Dorel bikes sales nearly flat in quarter

MONTREAL, Quebec (BRAIN) Thursday August 9 2012 4:52 PM MT—Dorel Industries, the owner of Cannondale, Schwinn, GT and other bike brands, is reporting that unfavorable currency conditions reduced earnings in its bike division by about $2.5 million in its second quarter, although profits in the division were flat and revenues grew by 1 percent.

Dorel's Recreational/Leisure division, which is dominated by its bike business, saw total sales of $252 million for the quarter. The company said sales through speciality bike shops drove the division's numbers.

"The increases are in the IBD channel in most of the segment's markets and are being driven by improved sales in several bike categories," the company said in a release Thursday.

"Intense branding of the Cannondale line continues to drive results," Dorel president and CEO Martin Schwartz said in the release. The company also said its Sugoi clothing brand was making progress toward "returning to profitability."

Schwartz said the Recreational/Leisure division is "on track to exceed last year's record earnings."

Half of the sales of Dorel's IBD bike brands are outside the U.S. and are more vulnerable to exchange rate shifts than Dorel's mass market bike sales, which are primarily in the U.S.

Overall the company saw a 2.4 percent increase in revenue in the quarter, to $633.7 million. Net income across its divisions was $30.3 million, a 32 percent increase over the same quarter last year. That was driven by Dorel's Juvenile division, where sales increased by 5 percent.

The company raised its quarterly dividend to 30 cents from 15 cents.