Sweden's Husqvarna misses profit forecast on weak North American demand; CEO to step down
April 24 (Reuters) - Sweden's Husqvarna (HUSQb.ST), opens new tab reported first-quarter operating profit below expectations on Thursday, hit by soft demand in North America, currency headwinds and lower prices, while CEO Pavel Hajman said he would step down.
Husqvarna's earnings before interest and tax fell 21% to 1.53 billion Swedish crowns ($157.97 million), missing analysts' average forecast of 1.71 billion crowns per data compiled by LSEG.
Hajman, the garden equipment maker's CEO since May 2023, said he would step down once a permanent successor is appointed, likely by the end of this year.
Husqvarna shares dropped 7% as of 0737 GMT, and were among worst performers on the pan-European 600 index (.STOXX), opens new tab.
The first quarter is Husqvarna's main sell-in period, when products are shipped to retailers before spring, but attention is already turning to how products will sell through in the second quarter.
The company previously warned of weaker sales and operating losses in recent quarters, citing soft consumer demand, retailer destocking and a tougher product mix.
The company reported a 16% growth in first-quarter robotic mower sales, driven by professional and consumer demand in Europe, even as overall market conditions remained challenging.
However, Hajman flagged there is a risk that tariffs imposed under U.S. President Trump on European goods could lead to increased volume of Chinese-made gardening equipment in Europe as a result of sales being hindered in the U.S.
"We are implementing price increases and conducting a review of our supply chain to mitigate the effects," Huqvarna said in a statement.
Hajman told Reuters that the company was in talks with suppliers and adjusting its manufacturing footprint, such as the Orangeburg facility sale in North America.
"We are preparing ourselves by reviewing our manufacturing footprint, both for short-term actions involving specific products that can be moved to a more favorable manufacturing country from a tariff perspective," Hajman told Reuters.
Jefferies said in a note the results showed flat sales, a 19% EBIT miss and declining sales in the company's Gardena division due to continued caution among retail partners.
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