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Mohawk Industries, Inc.’s (MHK - Free Report) adjusted earnings per share (EPS) of $2.72 beat the Zacks Consensus Estimate of $2.71 by 0.4%. Adjusted earnings exclude restructuring, acquisition and other charges. Earnings also increased 14.3% year over year backed by strong operating margins.
Total revenue of $2.22 billion missed the Zacks Consensus Estimate of $2.26 billion by 1.8%. Revenues however increased 2.3% year over year on higher sales across Flooring North America and Rest of the World segments.
Operating Highlights
Adjusted gross profit (excluding restructuring, acquisition impact) of $683.4 million increased 5.9% year over year.
Adjusted selling, general and administrative (SG&A) expenses were up 2.9% to $404.4 million from the prior-year quarter.
Adjusted operating income increased 17.7% to $278.9 million. Adjusted operating margin grew 100 basis points (bps) to 12.6%.
Operating margin as reported expanded 110 bps to 12.4%, over the prior-year quarter. This marks the highest first-quarter operating margin ever reported by the company.
Segment Details
Global Ceramic: Net sales at this segment amounted to $789.6 million, up 2% year over year both on a reported and constant days and constant currency basis. The weak growth rate can be attributed to the customer inventory adjustments, postponed product transitions in North America, harsh weather conditions in Russia and Eastern Europe and a weaker Mexican Peso.
Flooring North America: Net sales at this segment totaled $939.5 million, up 4% year over year. On a constant days basis sales increased 5%, driven by strong residential carpet, hard surface products and laminate collections sales.
Flooring Rest of the World: Net sales increased 1% year over year to $496.2 million. On a constant days and currency basis sales improved 3%, on solid sales of LVT, laminate and insulation products. However, sheet vinyl sales were down from the prior year due to low inventories from previous plant disruptions.
Mohawk Industries, Inc. Price, Consensus and EPS Surprise
The company plans to finalize four acquisitions in the second quarter in order to expand its product offerings, geographic penetration and competitive position. The EPS guidance for the second quarter is at $3.53 to $3.62 (including acquisitions), which represents a 1.7% to 4.3% increase year over year.
Here are some companies in the broader Consumer Discretionary sector set to report earnings next week.
Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to release its quarterly numbers on May 2.
Charter Communications, Inc. (CHTR - Free Report) is expected to report its quarterly numbers on May 2.
Comcast Corporation (CMCSA - Free Report) is slated to report its quarterly results on May 3.
Zacks' Hidden Trades
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Mohawk (MHK) Tops Q1 Earnings, Operating Margins Expand
Mohawk Industries, Inc.’s (MHK - Free Report) adjusted earnings per share (EPS) of $2.72 beat the Zacks Consensus Estimate of $2.71 by 0.4%. Adjusted earnings exclude restructuring, acquisition and other charges. Earnings also increased 14.3% year over year backed by strong operating margins.
Total revenue of $2.22 billion missed the Zacks Consensus Estimate of $2.26 billion by 1.8%. Revenues however increased 2.3% year over year on higher sales across Flooring North America and Rest of the World segments.
Operating Highlights
Adjusted gross profit (excluding restructuring, acquisition impact) of $683.4 million increased 5.9% year over year.
Adjusted selling, general and administrative (SG&A) expenses were up 2.9% to $404.4 million from the prior-year quarter.
Adjusted operating income increased 17.7% to $278.9 million. Adjusted operating margin grew 100 basis points (bps) to 12.6%.
Operating margin as reported expanded 110 bps to 12.4%, over the prior-year quarter. This marks the highest first-quarter operating margin ever reported by the company.
Segment Details
Global Ceramic: Net sales at this segment amounted to $789.6 million, up 2% year over year both on a reported and constant days and constant currency basis. The weak growth rate can be attributed to the customer inventory adjustments, postponed product transitions in North America, harsh weather conditions in Russia and Eastern Europe and a weaker Mexican Peso.
Flooring North America: Net sales at this segment totaled $939.5 million, up 4% year over year. On a constant days basis sales increased 5%, driven by strong residential carpet, hard surface products and laminate collections sales.
Flooring Rest of the World: Net sales increased 1% year over year to $496.2 million. On a constant days and currency basis sales improved 3%, on solid sales of LVT, laminate and insulation products. However, sheet vinyl sales were down from the prior year due to low inventories from previous plant disruptions.
Mohawk Industries, Inc. Price, Consensus and EPS Surprise
Mohawk Industries, Inc. Price, Consensus and EPS Surprise | Mohawk Industries, Inc. Quote
Q2 Guidance
The company plans to finalize four acquisitions in the second quarter in order to expand its product offerings, geographic penetration and competitive position. The EPS guidance for the second quarter is at $3.53 to $3.62 (including acquisitions), which represents a 1.7% to 4.3% increase year over year.
Zacks Rank & Upcoming Releases
Mohawk Industries carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are some companies in the broader Consumer Discretionary sector set to report earnings next week.
Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to release its quarterly numbers on May 2.
Charter Communications, Inc. (CHTR - Free Report) is expected to report its quarterly numbers on May 2.
Comcast Corporation (CMCSA - Free Report) is slated to report its quarterly results on May 3.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>