The Reliance Worldwide Corporation Limited (ASX: RWC) share price is falling this morning. This comes after a quarterly trading update from the Aussie plumbing supplies group. Despite a positive update, the company’s shares are down.
At the time of writing, the Reliance share price is trading for $4.85, down 0.72%.
Why is the Reliance Worldwide share price down?
Reliance Worldwide this morning provided an update for the three months ended 31 March 2021 (Q3 2021). A 14% increase in consolidated net sales, which climbed to $359.4 million, was a key highlight of the update. Excluding the negative USD-AUD currency impact, net sales climbed 27% higher compared to Q3 2020 figures.
Reliance Worldwide saw strong sales increases for the quarter in all key regions. The Americas (+39%), Asia Pacific (+11%) and Europe, Middle East, and Africa (+13%) all contributed to the sales growth.
Reliance Worldwide said this reflected “buoyant demand” for plumbing products. That was on the back of increased spending on residential repairs and remodelling. A significant weather freeze in the US in February also boosted demand for the quarter. In fact, Reliance Worldwide estimates that contributed ~50% of the quarterly sales increase.
A strong domestic housing market helped boost Asia Pacific sales while strong UK plumbing supplies demand boosted the EMEA result. Reliance Worldwide said April sales are substantially ahead of the coronavirus-impacted April 2020 sales figures.
The group continues to push ahead with cost mitigation measures by passing on higher input costs on impacted products. Brass products in particular have been hit by surging copper and zinc costs in recent months.
CEO Heath Sharp said:
Pricing discussions with other channel partners are progressing and we remain confident of achieving acceptable cost recovery outcomes.
Shares in the Aussie plumbing group were up 16.5% year to date prior to the open and are outpacing the S&P/ASX 200 Index (ASX: XJO).