Husqvarna swings to a lower profit than expected in third quarter
By Anna Ringstrom
STOCKHOLM (Reuters) – Husqvarna <HUSQb.ST>, the world’s biggest maker of gardening power tools, posted a smaller than expected third-quarter operating profit and said weakened demand in North America had hit sales.
The Swedish group swung to a 414 million crown ($43 million) profit from a year-ago loss of 124 million, helped by restructuring and efficiency measures to get back on track after a tough 2018 as well as higher prices.
Analysts had however forecast a 443 million crown profit in the seasonally weak quarter, according to a Refinitiv poll. Husqvarna shares fell 3% at the opening in Stockholm.
“Going forward we will increase our focus on cost efficiencies,” Chief Executive Kai Warn said in the report.
The global no.1 company in robotic lawn mowers, garden watering systems and garden tractors, and 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 peak gardening season in the northern hemisphere.
The rival to Deere & Company, Black & Decker <SWK.N>, Honda Motor <7267.T> and Fiskars <FSKRS.HE> said turnover measured in local currencies was flat in the quarter.
“Sales were negatively affected by weaker demand in North America, particularly for the wheeled segment, while they developed positively in Europe with good growth for robotic lawn mowers and battery products,” Warn said.
Wheeled products includes walk-behind mowers and trimmers. The group did not say what slowed demand for the segment.
In the second quarter, sales shrank due to cool weather in Europe and North America, which restricted grass growth, so trade partners saw little need to restock lawn mowers.
While traditional petrol-engined products account for a large chunk of Husqvarna’s sales, the group is betting on strong growth in automatic mowers, as well as battery-driven handheld tools that are greener, less noisy and vibrate less.
($1 = 9.6376 Swedish crowns)
(Reporting by Anna Ringstrom; Editing by Johannes Hellstrom and David Holmes)