By Christina Zander
Denmark's Bang & Olufsen A/S (BO.KO) posted a robust jump in
fiscal fourth-quarter sales largely thanks to the successful launch
of new products under the more affordable B&O Play brand, but
at the same time reported a hefty loss.
The television and audio equipment maker, one of Europe's last,
said Thursday that its net loss came in at 319 million Danish
kronor ($47.5 million) in its most recent quarter, compared with a
loss of DKK11 million in the same period a year earlier.
Revenue rose 14% to DKK695 million in the three months ended May
31, due to the popularity of its new affordable products on the
market.
Bang & Olufsen, long confined to luxurious living rooms with
its slick and pricey products, has sought to rejuvenate its
customer base with a range of headphones and portable speakers.
The B&O Play products have been a hit with quarterly sales
from the unit rising 52% to DKK193 million. But in competing for
teenagers' ears, the company is now battling against powerful
rivals including Bose Corp. and Apple Inc.'s Beats.
Bang & Olufsen posted an underlying operating loss of DKK53
million in the quarter, well below the company's own guidance
forecasting an operating profit.
"It came as a surprise that they were unable to make any money,"
said Morten Imsgard, analyst at Sydbank. "The company is too small
and its costs are too high."
Bang & Olufsen concurred. It blamed what it called
"unsatisfactory results" on its lack of scale and a complex
structure, but said a recent brand license agreement and the sale
of its auto business would pay off.
The firm said it would work on further reducing its cost base,
and expected to record a small operating profit in the fiscal year
ended June 30, 2016.
Bang & Olufsen shares took a beating on Thursday, dropping
as much as 14% on the Copenhagen exchange.
Write to Christina Zander at christina.zander@wsj.com
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