Shares of Mohawk Industries Inc. (NYSE:MHK) fell 23.9% on Friday after the flooring manufacturer announced disappointing third-quarter 2018 results.
More specifically, Mohawk's quarterly net sales climbed 4% year over year (5% at constant currencies) to $2.55 billion, translating to a 12% decline in adjusted net earnings to $246 million, or $3.29 per share. Analysts, on average, were looking for earnings of $3.58 per share and sales of $2.6 billion.
"Our third-quarter results fell short of our expectations," Mohawk chairman and CEO Jeffrey Lorberbaum stated. "Sales growth in all segments was lower than our estimates, price increases had less impact, and we experienced more inflation than predicted."
To make matters worse, transportation costs climbed with higher fuel prices and limited carrier availability, and the company had to reduce manufacturing further to control inventory in response.
Lorberbaum added that "softening market conditions, significant inflation, and declining product mix are hurting our results," though he also believes the company will be able to improve its performance with product and pricing adjustments. In the meantime, Mohawk's board offered a vote of confidence by approving a new $500 million share repurchase program.
However, considering this is the second such post-earnings plunge in as many quarters with many of the same culprits -- recall Mohawk shares dropped 17.5% after its Q2 release in July -- it's no surprise to see the stock falling hard again today.