Dorel Industries said revenues at its sports segment increased for the eighth consecutive quarter in the three months ended March 31, rising by 43.6 percent in reported U.S. dollars to $270 million, and by 41.5 percent in local currencies, driven by the growing global demand for bikes. The second quarter will be a record, but the company warned that shortages of components, higher costs and lack of shipping availability are still posing a risk for future earnings.
The segment’s gross margin went up by 3.9 percentage points to 22.9 percent, helped by foreign exchange gains and better cost absorption, offset by higher costs for shipments, raw materials and components. Operating earnings of $21.8 million represented an operating margin of 8.1 percent against a negative margin of 0.3 percent in the year-ago period.
Mentioning double-digiting gains for its Cycling Sports Group in almost all countries, the Canadian-based company said they were driven in particularly by “unprecedented” demand for its Cannondale models. Sales were also impressive in Dorel’s Pacific Cycle division, but margins were squeezed due to cost headwinds. Demand for Caloi was strong in all the channels, with an improvement in the product mix, but sales in Brazil fell slightly on supply shortages.
Adding its other business units, overall group revenues of $708.9 million were up by 22.1 percent. The group posted an adjusted net profit of $12.2 million for the period against a loss of $13.6 million in the same quarter of 2020.