Shares of Mohawk Industries Inc.
MHK,
shed 5.2%, enough to pace the S&P 500’s premarket decliners, after the residential and commercial floorings company cut its fourth-quarter profit outlook, as continued high inflation and lagging consumer confidence led to weakened demand. The company said late Monday that it now expects fourth-quarter adjusted earnings per share of between $1.27 and $1.31, which is down from guidance provided in late-October of $1.40 to $1.50, and below the current FactSet consensus of $1.44. “[D]emand in Flooring North America weakened more than the other segments, which led to actions to reduce its inventory levels,” the company said in a statement. “The combination of the lower volume, plant shutdowns and the consumption of higher cost carpet inventory decreased the segment’s financial performance for the quarter.” Separately, the company said it will pay $60 million to settle a class action lawsuit against the company filed in January 2020, of which a significant portion is covered by insurance. The company said it will also pay EUR3 million ($3.25 mln) to settle a tax dispute with the Belgian Tax Authority. Mohawk’s stock has run up 22.9% over the past three months through Friday while the S&P 500
SPX,
has gained 8.7%.
