Although Dorel Industries expects higher pre- tax earnings over 2004, certain issues within the Home Furnishings and Recreational/Leisure segments will impact earnings in the second half of the year. Second quarter results, to be announced in early August, will be ahead of last year, but for the year after-tax earnings will be within the same range as the prior year.
Year-to-date sales within the majority of the product categories at Dorel's Pacific Cycle division have increased over last year. The Schwinn Sting-Ray introduced in April 2004, became the fastest selling product in the history of the bicycle industry. Well over a half million units were sold within the eight months of 2004. Intense media attention on the bike, named by the Toy Industry Association as the 2004 Outdoor Toy of the Year, helped prompt the unprecedented sales. A combination of the filling of initial orders from retail customers last year and the fact that those customers began 2005 with full inventories, has resulted in lower sales of the Sting-Ray, with the majority of the impact expected in the second half of the year.
“Retail sales of the Sting-Ray continue to be above average as compared to other bicycle categories and remain a key part of the Schwinn portfolio. Market research indicates that the chopper style bicycle trend is continuing. Being the number one selling chopper-style bicycle in the world, the Sting-Ray brand has been expanded with the introduction of three-speed and electric models,” commented Mr. Schwartz.
