Georgia company results highlight coronavirus spread through economy

Atlanta-based WestRock, which makes paper and packaging, was formed by the combination of Rock-Tenn and MeadWestvaco. (2017 file photo Matt Kempner/AJC)
Atlanta-based WestRock, which makes paper and packaging, was formed by the combination of Rock-Tenn and MeadWestvaco. (2017 file photo Matt Kempner/AJC)

Impact felt from children’s clothing to cardboard, carpet to cars

Large Georgia-based companies delivered the same message Tuesday with their quarterly results: The coronavirus seems to have spared no corner of the economy.

Children’s clothing retailer Carter’s lost $79 million in the first three months of 2020, after posting a $61 million profit a year earlier. Revenue dropped 12%.

“The global pandemic has meaningfully disrupted the lives of families with young children,” CEO Michael Casey said in a news release. “It began to impact our Company’s performance in March and will weigh on the growth we had planned this year.”

Atlanta-based Carter's closed its own stores March 19 and stopped paying in-store employees on April 6, though it has continued to sell its namesake and OshKosh B'Gosh products online and through Walmart and Target. It declined to forecast results for the remainder of 2020 due to uncertainty surrounding the coronavirus.

Consumers have drastically slowed purchases of new cars and, because many are working from home, have incurred fewer service problems. Asbury Automotive Group in Duluth said February sales at its 83 dealerships nationwide were “very strong” but fell in March when COVID-19 hit. Total revenue fell 4% and gross profit declined 2% in the first quarter from the year before.

Asbury furloughed 2,300 employees, reduced employee pay and canceled a $1 billion acquisition agreement for a Texas dealership group. Asbury also sold its Nalley Nissan dealership on I-285 in February (the dealership is now known as Mike Rezi Nissan) and sold all its dealerships in Mississippi in March.

WestRock, which makes cardboard boxes and containerboard products used in shipping, reported that sales dropped 4%. The Atlanta-based company has slashed capital expenses and executive compensation and postponed the payment of $120 million in employment taxes to compensate for the weaker economy.

AGCO, which makes Massey Ferguson farm equipment, said production was disrupted in China and Europe in March due to supply chain problems, though most of those facilities have since returned to nearly full capacity. Still, the Duluth company's sales dropped 3% and profit was flat.

North American results were a bright spot for AGCO, as revenue rose 11% on higher sales of high-horsepower tractors, planting and hay equipment. Most of AGCO’s equipment sold in the U.S. is made in U.S. facilities.

Late Monday, Calhoun-based carpet manufacturer Mohawk Industries said sales fell 6%, largely on reduced business in the residential remodeling segment. Mohawk has reduced production at its plants and furloughed and laid off employees.

Mohawk did report a bright spot—an uptick in do-it-yourself projects as more people telework.

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