Dorel Industries said its Dorel Sports division bounced back in the fourth quarter of 2017 from a difficult third quarter, despite continuing weakness in the global bicycle market, particularly in North America. The parent company of Cannondale and other bicycle brands attributed the improvement to strong performances at its Brazilian subsidiary, Caloi, and other bike operations outside North America, and the management is anticipating higher sales and profits for the division in all the sales channels during the current year in view of the launch of new products.
In the latest quarter, Dorel Sports' revenues inched up by 0.6 percent to $236.8 million, but they were down organically by about 1.4 percent, excluding foreign exchange gains. The gross margin improved by 1.7 percentage points to 22.0 percent of sales, but the adjusted operating margin fell by 0.4 percentage points to 3.9 percent.
For the full 2017 financial year, Dorel Sports' sales declined by 7.8 percent to $865.4 million. They dropped by about 11 percent in constant currencies and after removing the effect of a change in the international business model of the Cycling Sports Group (CSG) from a licensing to a distribution mode during the third quarter. The gross margin for the year improved to 22.5 percent from 20.9 percent in the previous year, but the adjusted operating margin declined by 0.5 percentage points to 2.9 percent.
Overall, the Dorel Industries group booked a 20.3 percent increase in adjusted net income for the year to $70.1 million on 1.0 percent lower revenues of $2.58 billion.
