Bang & Olufsen has affirmed its full-year guidance but warns that its revenue for the year is expected to be on the lower end of the projected range. The Danish consumer-electronics company cites a weaker-than-anticipated performance in the Asia-Pacific region as the main factor.
In the three months leading up to November 30, Bang & Olufsen reported a 19% decline in revenue, amounting to 700 million Danish kroner ($102.6 million). CEO Kristian Tear explains that this drop in sales can be attributed to various factors, including the slower recovery of the Chinese economy and the company's decision to withdraw from multibrand stores.
Revenue decreased across all regions in the company's fiscal second quarter, with a 15% decline in EMEA, 31% decline in the Americas, and another 15% decline in the Asia-Pacific region.
Despite these challenges, Bang & Olufsen achieved a net profit of DKK8 million for the three-month period, compared to DKK3 million from the same quarter the previous year. However, this falls short of analysts' expectations of DKK14.5 million, according to a FactSet poll.
Second-quarter earnings before interest and tax rose to DKK17 million, up from DKK13 million. Analysts had anticipated EBIT of DKK23 million.
As a result of the decline in revenue, Bang & Olufsen now forecasts full fiscal-year growth to be at the lower end of its estimated range of 0% to 9%. However, the company maintains its projection of an EBIT margin before special items between 0% and 6%.