Husqvarna Sales, Margins Up Through March

Husqvarna is reporting improved sales and gross margins in the first quarter of 2014; company’s Accelerated Improvement Program and a strengthening U.S. economy both making an impact.

According to Kai Wärn, Husqvarna’s president and CEO, Husqvarna posted a strong 2014 first quarter thanks to solid market demand for its products and the positive impact of its Accelerated Improvement Program launched in 2013.

There are five main components of the Accelerated Improvement Program, which Husqvarna plans to have fully implemented in 2015 with the full financial benefit realized in 2016:

  • Focus on core brands and leadership positions
  • Differentiate the dealer and retail business models
  • Further measures to turn around the U.S.
  • Operational excellence
  • Grow business in emerging markets

As part of operational excellence, Husqvarna has successfully reduced its direct materials costs. In fact, the company reported a gross margin of 26.3% in the first quarter compared to a margin of 25.2% in the first quarter of 2013.

On the sales side, Husqvarna has benefitted from strengthening demand in the U.S. and elsewhere. Net sales for the first quarter were up 7%. Sales in the Americas specifically were up 8%. Construction division sales were up 11%.

As part of its focus on core brands and leadership positions, Husqvarna has discontinued production of RedMax chainsaws. Husqvarna will now focus on its Husqvarna-branded chainsaws in addition to its Jonsered chainsaws. Other RedMax products such as trimmers and blowers are expected to remain unaffected. Husqvarna has also noted that it is investing in a new manufacturing facility for chainsaw chain. There is some risk associated as Husqvarna has limited experience in producing saw chain.

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