Roundup: Hornbach cuts earnings forecast – Inflation and Supply Chain

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BORNHEAM (DPA-AFX) – The Hornbach DIY Group is more pessimistic about earnings growth in the current fiscal year due to rising prices and ongoing supply chain problems. Hornbach Holding announced late Monday in Bornheim that the first quarter was characterized by stable demand for construction and DIY products. However, the macroeconomic outlook and challenges related to inflation, supply chain and product pricing continued to become more pronounced and amplified in the second quarter. This makes forecasting for the rest of the year even more difficult.

The group announced that adjusted earnings before interest and taxes (EBIT) will fall by a low double-digit percentage in the current financial year up to the end of February 2023 compared to the previous year’s figure of EUR 362.6 million. Previously, the management had only assumed a slight minus. According to preliminary information, the adjusted operating result fell by a little more than twelve percent to 148 million euros in the first quarter of the financial year.

The shares of Baummarkt-Holding lost almost seven percent on Tuesday shortly after trading began. One stock trader described the announcement as a big hit after eight straight earnings increases. In the past two years, Hornbach has been the beneficiary of the lockdown during the Corona crisis, as many have rediscovered their houses, apartments or gardens. Although DIY stores had to close several times during the pandemic, Hornbach was able to compensate for this with strong online trading and offers such as Click & Collect.

In terms of sales, however, Hornbach is not changing its expectations for the current year. Hornbach achieved record sales of almost 5.9 billion euros in the past financial year. In the first quarter of the current financial year, sales grew by eight percent to 1.8 billion euros, driven by stagnant demand for construction and DIY products.

Headquartered in Bornheim, Palatinate, Hornbach operates 167 DIY megastores with garden centers across Europe, 98 of which are in Germany. The company has no market in Russia or Ukraine. The group with a good 24,000 employees is also active in the building materials business./mne/he/stw/stk

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