Mohawk Industries (MHK) was already in some unstable ground before COVID-19. Particularly, 2018 and 2019 were tough years for the business and industry.
Gross profit margins have been falling. Mohawk reached its highest gross margins of 32.1% in 2017. Today, they are down almost 5% to 27.8%. Since Mohawk is a capital-intensive business, weakness in gross margins translates to greater erosion in operating income margins. The stock has been punished as a result.
Mohawk is the world's biggest flooring manufacturer (based on management's estimates) with manufacturing operations in 19 countries, followed by Shaw Industries, owned