Caesarstone Sets Third-Quarter Record
MP MENASHE, Israel – Surface manufacturer Caesarstone reported a record $163.3 million in revenue during this year’s third quarter, but rising costs – and product prices — may temper any spectacular growth in the near future.
The Israeli maker of quartz surfaces and large-format porcelain slabs showed net income of $5.8 million for the three months ending on Sept. 30, with substantial gains in its U.S. business.
“We achieved yet another period of record quarterly revenue and our fourth sequential quarter of year-over-year revenue growth attributable to increasing demand for our best-in-class products across the U.S. and a majority of our global markets,” said company CEO Yuval Dagim in a Nov. 3 conference call with securities analysts following the release of third-quarter financial data.
Caesarstone noted revenues of $79 million in the United States during 3Q this year, representing slightly more than 48% of the company’s worldwide total.
Third-quarter U.S. business grew this year by 51.6% from the same period in 2020, which Dagim credited to big-box store sales, core business strength and the Omicron acquisition late last year.
“Our sales of Caesarstone-branded slabs for U.S. Home Depot stores continued to be a bright spot, as revenue increased nearly 50% year-over-year,” he said. “We are also happy that our sales to IKEA U.S. recovered substantially during the quarter.”
He added the company’s purchase of Omicrom, with its presence in Florida and the Ohio River valley, bode well, as “geographic and service benefits from this acquisition have been very encouraging, and we could not be more pleased with the integration efforts of our teams.
Caesarstone’s Canadian revenues of $22.4 million in 3Q 2021 showed a 17.2% increase from the same time last year.
Dagim also acknowledged supply-chain and raw-material concerns, although he also noted the company mitigated both with “careful cost management” and price increases for Caesarstone products.
“We have been able to offset some of the rising costs through the price increases that went into effect during 2021, and we recently announced additional price increases in most of our territories to be implemented on Jan. 1,” Dagim said.
Nahum Trost, Caesarstone CFO, noted in the conference call that the company “experienced material impact from rising costs in the third quarter of 2021, particularly in the polyester and shipping prices.”
“We continue to diligently monitor cost trends,” he added, “and although we are taking actions to partially offset the rising costs, we do expect widespread global shipping challenges and rising inputs cost to continue to weigh on our margins in the coming quarters with gradual improvement during 2022 as we realize the price increases in our markets.”
The company declared a dividend of 10¢ per share for those shareholders of record as of Nov. 17.
Caesarstone is traded on the NASDAQ under the CSTE symbol.
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