Husqvarna, whose product line includes robotic lawnmowers, chainsaws, trimmers, riding lawnmowers, and watering solutions, has issued a statement on its projected fourth quarter earnings, signaling an anticipated 5% decline over the past year. The company, based in Stockholm, Sweden, has locations in Charlotte, North Carolina and Olathe, Kansas, as well as Deutschland, Germany.
According to the company, continued market conditions with intensified promotional activities, particularly in North America, and an unfavorable product mix, continue to have an impact on the Group's sales and operating result in the fourth quarter. In addition, retail partners and servicing dealers are focusing on reducing their inventory levels resulting in reduced production volumes and lower capacity utilization.
As a result, it says, the Group estimates the organic sales for the fourth quarter to decline by -5% compared to the previous year with an operating income of approximately SEK -700m to -800m (excluding items affecting comparability).
"I am disappointed in our continued negative development in the fourth quarter. We continue to execute on our previously announced cost-saving initiatives and prepare for the 2025 gardening season with strong product launches", says Pavel Hajman, CEO Husqvarna Group.
The report for the fourth quarter 2024 will be published on February 5, 2025.
In a statement issued Oct. 23, 2024, the company announced cost reductions and profitability improvement initiatives “to address the challenging market and constrained consumer spending.” The company statement said, “These measures are expected to result in fixed cost savings of SEK 500m per year and will impact approximately 400 positions across the Group.”
Those cost saving measures were in addition to the ongoing cost savings programs launched in 2022 and 2023, where the Group reports it reduced costs to enable increased investments in its strategic value creation areas: robotic mowers, battery products, watering, and professional solutions.
The non-recurring costs associated with the new measures are estimated to SEK 600m and will be recognized in the fourth quarter. The majority of the cost savings from these new measures will be realized in 2025. The Group, according to the statement, is committed to identifying and implementing additional efficiency measures to further enhance its operational structure and effectiveness.
In the update issued in October, Pavel Hajman, CEO of Husqvana Group, said, "To address the challenging market, we are reducing fixed costs and continuing to invest in our long-term strategy to strengthen Husqvarna Group's competitiveness. With a more efficient organization and a strong product pipeline for the coming season, these measures will contribute to future-proofing Husqvarna Group's business."
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