* US Q4 demand weak as retailers reduce inventories
* Readiness for gardening season in line with plans
* Coronavirus effect on supply could become big
* Eyes market growth for battery-driven gardening tools
* Demand is weather dependent and peaks in Q2
*
(Adds detail, background)
STOCKHOLM, Feb 4 (Reuters) – Husqvarna , the
world’s biggest maker of gardening power tools, was in the red
in the fourth quarter with a bigger than expected operating loss
as it said sales in the United States were hit by retailers
reducing inventories.
The company, which appointed a new CEO last month, had
returned to profit in the third quarter of last year, as
restructuring and efficiency measures helped it get back on
track after a tough 2018.
However, the rival to Deere & Company, Black & Decker
, Honda Motor and Fiskars has been
hit by weakening demand in North America.
Shares in the company fell nearly 4% after it reported a
fourth-quarter operating loss of 493 million crowns ($51.2
million). That was smaller than a loss of 1.10 billion crowns a
year earlier but was bigger than analysts’ forecasts for a 349
million crown loss, according to Refinitiv estimates.
The company sold some unprofitable businesses last year, and
in November flagged more cost cuts and exits in 2020.
[nL8N2850WN][nL5N2771AF]
The world’s biggest maker of robotic lawn mowers, garden
watering systems and garden tractors, and the No.2 in trimmers
and chainsaws, does the bulk of its business towards the end of
the first quarter and in the second – ahead of and during the
peak gardening season in the northern hemisphere.
“The seasonal order situation and readiness are in line with
the plans for the year,” said Chief Executive Kai Warn, who is
stepping down in April and handing over to company veteran
Henric Andersson. [nL8N29I59H]
Warn warned that as the company sources components in China,
it could start to be affected by the impact of the coronavirus
if the virus continues to spread. [nL4N2A401C]
“Based on the current status of information, we do not
foresee any significant business disturbances related to the
Corona virus outbreak, if component supply is normalized during
the next few weeks, whereas it might become material if they
remain in March,” he said, without elaborating further.
In the fourth quarter, European demand was good while the
United States, its biggest market, was weak.
“The market development in Europe was favourable, with good
growth for robotic lawn mowers and battery products, while the
market was weak in the U.S., particularly for the wheeled
segment, as trade partners continued to lower their
inventories,” it said.
Wheeled products includes walk-behind mowers and trimmers.
While petrol-engined products account for the bulk of
Husqvarna’s sales, the group is betting on growing demand for
battery-driven tools which are greener and less noisy.
Husqvarna proposed an unchanged dividend of 2.25 crowns per
share.
($1 = 9.6341 Swedish crowns)
(Reporting by Anna Ringstrom; Editing by Simon Johnson and
Susan Fenton)
(([email protected]; +46 8 502 423 74; Reuters
Messaging: [email protected]))
Keywords: HUSQVARNA RESULTS/ (UPDATE 1)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
