The DIY Store Group HORNBACH Announces Only Modest Increases Despite a Strong Spring Season
The company announced on Wednesday in Bornheim that consumer confidence is not expected to recover significantly. In addition, Group CEO Albrecht Hornbach anticipates rising operating costs, particularly due to higher salaries for employees.
The final business figures for 2023/24 and forecasts for the new fiscal year only caused a minor stock market reaction. The HORNBACH stock temporarily fell by 1.15 percent to 77.20 euros in XETRA trading. However, the security has gained about 18 percent since the beginning of the year.
"The strong start to the spring season has positively influenced the company's expectations. This should have a positive impact on revenue in the first fiscal quarter ending in May. However, for the remainder of the fiscal year ending February 2025, HORNBACH anticipates a slowdown in revenue growth."
For the entire fiscal year 2024/25, HORNBACH forecasts sales just above the 6.16 billion euros of the previous year. The adjusted operating profit (adjusted EBIT), after special items, is expected to reach or at most slightly exceed the 254 million euros from 2023/24.
The company management assumes that the trading margin will settle at the higher level achieved towards the end of the last fiscal year. However, further cost increases are "inevitable". In particular, salary increases for the workforce as a result of the high inflation rates of the previous year, as well as investments in computer systems, are likely to push central costs slightly higher.
In the past fiscal year ending in February, HORNBACH's sales declined by 1.6 percent. Adjusted operating profit even dropped by roughly twelve percent. The profit attributable to shareholders decreased by 20 percent to just over 125 million euros. Despite these declines, HORNBACH plans to keep the dividend stable at 2.40 euros per share.
The dampened expectations and announced cost increases reflect the challenges that HORNBACH must face in an uncertain economic environment.
