Dorel Industries' sports segment saw revenues decrease by 12.3 percent to $251.1 million in the second quarter. Organic sales declined by around 5 percent. Adjusted operating profit for the segment, excluding restructuring and other costs, dropped by 42.1 percent to $10.7 million. The stronger U.S. dollar against most of the currencies in Dorel's markets accounted for a net negative impact on the segment's operating profit of around $7 million.
Dorel Sports' brands include Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and Sugoi. The Caloi division in Brazil posted double-digit sales growth in local currency during the quarter. Sales also increased organically in Japan and the U.K. These bright spots were offset by a decline in organic sales in Europe as dealers purchased inventory in the first quarter ahead of price increases implemented in April and in anticipation of the launch of new model-year 2016 products in the third quarter. Sales in North America were hurt by wet weather in May as well as mass-market retailers reducing inventory levels in the sporting goods category.
For the six months, Dorel's sports segment saw revenues decline by 8.8 percent to $480.0 million. Organic revenues declined by around 2 percent, after removing the impact of varying foreign exchange rates. Adjusted operating profit year-to-date was down by 37.6 percent to $22.0 million. The U.S. dollar appreciation against most of the currencies in Dorel's markets resulted in a net negative impact of around $14 million during the first six months of the year.
The company expects new product launches to deliver better results in the second half versus last year, driven by the Cycling Sports Group, which focuses on the IBD channel, and Pacific Cycle for the mass channel. Most of the benefit will be in the fourth quarter due to the seasonality of the business and the positive impact of Christmas shopping.
