MONTREAL (BRAIN)—Dorel Industries reported a 10 percent increase in its bicycle business for the first quarter of the year, driven by strong sales of Cannondale and GT in Europe and Australia, according to an earnings report released today by the company.
The quarter ended with revenue of $200.4 million, up from $181.6 million during the same three months last year. Operating profit improved by 17.9 percent.
Revenue growth in the IBD channel was 25 percent due to momentum from product lines introduced last year continuing into this year.
“The Cannondale dealer base continues to grow due to innovation and brand building. Sales in the segment’s mass merchant category declined mid-single digits due in part to poor weather and the late Easter holiday period,” the company said.
The mass merchant business was sluggish in the first quarter due to several factors, said Jeffrey Schwartz, Dorel’s chief financial officer, during a conference call with analysts Wednesday morning. Retailers ended the Christmas season with slightly higher inventory than the year before so replenishments were reduced. Also the numbers fell off compared with the first quarter of 2010 when the weather was better, the Easter holiday season came earlier and an ad campaign for Schwinn drove sales of the brand, Schwartz added.
Dorel’s apparel and footwear business, which was weak in the last quarter of 2010 made some improvements, Schwartz said.
“We have still have issues there the performance improved sign compared to Q4. We’re not pleased with the way everything’s running right now so we still have a lot of work to do, but we’ll get there,” he said.
The Apparel and Footwear Group, which runs from Sugoi’s headquarters, did not perform as well as expected due to excess inventory and operational challenges while setting up the new division in Vancouver, B.C. Dorel has identified that segment as a focus for improvement initiatives this year.
Dorel owns Cannondale, GT, Mongoose, Schwinn, Sugoi, Iron Horse and PTI.