Dixie Group Reports $62.99 Million in Q1 2025 Sales, Net Loss Decreases

The Dixie Group, Inc. reported a net sales figure of $62.99 million for the first quarter of 2025, reflecting a decrease of 3.5% from $65.25 million in the same period of the previous year. The company's gross profit increased to $16.90 million, up from $15.81 million, resulting in a gross profit margin of 26.8%, compared to 24.2% in the prior year. Despite the decline in sales, the company achieved an operating income of $11,000, a significant improvement from an operating loss of $857,000 in the first quarter of 2024. The net loss for the quarter was $1.70 million, or $0.12 per share, compared to a net loss of $2.49 million, or $0.17 per share, in the prior year.

In terms of operational changes, Dixie Group's total current assets rose to $105.64 million as of March 29, 2025, compared to $95.84 million at the end of 2024. This increase was primarily driven by a rise in receivables, which increased to $27.94 million from $23.33 million. However, current liabilities also increased significantly, reaching $103.76 million, up from $88.72 million, largely due to a rise in accounts payable and the current portion of long-term debt. The company’s total liabilities stood at $170.83 million, compared to $159.65 million at the end of the previous fiscal year.

Dixie Group has been actively managing its costs in response to ongoing inflationary pressures and a soft consumer demand environment. The company has implemented cost containment measures and productivity improvements, which have contributed to the higher gross profit margin despite lower sales. The company also reported a decrease in selling and administrative expenses as a percentage of net sales, which rose to $16.87 million, or 26.8% of net sales, from $16.37 million, or 25.1% of net sales, in the previous year.

Looking ahead, the company remains cautious about the impact of macroeconomic factors such as high interest rates and inflation on consumer spending and housing activity. The management believes that demand for flooring products may improve as interest rates decline, but acknowledges that the current economic conditions could continue to affect sales. The company is also monitoring trade policies and tariffs that could impact its cost structure and supply chain.

Dixie Group's financial outlook remains uncertain, with management indicating that while they have been able to obtain waivers for financial covenants in the past, future compliance may be challenging. The company has $54.5 million of outstanding indebtedness classified as current, raising concerns about its ability to meet obligations without additional financing or operational improvements. The company plans to continue focusing on cost reductions and exploring financing options to enhance liquidity and operational stability.