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Dorel Sports records loss despite sales increase in first quarter

Published May 8, 2020

MONTRÉAL (BRAIN) — Dorel Sports, parent company of Cycling Sports Group and Pacific Cycle Group, saw a 2% sales increase in the first quarter thanks to good business in the final two weeks of March. However, Dorel Sports, a division of Dorel Industries, recorded a $611,000 loss in the quarter partially due to currency exchange rates, retailer receivables and retail closures in some markets. 

Dorel, in its first-quarter report released Friday, said it saw sales increases at both CSG (parent company of Cannondale and GT) and PCG (parent company of Schwinn and Mongoose). "PCG saw strong retail point-of-sale (POS) with growth accelerating particularly in the last two weeks of March as consumer demand for bikes spiked amid the pandemic lockdowns, and ahead of the Easter holiday period," the company. 

A strong dollar forced price increases in Brazil, where Dorel sells Caloi bikes. That harmed sales, as did the closure of many Brazilian retailers at the end of March. 

Dorel took a $2.4 million impairment charge on trade account receivables in the quarter.

Dorel Sports sales in the quarter were $188.2 million compared to $184.5 last year. Operating loss was $611,000, compared to a profit of $4.5 million last year. 

The company said in the short term supply will be tight because of high demand for bikes, but that it expects Dorel Sports to return to profitability in the next quarter. The company noted that many of its European dealers began re-opening in late April. 

Overall Dorel Industries sales were $580.8 million, down 7.2% from last year's first quarter. Adjusted net loss for the company was $13.6 million, compared to net income of $5.8 million last year.

Dorel Sports is traded on the Toronto stock exchange under the DII.B and DII. A symbols. Quote on Yahoo Finance

Topics associated with this article: Coronavirus, Earnings/Financial Reports

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