Hornbach Cuts Sales and Earnings Forecasts Amid Europe Slowdown
Hornbach Holding AG (HBH3), a German home- improvement retailer in which Kingfisher Plc (KGF) owns a stake, cut its annual sales and earnings forecasts because of weakening consumer confidence across Europe.
Earnings before interest and tax in the fiscal year through February will be less than the previous year’s record 169 million euros ($219 million), the Neustadt an der Weinstrasse, Germany-based company said today in a statement. Revenue will be about the same as the prior year’s 3.2 billion euros, according to the retailer, which had previously been forecasting “low single-digit” percentage growth in sales.
Hornbach preferred shares fell as much as 3.9 percent in Frankfurt trading, the steepest drop since Sept. 27, and was down 2.2 percent at 53.71 euros as of 4:21 p.m. Kingfisher slid as much as 0.8 percent in London, erasing earlier gains, and was down 0.3 percent at 275.5 pence as of 3:52 p.m. local time.
Kingfisher owned a 21 percent holding in Hornbach as of September. The U.K. company initially bought a 12.5 percent stake in 2001.
Today’s revised forecasts reflect “the unfavorable macroeconomic framework in Europe,” said Hornbach, which got 58 percent of sales from Germany in its last financial year. The remainder of revenue comes from European countries including the Netherlands, Sweden, Austria, Switzerland and Romania.
Metro AG (MEO), Germany’s biggest retailer, cut its profit forecast on Oct. 5, saying Europe’s sovereign-debt crisis was weighing on sales in the south and east of the region.
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