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Dorel warns U.S. tariffs could impact its business, result in price increases

The Canadian Press   

Industry Manufacturing Manufacturing

Montreal – Manufacturer Dorel Industries Inc. warns that proposed tariffs in the U.S. would have a significant impact on all three of its major business lines and could result in higher prices for consumers.

The bicycle, furniture and baby ware maker, which manufacturers some of its goods in low-cost China, says the proposed U.S. tariffs on imports from that country is creating business uncertainties for the company and its competitors, adding that higher costs will ultimately be passed on to consumers.

The Montreal-based company slipped into a loss in its second quarter even as its children’s division in the United States overcame the earlier impact of the closure of Toys “R” Us stores to post its best year-over-year quarterly growth in nine years.

The company, which reports in U.S. dollars, had a net loss for the quarter ended June 30 amounting to $14.8 million, or 46 cents per share, compared to an income of $11.4 million, or 35 cents per share in the second quarter of 2017.


The second-quarter results included higher tax rates than in the year-ago quarter and expenses related to restructuring and a number of other one-time items.

On an adjusted basis, however, the company reported an income of 39 cents per share, beating analyst expectations of 27 cents per share, according to Thomson Reuters Eikon.

Revenue rose two per cent to $623.2 million as seven per cent growth in its sports segment offset a more modest decline in sales in its home and juvenile segments.

Positive results in the company’s U.S. juvenile division were offset by an overall disappointing quarter, largely due to difficulty implementing a warehouse management system in Europe that caused it to miss sales and its Chilean segment in the midst of a turnaround.



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