Dorel Class B (DO4B) Q2 2026 Earnings Report

The call presents a mixed picture. There are clear operational positives: strong international growth in Juvenile, product innovation and brand recognition, improvement in underlying gross margin excluding restructuring, and a profitable Costco-led Home model. At the same time, the company reported sizable year-over-year revenue declines (consolidated -14.7%; Home -46.4%), continued reported operating losses, meaningful FX headwinds, higher finance expenses, and ongoing legacy costs from the Home restructuring. Management described actionable restructuring steps and expects improvement in the back half of the year, but near-term results were materially impacted by exits, FX, and U.S. softness. Overall, the positives and negatives are balanced.

The company guided to improving profitability and cash generation over time, saying Dorel Juvenile expects improved earnings in the U.S. and Europe (driven by significant new product launches in Q3–Q4 and additional launches in Q1–Q2 next year) after a July uptick in U.S. sales, while Dorel Home has been reshaped around a Costco-led model (roughly 70% of current Home), with Costco profitable in Q2 and expected to remain profitable for the rest of the year and Notio forecast to contribute positively to H2; management said the go‑forward Home revenue base is just under $200 million and that legacy costs will continue to weigh on Home through the second half but should decline over time. For context, Q2 consolidated revenue fell $42.9M (14.7%) with organic revenue down 16.9%, consolidated operating loss was $24.3M (reduced to a $5.3M loss excluding restructuring and to a $1.5M positive result when FX is adjusted), Juvenile Q2 revenue was $209M (down 3.9%, organic -6.8%) with a 27.9% gross margin (down 110 bps), Home sales fell 46.4% with a Q2 loss of $11.3M (adjusted operating loss $6.5M), finance expenses rose to $17.0M (cash interest $11.1M, noncash $5.9M).