Dorel Industries reported first-quarter revenues of $203.5 million in its Recreational/Leisure division, down by 8 percent, ignoring varying exchange rates, after 13 consecutive quarters of growth. The division's gross profit fell by 12 percent to $51.3 million. Dorel's Recreational/Leisure segment includes cycling brands such as Cannondale, GT, Schwinn, Mongoose, Iron Horse, Pacific, RoadMaster and Sugoi.
The company blamed exceptionally poor weather in both North America and Europe. In the U.S. the March-April period was the second coldest on record, while in Europe some regions had the coldest spring in 50 years. This was in stark contrast to a year ago, when milder-than-usual weather in March had driven higher point-of-sale levels. The company noted that temperatures below normal and persistent rain and snow resulted in a 25 percent decrease in U.S. bicycle industry sales in March compared with last year, with a drop of more than 30 percent among independent bike dealers.
In addition to poor weather, earlier shipments than in the first quarter 2012 also held sales down. In the previous year, many new models were shipped in the first quarter whereas in 2013, deliveries of the new product line began in the fourth quarter of 2012.
The group's total revenues came in at $594 million for the quarter, down by 4.3 percent, and net income dropped by 23.2 percent to $22.3 million. For the full year, the company remains positive about the sales and profit prospects for its Recreational/Leisure segment, considering that its market shares are intact or growing. Sales are expected to rebound with improved weather conditions, and in fact, some of that rebound has already occurred in Europe and certain parts of North America.
