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Dorel's bike sales up again in Q3

MONTREAL, Quebec (BRAIN)—Dorel Industries’ bike division posted a third quarter revenue gain of 9.1 percent on Thursday with mass market and specialty business both showing sales increases for the June through September months.

Total third quarter revenue was $228.9 million, up from $209.8 million for the same time period in 2011. Operating profit was up 25 percent to $12.5 million. For the nine months ending in September, revenue was $701.8, up 6.4 percent from $659.3 million last year. Year-to-date operating profit increased 13.1 percent to $55.5 million. Part of the improvement stems from the ongoing turnaround of Sugoi, which bled $2.2 million during the third quarter last year, but broke even this year. 

Dorel owns Cannondale, Mongoose, Schwinn, GT, Pacific Cycle, Iron Horse, the Guru Fit Experience and several other smaller P & A brands and distributors.

On the mass market side, third quarter shipments were up as layaway programs at major retailers have indicated a stronger than normal Christmas selling season, causing Dorel to bring in more product than usual, said Jeffrey Schwartz, Dorel’s chief financial officer. One hot seller is predicted to be Pacific Cycle’s electric ride-on car toy, he said.

The specialty side of the business is also performing well, Schwartz told financial analysts on Thursday.

“We’re strong everywhere,” he said. “We’re not going to break down the two, they are both good for the year. The timing, sometimes one is stronger in September and the other in stronger in October. We’re very confident on where we’re going to finish the year in that segment.”

Stocking up for the holiday season is one reason Dorel’s third quarter companywide inventory came in high at $528.7 million compared with $442.4 million in 2011. Another factor was the earlier transition to new model year bikes between 2012 and 2013 compared to 2011 to 2012, Schwartz said.


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