MONTRÉAL (BRAIN) — Dorel Industries Inc., parent of Schwinn, Cannondale and other brands, has suspended its dividend and says its third quarter results will be harmed by increased U.S. tariffs on Chinese bikes, furniture and other goods Dorel sells.
Dorel will announce full third quarter results on Nov. 8.
The company said the tariff increase to 25% in May “is having a much greater impact on the business than the original implementation of 10% introduced a year ago.”
On the news Tuesday, Dorel’s stock fell 23% to its lowest price since 1996, $7 Canadian ($5.28).
“The impact of the (tariff) increase on Dorel businesses was still unclear at the end of the second quarter. We raised prices midway through the third quarter and this has had several negative consequences,” said Dorel’s president and CEO, Martin Schwartz.
“Not all competitors nor retailers raised prices at the same time or rate. Retailers have also changed their buying routines. New price points have caused some consumers to opt for different items creating a considerable product mix imbalance. As well, elevated warehousing costs are still being incurred as the shift in demand has delayed our inventory balancing program. The net result of these challenges is that Dorel …read more