Mohawk Industries, Inc. (NYSE: MHK) announced a net loss of $760 million and a loss per share of $11.94 for the third quarter of 2023, including the impact of non-cash impairment charges of $876 million. The company’s current market capitalization, combined with the ongoing challenging macroeconomic conditions and higher discount rates, prompted a review of the company’s goodwill and intangible assets, resulting in the impairment charges. Adjusted net income for the quarter was $174 million and adjusted earnings per share (EPS) were $2.72, excluding impairments and other one-time expenses. Net sales for the third quarter of 2023 were $2.8 billion, a decrease of 5.2% as reported and 8.1% on a historical and constant currency and days basis compared to the prior year. In the third quarter of 2022, the company reported net sales of $2.9 billion, a net loss of $534 million, and a loss per share of $8.40. Adjusted net income for the quarter was $212 million and adjusted EPS was $3.34, excluding impairments and other one-time expenses.
For the nine-month period ended September 30, 2023, the company reported a net loss and a loss per share of $579 million and $9.10, respectively. Adjusted net income for the period was $462 million and adjusted EPS was $7.23, excluding impairments and other one-time expenses. Net sales for the first nine months of 2023 were $8.5 billion, a decrease of 6.2% as reported and 8.7% on a historical and constant currency and days basis compared to the prior year. For the nine-month period ended October 1, 2022, the company reported net sales of $9.1 billion, a net loss of $8 million, and a loss per share of $0.13; adjusted net income was $739 million and adjusted EPS was $11.56, excluding impairments and other one-time expenses.
Jeff Lorberbaum, Chairman and CEO of the company, commented on the third quarter results: „Our results for the quarter were in line with our expectations as our industry faced continued pressure in all regions, primarily due to lower investment in housing and ongoing consumer caution. Our third quarter results were seasonally impacted by the holiday period in Europe, which dampened our sales and earnings compared to the previous quarter. Lower material and energy costs offset the decline in price and mix. Additionally, we faced currency effects of approximately $20 million in operating income or $0.25 in EPS. Throughout the company, we benefited from cost reductions, productivity initiatives, and lower input costs. We managed our working capital well and generated strong free cash flow of $385 million in the quarter and $660 million year-to-date.“
During the quarter, central banks around the world continued to raise interest rates to cool the economy and lower inflation. Their actions are impacting the new and remodeling construction of residential and commercial buildings, leading to a deferral of spending on new projects. In the United States, mortgage rates have risen to the highest level in over two decades, putting pressure on the housing market and limiting renovation activity. In Europe, consumers are delaying larger purchases such as flooring due to higher energy costs, inflation, and uncertainty caused by the war in Ukraine. Our industry is more affected by this pressure than other sectors, as most flooring purchases can be deferred. With the high fixed costs associated with flooring manufacturing, competition is intensifying as the industry slows down and market participants try to increase their sales to maximize absorption. As a result, our average selling prices and product mix have declined, with the impact offset by lower material and energy costs, restructuring benefits, and process improvements.
The anticipated timing of the recovery in the real estate sector is further delayed, and we are managing our business to optimize our results and cash flow until then. We are taking actions to increase our volume while controlling margins and operating costs. We have introduced differentiated collections to the market, launched targeted advertising campaigns, and expanded our commitment to residential construction. To further improve our competitive position, we will close our older ceramic production in Italy and transition our LVT production in the US to a direct extrusion process. These restructuring initiatives will result in a one-time charge of approximately $55 million, of which $50 million is non-cash. Once completed, it is expected that they will improve our profitability by $30 million per year through increased productivity, lower manufacturing costs, and improved production flexibility.
Our European expansions in insulation and porcelain tiles are underway, and our US projects for premium laminate and LVT are continuing. The expansion of European laminate and American quartz countertop production in the US is expected to start in the second half of 2024. As we integrate our acquisitions in Mexico and Brazil, we have consolidated general management, sales, and administrative functions while improving the product offering, operational efficiency, and customer base of the companies. While the Mexican and Brazilian markets are experiencing lower demand and lower margins, we expect to benefit from our acquisitions once these markets recover.
In the third quarter, the Global Ceramic segment saw a decrease in net sales of 0.5% as reported and 6.0% on a historical and constant currency and days basis. The segment’s operating margin was (32.5%) as reported (8.0% adjusted), reflecting unfavorable price and product mix, temporary plant shutdowns, lower volumes, and currency effects, partially