Dorel Industries Inc – the recreation, furniture and baby products giant that owns brands such as Cannondale and GT – has released its results for the first quarter ended 31 March 2011. Total revenue reached US$607.8 million, up 1.9% from US$596.3 million a year ago.
“A highlight of the first quarter results is the momentum of the company’s bicycle business, particularly in the IBD channel,” said Dorel CEO and President Martin Schwartz.
The US$18.8 million or 10.3% increase in Dorel’s Recreational/Leisure sales division was entirely organic with operating profit improving by 17.9%. Revenue growth was above 25% in the IBD channel as the momentum created last year with the introduction of the well-received 2011 new model year product line continued into this year’s first quarter.
Sales growth was in all markets, but was strongest for the Cannondale and GT brands in Europe and Australia. The Cannondale dealer base continues to grow due to innovation and brand building. Sales in the segment’s mass merchant category declined mid-single digits, due in part to poor weather and the late Easter holiday period.
The Liquigas-Cannondale pro-cycling team is currently competing in the Giro d’Italia which runs until May 29. As Dorel notes in its company results, the Giro is one of the world’s three Grand Tours and will provide outstanding visibility for the Cannondale brand. Dorel is a co-title sponsor of the renamed ‘Liquigas-Cannondale’ race team, which came first in the 2010 Giro.
In Recreational/Leisure, the solid start to the year is expected to continue with an overall improved performance over 2010. Dorel has invested heavily in its bicycle brands and coupled with the enthusiastic acceptance of new models, growth is occurring in the IBD dealer network. The company is optimistic for the balance of the year in its mass merchant channel as point-of-sale activity has improved in recent weeks.
“Despite the current short-term challenges we are not wavering from our commitment to new product development in all our segments. We realise that to successfully navigate an environment of rising costs and prudent consumers, we need to promote our brands and bring new exciting products to market that will create demand, allowing us to improve profitability,” Schwartz added.