Dorel Reports Second Quarter 2025 Results

Dorel Juvenile delivers solid earnings performance led by growth in international markets

Dorel Home implementing restructuring strategy amidst a challenging market

Dorel Industries Inc. announced its financial results for the second quarter and six months ended June 30, 2025.

Second quarter revenue was US$292.4 million, compared to US$348.1 million, a decrease of 16.0% from the same period a year ago. Reported net loss was US$44.9 million or US$1.38 per diluted share, compared to US$59.5 million or US$1.83 per diluted share last year. Adjusted net loss¹ was US$21.1 million or US$0.65 per diluted share compared to US$13.6 million or US$0.42 per diluted share last year.

Revenue for the six months was US$612.8 million, compared to US$699.1 million, down 12.3% from the prior year. Reported net loss was US$70.2 million or US$2.15 per diluted share, compared to US$77.1 million or US$2.37 per diluted share a year ago. Adjusted net loss¹ for the six months was US$44.8 million or US$1.37 per diluted share, compared to US$30.5 million or US$0.94 per diluted share last year.

“Dorel Juvenile delivered a strong second quarter in 2025, building on the momentum from the start of the year, and overcoming the challenges posed by U.S. tariffs. Our performance was driven by strong growth in Europe and key international markets, disciplined cost control and favourable foreign exchange movements. Dorel Home experienced a difficult second quarter with tariff uncertainty and liquidity constraints impeding sales. On June 30th, 2025, we announced our expanded restructuring plan and are actively implementing changes to reduce costs and further streamline operations. We remain confident that the benefits of our Home segment transformation will begin to emerge in the fourth quarter of this year, with full impact expected in 2026,” stated Dorel President & CEO, Martin Schwartz.

Dorel Juvenile

Second quarter revenue was US$218.1 million, an increase of US$1.6 million, or 0.8% versus last year. Organic revenue¹ decreased slightly by 0.4%, after removing the impact of varying foreign exchange rates year-over-year. The growth in the second quarter came from markets other than the U.S. which faced headwinds from tariff-related market instability. Many U.S. customers paused orders as they waited for clarity on the long-term strategy of the U.S. administration on tariff rates. Excluding the decline in revenue in the U.S. market Dorel Juvenile experienced revenue growth of approximately 12% for the quarter. This slow down meant that year-to-date revenue of US$433.9 million, represented an increase of US$4.8 million, or 1.1% from US$429.1 million in 2024. The year-to-date organic revenue¹ increase was approximately 1.8%.

Adjusted operating profit¹ for the quarter was US$7.8 million, US$1.0 million higher than the prior year. Dorel Juvenile Europe was the principal contributor to the improved earnings, more than offsetting the impact of lower sales and earnings in the U.S. Earnings were also helped by favourable foreign exchange rates versus the prior year. Year-to-date adjusted operating profit¹ was US$12.0 million, an increase of US$4.0 million or 50.6% versus prior year. Similar to the quarter, Dorel Juvenile Europe was the principal contributor to improved earnings, offsetting declines in the U.S. The majority of the other Juvenile markets have also increased earnings year-to-date versus the prior year as the Juvenile segment overall continues to grow sales and earnings.

Dorel Home

Second quarter revenue was US$74.3 million, a decrease of US$57.3 million, or 43.5%, from US$131.6 million last year. The decline was driven primarily by reduced e-commerce gross sales, which declined approximately 51%, and ongoing product availability issues stemming from liquidity constraints and tariff uncertainty. Brick-and-mortar and omni-channel sales accounted for approximately 56% of gross sales in the quarter, up from approximately 49% in the same period last year, reflecting a strategic shift in channel focus. Six-month revenue was US$178.9 million, a decrease of US$91.1 million, or 33.7%, from US$270.0 million last year.

The adjusted operating loss¹ for the quarter was US$12.7 million, compared to US$8.3 million in the same period last year. The principal cause was lower sales volumes which more than offset the benefit of a lower cost structure that was part of the initial restructuring program implemented prior to the June 30^th, 2025 announcement of further cost reduction initiatives. Year-to-date adjusted operating loss¹ was US$23.9 million versus US$11.7 million in the prior year. Despite these pressures, the Home segment generated significant free cash flow in the second quarter, primarily through inventory reductions and improved accounts receivable collections. 

In response to these and other challenges, Dorel announced an accelerated restructuring plan on June 30^th, 2025, including the decision to cease manufacturing operations at its Cornwall, Ontario facility. It is expected that the wind-down of these operations will be completed by the end of the third quarter of this year to minimize losses and fulfil customer obligations. This decision is part of a broader transition to a leaner organization with a reduced product line, focused on profitable categories. The segment will operate with a reduced footprint and integrate back-office operations into Dorel Juvenile’s infrastructure. The Home segment is actively working on exiting product categories that are now considered non-core, including a plan to significantly reduce inventory by the end of the year, thereby allowing for a smaller distribution footprint. Warehouse consolidation efforts are underway, with Canadian and California operations transitioning into Dorel Juvenile facilities. The Company is also finalizing its East Coast distribution strategy.

During the quarter, the Home segment recorded restructuring costs of US$22.4 million, of which US$13.2 million was for the non-cash write-down of equipment and inventory. The remaining amount of US$9.2 million was for accrued severance costs, the majority of which is to be paid out after the closure of the Cornwall manufacturing operations at the end of the third quarter of this year. The benefits of the Cornwall, Ontario, manufacturing facility closure will begin only in the fourth quarter of this year, however included in the severance amount were other headcount reductions initiated in May, generating US$0.8 million in monthly savings beginning in June 2025.

Long-Term Debt and Financing Update

On August 7, 2025, the Company announced it again amended its asset backed loan facility and term loan facility whereby Dorel’s lenders agreed to continue to forebear from enforcing their rights and exercising their remedies under both the ABL facility and term loan facility further to a default by Dorel relating to certain financial covenants. As part of the amendment, the Company will receive access to US$20.0 million additional liquidity under the ABL facility, available in three tranches subject to meeting availability requirements, in order to finance new inventory and must continue to provide the lenders with additional reporting during the forbearance period.

Also as previously announced, the Company has engaged two leading capital market advisors to assist in re-capitalizing the Company’s balance sheet to allow for growth in the Juvenile segment and support the re-organization of the Home segment. The new structure will replace the current debt structure which no longer matches the Company’s needs. As of today, the process has advanced, and the Company expects a new structure to be in place around the end of the third quarter of this year.

Outlook

“Despite the challenges of U.S. tariffs, the Juvenile segment is well positioned relative to competitors based on its worldwide footprint and domestic manufacturing capabilities in the U.S. This was evidenced in the second quarter as reduced earnings in the U.S. were more than offset by improved earnings in our other markets. With our facilities in the U.S., which could present further opportunities going forward, and our strong international business, we expect to continue to improve earnings and remain on track for a better 2025 versus 2024. Dorel Home is entering a pivotal phase in its transformation journey, with the second half of 2025 focused on executing the structural changes initiated this year. We are confident that the actions taken, streamlining operations, integrating with Dorel Juvenile, and transitioning to a more agile distribution model, will position us for a return to profitability in 2026,” commented Dorel President & CEO, Martin Schwartz.

“The Company continues to work with key customers and suppliers to maintain strong relationships during this period of transition and we are appreciative of that support. We are on track to secure additional financing, and when we do this added liquidity will mean a much healthier Dorel on day one. This will coincide with our reduced cost structure in Dorel Home, and with our on-going growth in Dorel Juvenile, we will have the ability to better serve our customers and work even more closely with our key suppliers,” concluded Mr. Schwartz.

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About Dorel Industries Inc.

Dorel Industries Inc. (TSX: DII.B, DII.A) is a global organization, operating two distinct businesses in juvenile products and home products. Dorel’s strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. Dorel Juvenile’s powerfully branded products include global brands Maxi-Cosi, Safety 1st and Tiny Love, complemented by regional brands such as BebeConfort, Cosco, Mother’s Choice and Infanti. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$1.4 billion and employs approximately 3,900 people in facilities located in twenty-two countries worldwide.

Contact:

Jeffrey Schwartz – Media Contact – (514) 934-3034

Source: Dorel Industries Inc.