Troy, Mich.-based Horizon Global, a supplier of branded towing and trailering equipment, reported that net sales during its second quarter decreased $10.2 million, or 4.4%, to $223.2 million from prior year comparable period. According to the company, the decline was mainly attributable to unfavorable foreign currency translation.
Other highlights showed:
• On a constant currencyn basis, net sales decreased 1.3%.
• Operating profit of $7.1 million, or 3.2% of net sales; an improvement of $71.2 million over prior year. comparable period, primarily due to a $55.7 million goodwill impairment charge recorded in second quarter 2018.
• Adjusted operating profit of $10.1 million, or 4.5% of net sales; a decrease of $3.7 million from prior year comparable period.
“We experienced a slow start to the year, which continued in the second quarter, resulting in a modest decrease in sales, but our team remains focused on returning Horizon Global to its historical performance levels,” commented President and Chief Executive Officer Carl Bizon. “In addition to foreign currency headwinds, our results were also impacted by the continuing uncertainty surrounding tariffs and their impact on the entire global supply chain.
“We have been consistent in our efforts to recover the costs associated with tariffs and the timing may not be immediate. In this environment, it is important that we remain flexible and responsive to the ever-evolving conditions as we work to overcome short-term issues and set the stage for stronger performance over the long term.”
The company’s Horizon Americas segment reported that net sales for the quarter were essentially flat at $108.9 million. E-commerce and OE net sales increased $4.9 million and $3.9 million, respectively, while net sales in the retail, aftermarket and industrial channels slowed, and were $7.6 million lower than the prior year comparable period on a combined basis.
Management believes the slow start to the prime selling season was caused by unusually wet and cold weather in parts of the country, which was a contributing factor to results in the quarter. As a result, adjusted operating profit decreased to $9.8 million, or 9% of net sales, as compared to $10.6 million, or 9.8% of net sales, during the prior year comparable period.
Bizon noted, “The Americas continued to hold its own and our Europe-Africa team made progress on its ongoing business improvement initiatives. From a macro perspective, the broader European market has been relatively stable, with some pockets of softening demand related mainly to the U.K. market and uncertainty surrounding Brexit, and in what has become a common and recurring theme, our Asia-Pacific segment continued to deliver incredibly strong margins.”