The supply chain continues to be a headache for Dorel. After dealing with delays and rising transportation costs, the furniture and children’s product manufacturer now finds itself with too much inventory.
Posted at 12:44 p.m.
The situation is particularly difficult for the Dorel Home division, which posted an 11.4% drop in sales to 209.8 million US in the second quarter.
“The second quarter began with serious supply issues, whether we’re talking about container availability, logistics and unloading problems,” said President and CEO Martin Schwartz during a conference call on Tuesday to discuss quarterly results.
The Montreal company, however, observed a rapid turnaround in the situation which led to other problems, explains the manager. “As the quarter unfolded, some issues improved to the point where goods flooded in at a time when consumer habits changed drastically. »
Household spending on furniture has fallen as consumers travel more or worry about rising food and fuel prices. “This situation has created a glut of inventory for us, but also for our retail customers who have reduced their order. »
In the second quarter, Dorel announced a net loss of 13.6 million US, compared to a loss of 1.4 million US for the same period last year. Revenues, for their part, fell by 4.4% to 427.8 million US.
Around noon, Dorel shares fell 61 cents, or 8.89%, to $6.25 on the Toronto Stock Exchange.