By Connor Hart

Mohawk Industries warned that tariffs could hurt its future results as it logged lower profit and revenue in the first quarter.

The Calhoun, Ga., flooring manufacturer receives a significant portion of its luxury vinyl tile from China, Chief Executive Jeff Lorberbaum said. He also noted that the company relies on its "substantial domestic operations" to produce materials.

At current rates, Lorberbaum estimates the company will incur annual costs of about $50 million stemming from tariffs, which it will look to alleviate through price increases and supply chain adjustments. He added that the company increased inventory levels in preparation of the tariffs being implemented.

"In addition to the direct impact of the shift in global trade policy, the tariffs are likely to influence consumer, new construction and business spending in both the U.S. and abroad, though the extent is unpredictable at this time," Lorberbaum said.

The outlook came as Mohawk posted a profit of $72.6 million, or $1.15 a share, for its three months ended March 29, compared with $105 million, or $1.64 a share, in last year's comparable quarter.

Adjusted per-share earnings of $1.52 topped the $1.41 that analysts polled by FactSet expected.

Revenue fell 5.7% to $2.53 billion, roughly in line with analyst estimates.

Lorberbaum said sales were relatively flat and that the recent quarter's results were hurt by two fewer shipping days and foreign exchange headwinds.

"Across our markets, conditions in the first quarter weakened sequentially, with residential remodeling still the slowest sector," he said. "Consumer confidence has fallen as individuals have grown increasingly anxious about their future prospects."

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

May 01, 2025 16:59 ET (20:59 GMT)

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