The IBD channel drove revenue for Dorel Sports, owner of CSG, GT and Cannonale.
However foreign exchange rates impacted on Dorel Sports Q3 revenue, which remained flat at US$266.5 million. After removing the impact of foreign exchange year-over-year revenue was up approximately nine per cent.
Dorel Sports said the main drivers of the increased revenue were in the independent bike dealer (IBD) channel due to increased demand of 2016 “higher margin bicycles”.
Electric bike sales grew in the US mass market channel, while Brazil’s Caloi saw sales grow thanks to “strong brand equity in the lower price point category”.
Nine month revenue decreased 5.9% to US$746.5 million. Organic revenue increased approximately 2%, after removing the impact of varying foreign exchange rates year over year.
Third quarter adjusted operating profit of US$10.8 million was down US$9.3 million, or 46.3%.
Year to date adjusted operating profit was US$32.8 million, a decline of 40.8% compared to last year. The net negative impact of foreign exchange for the first nine months was approximately US$24 million.
Dorel Sports financials highlighted Cannondale’s 2015 Eurobike Gold Award for Best Road Race Bike (for the new Slate Force CX1) as well as the brand’s success at Interbike for the Road Bike of the Year award, for the SuperSix EVO Carbon Force Racing Edition.
Dorel president & CEO Martin Schwartz said: “Despite challenges through much of 2015, Dorel Sports will turn the corner in the fourth quarter with increases over last year in both sales and earnings.
"Considerable changes have been made in the segment, new pricing has been implemented on 2016 model year bicycles and Dorel Sports has launched its largest ever number of new bicycle platforms. These new investments will pay off with the start of a new positive trend going forward. Foreign exchange remains unpredictable, however the segment is in a stronger position to face this issue."
Schwartz added: “The third quarter was characterized by another exceptional performance in our Dorel Home Furnishings business as well as continued currency headwinds which affected both Dorel Juvenile and Dorel Sports. To mitigate the currency issues, which amounted to approximately US$14 million in the quarter, both segments are successfully implementing selective price increases and are introducing new products at better margins.
"Despite current conditions in Brazil, we remain solidly committed to Dorel Sports’ Caloi business. There is excellent market potential with our portfolio of bicycle brands to serve the world’s fifth largest population. Our plan is to maximize cash flow while the economy recovers, placing us in an excellent position to benefit once things return to normal."