Dorel Reports Second Quarter 2025 Results

Core Insights - Dorel Industries Inc. reported a significant decline in revenue for the second quarter of 2025, with total revenue of US$292.4 million, down 16.0% from US$348.1 million in the same period last year [2][5] - The company experienced a reported net loss of US$44.9 million or US$1.38 per diluted share, an improvement from a net loss of US$59.5 million or US$1.83 per diluted share in the previous year [2][5] - Adjusted net loss for the second quarter was US$21.1 million or US$0.65 per diluted share, compared to US$13.6 million or US$0.42 per diluted share last year, indicating a 55.7% increase in adjusted net loss [2][5] Financial Performance - For the six months ended June 30, 2025, revenue was US$612.8 million, down 12.3% from US$699.1 million in the prior year [3][10] - Reported net loss for the six months was US$70.2 million or US$2.15 per diluted share, compared to US$77.1 million or US$2.37 per diluted share a year ago, reflecting an 8.9% improvement [3][10] - Adjusted net loss for the six months was US$44.8 million or US$1.37 per diluted share, up from US$30.5 million or US$0.94 per diluted share last year, marking a 47.0% increase [3][10] Segment Performance - Dorel Juvenile showed strong performance in the second quarter, with revenue of US$218.1 million, a slight increase of 0.8% year-over-year, driven by growth in international markets [4][13] - Dorel Home faced significant challenges, with revenue dropping 43.5% to US$74.3 million due to reduced e-commerce sales and ongoing product availability issues [15][19] - The Home segment's adjusted operating loss for the quarter was US$12.7 million, compared to US$8.3 million in the same period last year, indicating a 52.5% increase in losses [20][15] Restructuring and Strategic Initiatives - Dorel announced an expanded restructuring plan on June 30, 2025, including the closure of its Cornwall, Ontario manufacturing facility to reduce costs and streamline operations [21][22] - The restructuring is expected to yield benefits starting in the fourth quarter of 2025, with a full impact anticipated in 2026 [4][26] - The company is also working on exiting non-core product categories and consolidating warehouse operations to improve efficiency [21][22] Financing and Liquidity - On August 7, 2025, Dorel amended its asset-backed loan facility, gaining access to an additional US$20.0 million in liquidity to finance new inventory [23][24] - The company is in the process of re-capitalizing its balance sheet to support growth in the Juvenile segment and facilitate the reorganization of the Home segment [24][23] Outlook - Dorel expects continued improvement in earnings for the Juvenile segment, supported by its global footprint and domestic manufacturing capabilities [25][26] - The Home segment is entering a critical phase of transformation, with a focus on executing structural changes initiated in 2025 [26][27]