Mohawk still being hit by slowing economy and commodity costs

Published 5:34 pm Monday, July 21, 2008

From Staff Reports

A slowing economy, slumping housing market and soaring commodity costs continue to affect sales and profit at Calhoun-based Mohawk Industries.

Net sales for the second quarter of 2008 were $1.84 billion, a decrease of 7 percent from $1.97 million from the same period last year. Net earnings for the second quarter were $89 million, down from $115 million in 2007.

For the first six months of 2008 net earnings were $154 million, down 25 percent from $205.64 million during the same period last year. Net sales for the first six months of 2008 were $3.57 billion, a 7 percent drop from $3.84 billion in 2007.

Jeff Lorberbaum, Mohawk chairman and CEO, said the sales decreases for both the second quarter and year to date were due to the slowing U.S. residential housing market and European demand.

Lorberbaum said the Mohawk segment, which includes carpet and rugs, is “under pressure,” with second quarter sales falling 13 percent below last year. He said higher energy, raw material and freight costs “are causing dramatic cost inflation,” so much so that the company has made three carpet price increases since December 2007 to offset rising costs.

Despite the tough times, Lorberbaum said, “We remain convinced Mohawk will be a stronger company as we come out of this cycle.”

Mohawk, the world’s largest floorcovering company, has more than 31,000 employees.