Mohawk Industries (MHK Q1 2022 Earnings Call Transcript

For the period ending April 2, 2022

April 29, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. My name is Charlotte, and I will be your conference operator today. At this time, I would like to welcome everyone to Mohawk Industries' First Quarter 2022 Conference Call. [Operator Instructions]. As a reminder, ladies and gentlemen, this conference is being recorded today, Friday, April 29, 2022. Thank you.

I would now like to introduce Mr. James Brunk. Mr. Brunk, you may begin your conference.

James Brunk

Thank you, Charlotte. Good morning, everyone, and welcome to Mohawk Industries' quarterly investor call. Joining me on today's call are Jeff Lorberbaum, Chairman and Chief Executive Officer; and Chris Wellborn, President and Chief Operating Officer. Today, we'll update you on the company's first quarter performance and provide guidance for the second quarter.

I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including, but not limited to, those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include discussion of non-GAAP numbers. For a reconciliation of any non-GAAP to GAAP amounts, please refer to our Form 8-K and press release in the Investors section of our website.

With that, I'll turn the call over to Jeff for his opening remarks. Jeff?

Jeffrey Lorberbaum

Thank you, Jim. Mohawk's performance in the first quarter exceeded our expectations. Sales in the quarter rose to an all-time record of $3 billion, up 13% as reported or approximately 17% on a constant currency and days basis. Our sales momentum continued from the fourth quarter, reflecting higher pricing, growth in our ceramic businesses, an improving commercial sector and benefit from our small acquisitions. Our operating income exceeded our forecast as strength in the global ceramic business offset rising European energy costs, improved operational efficiencies, enhanced Flooring North America's results and our management of European market pressures benefited Flooring Rest of the World.

During the quarter, we ran our operations at high levels in most markets to address order backlogs and replenish inventory. During the past year, rapid cost escalations have required multiple pricing actions to pass through. We've implemented these unprecedented increases across our markets and have also announced additional increases across the businesses as inflation continues to rise. We're also controlling SG&A spending, enhancing operational efficiencies and introducing new features.