Price Hike Due for Mohawk Rugs

By Cecile B. Corral -- Home Textiles Today, 4/23/2007 12:00:00 AM

Calhoun, Ga. —

In its first-quarter conference call, Mohawk Industries said it is seriously considering passing along raw material price hikes to customers of its soft flooring products, which includes the Mohawk Home division.

Jeffrey Lorberbaum, chairman and ceo, said during the company's first-quarter earnings call that if climbing costs for oil-based raw materials and chemicals used to produce its soft flooring products "continue like they've been at the moment, most likely we'll attempt to pass those through to our customers at the right moment in time."

When asked by an analyst if the price increases will kick in during the second quarter, Lorberbaum said Mohawk has not yet made a decision on the timing. "We haven't made a decision as to when. It's a fluid market and we're still gathering information," he said, adding that Mohawk has employed promotional activity over the past few quarters to help alleviate the raw material price hikes. "We have shown reasonable discipline in how we are going about it and so we don't collapse the entire pricing structure of our products."

Carpeting was a poor performer for the company during the quarter. Lorberbaum said assortments are shifting: polypropylene and staple nylon are decreasing, but polyester and filament nylon are increasing.

Mohawk Industries reported quarterly net earnings of $90 million, up 14% from last year. Net sales of $1.86 billion were down 3% from the same period a year ago.