Dalton, Georgia-based flooring manufacturer Dixie Group reports a quarterly loss

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Dixie Group shares fell more than 10.5% Monday after the Dalton, Georgia-based flooring maker posted a net loss of nearly $4.5 million, or 29 cents a share, on revenue of $83.7 million. Dollar reported in the second quarter.

The quarterly loss reported Monday brought Dixie’s net loss for the first half to over $7.8 million, or 51 cents a share, compared to net income of $1.3 million, or 8 cents a share, for the first half of 2021.

Dixie said net sales fell 7% in the first half of 2022, “primarily due to a $7 million loss in sales year-over-year at our largest bulk retailer customer,” company president Dan Frierson said.

“Our sales with this customer ended in the first quarter of 2022 as a result of their change in strategy to focus on lower price point products,” he said.

Despite the loss, Frierson said, “We are pleased to announce our formation of a joint venture to begin production of luxury vinyl flooring at our Atmore, Alabama manufacturing facility. This domestic production will enable us to better serve our customers and respond more quickly to market changes,” he said.

Similar to the first quarter, Frierson said gross margins in the second quarter of 2022 were impacted by rising raw material costs and “dramatic increases in ocean freight costs.”

“Fortunately, these freight charges have continued to decrease since the end of the first quarter, but remain well above last year’s levels,” Frierson said.

During the second quarter, Dixie introduced its new 1866 Masland and Décorby Fabrica decorative segment programs, which include 30 new styles, a brand refresh and updated merchandising. The new styles hit retail stores late in the second quarter and more products will be available in the third quarter.

But Dixie said in its earnings release that the company sees “continued market weakness” in the current quarter as orders were below year-over-year levels.

Dixie shares fell 18 cents a share to close at $1.53 a share on the Nasdaq stock exchange on Monday.

The Dixie Group announced Monday that its board of directors has authorized up to $3 million in buybacks of the company’s stock. It is expected that a portion of these purchases would be completed under a Rule 10b-5-1 plan under the Securities and Exchanges Act.

— Compiled by Dave Flessner

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