Bang & Olufsen swings to loss

Bang & Olufsen swings to loss

January 14, 2020

Bang & Olufsen A/S (BO.KO) said Tuesday it swung to a net loss in its fiscal second quarter as results continued to be weighed by its switch to a new retail strategy and a reduction of retail inventory.

The Danish consumer electronics company posted a net loss for the three months to Nov. 30 of 60 million Danish kroner ($6.7 million) from a profit of DKK68 million a year earlier while revenue fell 31% to DKK627 million.

Analysts had expected a net loss of DKK56 million on revenue of DKK627 million, according to a FactSet poll.

The earnings before interest and tax margin fell to minus 12.1% from positive 9.9% last year.

Last month Bang & Olufsen slashed its full-year fiscal 2020 outlook after sales in November were much worse than expected. It said at the time that full-year revenue is seen at 13% to 18% below last year’s level with the adjusted EBIT margin seen at minus 4% to minus 9% and free cash flow at between negative DKK100 million and DKK150 million.

It reiterated these targets Tuesday.

"The results were impacted by the ongoing transition towards a demand-driven retail model and the relatively low number of product launches in the previous quarters," Chief Executive Kristian Tear said.

"We have already initiated sales and marketing initiatives to address the challenges," he said. "In combination with several product launches in the coming quarters, the changes will contribute to improving our results in the second half of the financial year."

The company is preparing a three-year strategy plan that will be presented at a capital market day on April 3.

Write to Dominic Chopping at [email protected]

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