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Dorel Reports Third Quarter 2025 Results
Globenewswire· 2025-11-07 22:05
Core Insights - Dorel Industries reported a significant decline in revenue and increased net losses for the third quarter and nine months ended September 30, 2025, compared to the previous year [2][3][7] Financial Performance - Third quarter revenue was US$298.6 million, a decrease of 15.7% from US$354.2 million in the same period last year [2][6] - Reported net loss for the third quarter was US$47.4 million or US$1.45 per diluted share, compared to a net loss of US$21.9 million or US$0.67 per diluted share last year, marking an increase in loss of 116.6% [2][6] - For the nine months, revenue was US$911.4 million, down 13.5% from US$1,053.4 million in the prior year [3][8] - Reported net loss for the nine months was US$117.6 million or US$3.60 per diluted share, compared to US$99.0 million or US$3.04 per diluted share a year ago, reflecting an 18.9% increase in loss [3][8] Segment Performance - Dorel Juvenile's revenue for the third quarter was US$220.2 million, a decline of 0.8% year-over-year, but showed strong international performance, particularly in Europe, which grew by 9.6% [12][13] - Dorel Home segment revenue fell sharply by 40.7% to US$78.3 million, impacted by product availability issues and a strategic reduction in non-core SKUs [22][24] - The gross profit for Dorel Juvenile decreased by 2.6% to US$61.1 million, while the operating profit dropped by 32.4% to US$4.9 million [12][15] Restructuring and Strategic Initiatives - The company has entered into new financing agreements to strengthen its financial position, including a US$310 million credit facility and a US$75 million private placement of preferred shares [30][31][32] - Dorel Home is undergoing a significant restructuring, including the cessation of manufacturing operations and workforce reductions, aimed at creating a leaner organization [26][28][40] - The company is actively working on integrating back-office functions between Dorel Juvenile and Dorel Home, with a significant reduction in non-manufacturing headcount planned [28][40] Market Challenges - The company faces external pressures such as tariff uncertainties and higher retail price points, which are contributing to a slowing retail environment, particularly in the U.S. market [4][14] - Despite these challenges, Dorel Juvenile's international markets have shown resilience, offsetting declines in the U.S. [4][12] Outlook - The company remains optimistic about the future, expecting improvements in the U.S. business and overall financial performance in 2026 as restructuring efforts take effect [39][40]
