(Montreal) The logistical nightmare continues for Dorel Industries as the negative consequences of the supply chain disruption are “even worse than expected”.
Comments from management of the furniture and juvenile products maker give some idea of the chaos plaguing the global supply chain, during a conference call Friday with financial analysts to discuss third quarter results.
Even “big retailers” aren’t always able to accept all the items they need, said Martin Schwartz, President and CEO. “Some customers can’t afford the items they need. They don’t have the truckers or don’t have room in their warehouse. ”
“Tens of millions of dollars” in merchandise are waiting to be delivered. For the juvenile products division, the company estimates it lost $ 14 million (all amounts in this article are in US dollars) in revenue in Europe, due to supply chain disruptions. For furniture, it’s more difficult to assess the loss, the executive said, but it would be around $ 25 million, still in Europe.
Dorel will have no choice but to raise prices again, adds Schwartz, who does not know when these increases will occur. He notes that access to containers is the main challenge for the company.
Results
As a result of these difficulties, Dorel recorded a loss of $ 68 million, or $ 2.09 per share, compared to earnings of $ 9.3 million, or 28 cents per share, from continuing operations.
Revenue reached $ 437.2 million, a decrease of 2.4% from last year.
These are the first quarterly results since the announcement of the sale of the Sports division, which should be completed in the first quarter of 2022.
The results also take into account an unfavorable judgment by a Luxembourg court, announced at the end of October. An amount of 61.7 million, or $ 1.90 per share has been provided to pay the tax due.
In a question from an analyst, Mr. Schwartz said one should not expect more tax disputes like this to arise.
Dorel Maison’s revenues fell 9.9% to $ 218.1 million, again in the third quarter. The baby products division saw revenue increase 6.6% to $ 218.1 million.