Dorel Industries Inc. reported third quarter revenue at Dorel Sports increased 14.2 percent, to $250.3 million. The gains were driven by revenue growth across all three divisions, driven by strong performances at the Cycling Sports Group (CSG).
Dorel Sports includes Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse.
Excluding foreign exchange rate fluctuations year-over-year and the impact of the divestment of the performance apparel line of business (SUGOI), adjusted organic revenue increased 15.7 percent.
Nine-month revenue increased US$25.5 million, or 3.9 percent, to US$675.9 million.
CSG’s third quarter growth was driven by continued excitement and increased sales of the model year ’20 lineup. CSG margins remained strong as a result of increased in-line, full margin sales and solid retail POS levels continue to trend upwards. Year-to date CSG’s independent bike dealer (IBD) business continued to outpace the rest of the industry. Growth in Europe was primarily driven by the e-bike category which doubled sales with e-mountain bike launches such as the Moterra and Habit Neo. Caloi delivered strong double-digit revenue growth with increased volume due to success with Brazil’s Yellow Bike Sharing program and a better mix. Caloi is also experiencing improved results from increased Cannondale brand marketing efforts. POS levels were solid at Pacific Cycle, however the division was negatively impacted by margin compression. In addition, key retailers delayed holiday pipeline shipments to the current fourth quarter.
Operating profit for the quarter was US$6.0 million compared to US$7.0 million a year ago. Adjusted operating profit was US$5.6 million compared US$7.5 million last year. The Pacific Cycle issues described above plus related additional warehouse storage were solely responsible for the decreased operating profit. Nine-month operating profit was US$20.6 million compared to US$2.9 million in 2018. Adjusted operating profit was US$20.2 million versus US$14.7 million.
Photo courtesy Cannondale