Business news :Dorel Industries's Sales to Mass Channel Lifted Bike Sales in Third Quarter

Dorel Industries reported that its Recreational/Leisure segment increased net sales 9.1 percent in the third quarter ended Sept. 30 driven primarily by shipments to the mass market channel. For the year-to-date, both the IBD and mass market channels have increased sales.

Excluding the impact of foreign exchange variations on the segment's non-US based businesses, the segment's organic revenue increase was approximately 11 percent for the quarter and 8 percent year-to-date.

Operating profit for the segment improved US$2.5 million, or 25 percent, to US$12.5 million. For the nine months, operating profit was up US$6.4 million or 13.1 percent to US$55.5. Contributing to the improvement in operating profit was the on-going turnaround at SUGOI. Last year the apparel division lost US$2.2 million during the third quarter, whereas the changes implemented thus far this year resulted in a breakeven situation during the most recent quarter.

The segment's divisions were front and centre at the year's two most important bike shows, held in Europe and in the U.S. Several new Cannondale models were launched for 2013 and Cannondale was the recipient of three Eurobike 2012 awards. Cycling Sports Group (CSG) used the U.S. show to announce the launch of the new GURU Experience, an advanced personalized bike fitting and consultative retail system that will help consumers reach their peak performance and will further position CSG as the go-to bike company.

Recreational/Leisure Segment

Third Quarters Ended September 30
	2012		2011
	$	% of rev.	$	% of rev.	Change %
Total revenue	228,953		209,823		9.1%
Gross profit	55,295	24.2%	47,055	22.4%	17.5%
Operating profit	12,516	5.5%	10,008	4.8%	25.1%
Nine Months Ended September 30
	2012		2011
	$	% of rev.	$	% of rev.	Change %
Total revenue	701,782		659,344		6.4%
Gross profit	176,918	25.2%	158,642	24.1%	11.5%
Operating profit	55,502	7.9%	49,053	7.4%	13.1%

The company said it expects operating profit for all three of its operating segments, which include Home Furnishings and Juvenile, to continue through the rest of 2012, led by revenue and earnings growth in Juvenile and Recreational / Leisure. Partially offsetting these gains will be lower operating profit in Home Furnishings as that segment continues to face a challenging retail environment given conditions in the housing market.

“While the other two segments face a similar environment, they are well positioned in their various markets to meet these challenges and it is anticipated these segments will better last year's results," said Dorel President and CEO Martin Schwartz.

( Source Dorel media and SportsOneSource )