MONTRÉAL (BRAIN) — Dorel Sports revenues were up almost 44% in the first quarter, year-over-year, thanks for demand for bikes from its Cycling Sports Group, Pacific Cycle and Caloi divisions. Profits were up 73% in the quarter over the prior year.
“The demand for bicycles continued unabated, as people continue to choose cycling for physical activity and leisure,” Dorel Industries said in a quarterly earnings report Friday.
“The segment overcame supply chain challenges characterized by a lack of shipping availability out of Asia and shortages of bicycle components, major headwinds that will continue going forward. Cycling Sports Group’s gains were driven by significant double-digit growth in almost all countries as demand for Cannondale models was unprecedented.”
Dorel said margins were squeezed at Pacific Cycles (parent of Schwinn, Mongoose and other mass merchant/sporting goods brands) by ”ongoing cost headwinds.”
“Gross margins were pressured by increases in ocean and domestic freight, rising costs of raw materials and bicycle components and the impact of a weakening USD versus the Chinese Yuan,” the company said.
Sales in the Sports division were $270 million, up 43.6% from $188 million in the quarter last year. Operating profits were $21.8 million, up from a $611,000 loss in the period last year.
Dorel Industries’ other divisions — Dorel Home and Dorel Juvenile — also saw sales and profit increases in the quarter, but were outperformed by the bike business. Home was up 16% to $229 million in sales; Juvenile was up 7.5% to $210 million.
“Dorel Sports’ sales remain very strong and the second quarter is expected to be similar in earnings to prior year. Demand remains high, and sales are expected to be at a record level. Bike component availability will remain an on-going issue,” said Dorel President and CEO Martin Schwartz.
Dorel is the owner of Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse. Dorel's Class A and Class B shares are traded on Toronto's stock exchange.
