TD Securities has adjusted their price target on Dorel Industries (DIIBF, Financial), reducing it from C$2 to C$1.25. Despite the revision, the firm maintains a Sell rating on the company's shares. This decision reflects their assessment of the company's current performance and future outlook.
DIIBF Key Business Developments
Release Date: May 12, 2025
- Revenue Decrease: $30 million or almost 9% decrease in revenue for the first quarter.
- Organic Revenue Decline: Approximately 7% decline after removing foreign exchange variations.
- Gross Profit Decrease: $8.1 million decrease in gross profit.
- Gross Margin Decrease: 60 basis points decrease as a percentage of revenue.
- Operating Loss: $14 million operating loss compared to $7.7 million last year.
- Financing Expenses: $9.4 million, comparable to last year.
- Juvenile Segment Revenue Growth: $3.2 million increase in revenue.
- Juvenile Segment Organic Revenue Growth: 4% improvement after removing foreign exchange effects.
- Juvenile Segment Operating Profit: $3 million compared to $0.5 million last year.
- Home Segment Revenue Decline: 33% decline in revenue.
- Home Segment Gross Profit Decline: $10.5 million decrease in gross profit.
- Home Segment Gross Margin: 1.2%, indicating excessive overhead.
- Home Segment Loss: $7.9 million loss.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dorel Juvenile achieved its eighth consecutive quarter of year-over-year organic revenue growth, led by the Maxi-Cosi brand.
- The weakening of the US dollar against major currencies positively impacted earnings.
- Dorel Juvenile's new product introductions, such as the Maxi-Cosi Fame stroller and Coral Slide Pro car seat, have been well-received in the market.
- The company has improved its ability to adapt products to meet local safety standards, enhancing global product success.
- Dorel Juvenile's market in Chile and Peru showed significant improvement, posting a profitable quarter for the first time since 2023.
Negative Points
- Dorel Home faced a challenging quarter with e-commerce sales significantly below expectations.
- The company is undergoing restructuring in the Home segment due to lower-than-expected sales and margins.
- Tariffs on Chinese imports have created uncertainty and impacted the company's ability to ship products.
- The Home segment experienced a 33% decline in revenue, primarily due to reduced e-commerce sales.
- The company's gross margin decreased by 60 basis points, largely driven by the underperformance of the Home segment.
