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Consumer Electronics · Earnings Guidance · Geopolitical Risk · Product Launch
Bang & Olufsen significantly cut its full-year financial outlook and withdrew midterm guidance, causing its shares to tumble nearly 10% in Copenhagen trading, following disappointing sales of its new Beosound Premiere soundbar and escalating global economic uncertainty.
The Danish consumer electronics group reported fiscal third-quarter revenue of 621 million Danish kroner ($96.5 million), a 1.7% year-over-year decline, missing FactSet's forecast of 668 million kroner. Adjusted earnings before interest and taxes (EBIT) totaled 12 million kroner, falling short of the 22 million kroner expectation, resulting in a 1.9% margin.
For the full year, Bang & Olufsen now projects local currency revenue growth to be flat to a 3% decline, a significant reduction from the prior guidance of 1% to 5% growth. Free cash flow is now expected to be negative 150 million to negative 200 million kroner, compared to the previous negative 50 million to negative 100 million kroner.
The EBIT margin before special items is revised to minus 1% to minus 3%, down from the prior range of 1% to minus 3%. Chairman Juha Christensen acknowledged the need to strengthen the company's commercial operating model, a process initiated in January, and the search for a new CEO is ongoing after Kristian Tear stepped down.
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Bang & Olufsen Slashes Outlook, Shares Tumble 10%(current)
