Husqvarna Prioritizes Margin in Second Quarter

Husqvarna's second-quarter sales in the Americas down 3% as the company focuses on sales channel management to prioritize margin; dealer performance strong.

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Husqvarna's second-quarter sales in the Americas were down 3% as the company focuses on sales channel management to prioritize margin. However, stable earnings are largely attributable to dealer channel growth and improved cost efficiency.

Kai Wärn, president and CEO of Husqvarna, told investors: "Group sales improved over the course of the quarter, albeit from a slow start of the season due to unusually cold weather in both Europe and North America. Sales for Europe & Asia/Pacific increased 2%, Construction 7% while Americas' sales decreased 3%, mainly as a result of the Group's continued sales channel management to prioritize margin.

"Group operating income for the quarter declined, impacted mainly by negative currency effects within Europe & Asia/Pacific. The operating income was also affected by under-absorption due to inventory reductions. The stable earnings improvement for Americas continued, benefiting from dealer channel growth and improved cost efficiency. The positive earnings trend for Construction was supported by higher sales volumes and improved mix. As a result of the inventory reductions, Group operating cash flow for the second quarter was strong.

"We have a continued cautious demand outlook for Europe, while the outlook for North America remains more positive for lawn and garden as well as for construction products. During the second half of the year we will review how we can further accelerate key improvement programs in order to realize our financial goals."

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