profit also fell compared like-for-like with Q3 2008, by 8.7 per cent.
The Dorel statement read: “Consumers are purchasing less of CSG’s higher-end products and are trading down to lower priced items, which carry lower margins. Excluding the impact of new business acquisitions and foreign exchange variations on the segment’s non-US based businesses, Recreational/Leisure’s organic revenue decline was approximately 10 per cent for the quarter and six per cent year-to-date.”
Dorel President and CEO Martin Schwartz lauded the wider company’s positive results: “The fact that we have exceeded last year’s earnings for the quarter despite a difficult economic period is a tribute to the quality and value of our products and our focus on maximising margins through cost containment, a more stable cost environment and our disciplined minimum margin requirement program.
"Dorel’s multi-national operations, diverse operating segments and broad product lines have traditionally compensated for earnings variations within the Company’s various operating divisions. This is the case in 2009 as strong results within North America in the Juvenile and Home Furnishing segments are offsetting less profitable results at other divisions elsewhere within the Company.”
Dorel now encompasses Cannondale, GT, Sugoi, Schwinn, Mongoose, Iron Horse and the former Hot Wheels, among others.