Shares of Mohawk Industries Inc. rallied more than 14% in the extended session Thursday after the flooring products maker reported earnings and sales above Wall Street expectations, thanks to higher prices and unabated demand. Mohawk said it earned $245 million, or $3.78 a share, in the quarter, compared with $237 million, or $3.36 a share, in the year-ago period. Adjusted for one-time items, the company earned $3.78 a share, matching GAAP EPS. Revenue rose 13% to $3 billion. FactSet consensus called for EPS of $2.90 a share on sales of $2.9 billion. The results topped company expectations thanks to higher pricing, growth in its ceramics business, and improvement in its commercial unit, Mohawk said. Production was at “high levels” in most markets to address order backlogs and replenish inventory, the company said. Fast-rising costs required “multiple” pricing increases to pass through inflation, Mohawk said. “We have implemented these unprecedented increases across our markets and have announced additional increases across the business as inflation continues to rise,” it said. Sales are “strong” and market conditions for flooring “remain favorable, even as governments raise interest rates to combat inflation,” it said. “Millions of millennials in their late 20s and early 30s are forming households and desire home ownership” amid low housing inventory, with the remodeling market also likely to stay strong, the company said. Shares of Mohawk ended the regular trading day up 3.8%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
