MONTREAL (BRAIN)—Dorel’s bike business increased nearly 8 percent in the second quarter of the year despite impacts from global issues such as currency exchange rates and shipping container shortages.
For the second quarter, Dorel’s recreation and leisure segment, which includes its IBD and mass-market bike business, saw a 7.9 increase in revenue. Sales were $214.8 million compared with $199 million for the same period the year before. Earnings from operations rose 6.8 percent.
During the first six months of the year, revenue rose 10 percent, from $360.5 million in the first half of 2009 to $396.5 million for the same period this year.
Excluding new business acquisitions and foreign exchange rate variations, organic revenue was up 5 percent for the quarter and the half.
Sales to the mass market were hindered by a lack of supply due to the global shortage of shipping containers, particularly in the month of June, said Jeffrey Schwartz, Dorel’s chief financial officer.
“We weren’t able to keep up with demand and get enough product in the stores,” Schwartz said during a Thursday afternoon conference call with analysts. The situation has been rectified, Schwartz added.
The IBD side of the business, led by Cannondale, was impacted by the weak euro, which was trading around $1.23 against the dollar at the end of the second quarter.
“We did perform in that area significantly better in that area however we had to take a loss of over $2 million because of the reduction in value of the euro compared to the value of the dollar,” Schwartz said. If the euro stays where it is now, at $1.32, Dorel expects to see some of that loss come back.
Dorel owns Cannondale, GT, Mongoose, Schwinn, Sugoi, Pacific Cycle, PTI and Iron Horse.
—Nicole Formosa
nformosa@bicycleretailer.com
