Husqvarna forecasts slight rise in demand

HUSKVARNA, Sweden Wed May 19, 2010 10:32am EDT

HUSKVARNA, Sweden May 19 (Reuters) - Garden equipment maker Husqvarna (HUSQb.ST) said on Wednesday it still saw a low single-digit percentage rise in demand this year as markets recovered from the lows hit in the wake of the financial crisis.

Demand for gardening products was slammed by the economic downturn last year and retailers on both sides of the Atlantic have been careful about scaling up inventories amid lingering doubts over the strength of the recovery in consumer spending.

"I think there is an overall recovery in the market," Husqvarna Chief Executive Magnus Yngen told Reuters on the sidelines of a capital market day for investors and analysts.

"It is not that we see any strong recovery, but that there is hope that there is no further decline and rather a slight recovery along the lines of the odd percent."

Yngen also said Husqvarna stood by its forecast issued in April for sales in the second quarter being in line with last year's, but said it was getting positive signals from retailers though these were still cautious. [ID:nLDE63Q15V]

"The tone is more optimistic," he said. "They (retailers) are extremely cautious, but it still feels a bit better."

"If the spring season does not suddenly end, I think we will have a slight growth in demand ... My gut feeling is that the market has bottomed out and that we've have seen the worst."

Yngen also repeated Husqvarna, which makes lawn mowers, chain saws as well as diamond-tipped tools for the construction industry, would have difficulty regaining this year volumes lost during the downturn in the United States, its biggest market.

(Reporting by Katarina Gustafsson; writing by Niklas Pollard; editing by Elaine Hardcastle)

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