Dorel take US$12.5 million Q1 impairment charge due to Toy ‘R’ Us liquidation
In addition, the company says its profitability was hurt by a shift from its stores to online purchases in Chile, production challenges at a Chinese factory, high raw material prices, restructuring costs at its sports division and investments in technology in home furnishings.
The Montreal-based company, which reports in U.S. dollars, said Friday it earned US$4.7 million of 14 cents per diluted share in the period ended March 31, down from $8.8 million or 27 cents per share in the year-ago quarter.
Excluding the impact of Toys “R” Us and other items, Dorel said its adjusted net income was $15.0 million or 46 cents per diluted share for the quarter compared with $22.7 million or 69 cents per diluted share for the first quarter of 2017.
Revenues were $642.3 million compared with $646.7 million a year earlier.
Toys “R” Us stocks toddler beds, car seats, strollers and nursery furniture from Dorel.
Toronto-based Fairfax Financial Holdings Ltd. was the successful bidder for the 82 Toys “R” Us stores in Canada, which filed for creditor protection in September, a day after the U.S. division filed for bankruptcy.
In January, Toys “R” Us announced it would also close 180 stores in the U.S. in the coming months.