The recreation/leisure segment of Dorel Industries had a 2.1 percent sales increase in the second quarter to $199.1 million, but still saw a drop in operating earnings of 7 percent to $16.0 million. The company attributed the revenue growth to currency exchange rates and to acquisitions; organic sales dropped by 5 percent.
Bike sales dropped in the three months ended June 30, but were offset by increases in turnover from parts and accessories. The gross margin for recreation/leisure fell by 1.2 percentage points to 22.2 percent.
Dorel’s Cycling Sports Group (CSG), which includes Cannondale, GT, Schwinn, Mongoose and Sugoi, saw sales to independent bike dealers drop as consumers traded down to cheaper equipment. Bad weather in May and June in the U.S. also hurt business, the company said.
For the year to date, segment sales grew by 7.4 percent, or a 4 percent decline in organic terms. Dorel’s total revenues in the quarter fell by 7.2 percent to $551.1 million, and its net income dropped by 20.8 percent to $24.8 million.
