MONTREAL (BRAIN) — Dorel Sports reported third-quarter revenue increased 14.2% from the same time last year, while Dorel Industries Inc. earnings as a whole jumped 2.3% during the same period.
For the period ending Sept. 30, Dorel Sports — which includes Cycling Sports Group, the parent of Cannondale and GT — revenue was $250 million compared to $219 million in 2018. Adjusted organic revenue increased to 15.7%. Operating profit was $6 million for the third quarter this year compared to $7 million last year.
On Oct. 1, Dorel announced it was canceling a planned dividend because tariffs were squeezing its bottom line.
Dorel's president and CEO, Martin Schwartz said the trade war and some orders being delayed to the fourth quarter affected sales, but Cannondale's 2020 lineup has helped Cycling Sports Group's sales.
"Margins in mass were affected by tariffs, but revenue grew double digits for the first time in five years," Schwartz said. "Our bikes are selling well across all channels."
Cycling Sports Group's IBD business continued to outpace the rest of the industry, according to the report. European growth was paced by e-bike sales, which doubled, helped by new e-MTB models. Caloi had double-digit revenue growth with increased volume because of success with Brazil's Yellow Bike Sharing program. Caloi had improved sales because of Cannondale brand marketing efforts, according to the report. While its point of sale business was solid, Pacific Cycles was affected by margin compression and from key retailers delaying shipments to the current fourth quarter.
Dorel Industries' third-quarter revenue was $685.7 million compared to $670.4 million from a year ago.
Operating profit for the quarter was $6 million compared to $7.0 million a year ago. Adjusted operating profit was $5.6 million compared $7.5 million last year.
“At Dorel Sports, the positive momentum in Cycling Sports Group’s IBD business is expected to continue," Schwartz said. "This, coupled with the shift of orders at Pacific Cycle from the third to the fourth quarter, provides the confidence that the segment will deliver a solid fourth quarter in both sales and adjusted operating profit."
