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UPDATE 1-Husqvarna profit beats expectations despite sluggish consumer brands sales
April 21, 2017 / 6:50 AM / 8 months ago

UPDATE 1-Husqvarna profit beats expectations despite sluggish consumer brands sales

(Adds detail, background)

April 21 (Reuters) - Gardening and construction gear firm Husqvarna posted on Friday a bigger quarterly operating profit than expected helped by growth at the Construction, Husqvarna and Gardena units, while sales at the struggling Consumer Brands shrank.

* EBIT in Q1, a key pre-season sell-in period for Husqvarna, was up 22 pct yr/yr to 1.43 bln SEK ($159 mln)

* Sales up 12 pct to 12.7 bln SEK

* Reuters poll: EBIT was seen at 1.35 bln SEK, sales at 12.2 bln

* Said: “The Consumer Brands division experienced a lower first quarter sell-in, impacted by a couple of larger retail customers adjusting their buying patterns to tighter just-in-time order scheduling. We view this as a periodization between quarters”

* Said sales at Consumer Brands, Husqvarna’s second-biggest division, shrank 4 pct adjusted for currency, below Reuters poll forecast

* Said: “The improved operating income for the group was mainly driven by higher volumes and a strong product mixdevelopment. Changes in exchange rates had a positive impact, however partly offset by increased raw material costs”

* Said: “The execution of the profitable growth strategies in the Husqvarna, Gardena and Construction divisions are proceeding well”

* Sales at the Construction unit were boosted by the acquisition of Pullman Ermator in the quarter

* Said: “To support our profitable growth journey, we continue to invest in strategic growth initiatives along with efforts to improve efficiency”

* Said: “focus for the second quarter, following the successful sell-in phase, will be to support our trade partners to deliver an equally positive sell-through”

* Husqvarna’s rivals include Stanley Black & Decker, Deere and Toro Source text for Eikon: Further company coverage: ($1 = 8.9869 Swedish crowns) (Reporting by Anna Ringstrom, editing by Terje Solsvik)

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