Shares in Henkel Trade Lower After Profit Warning
December 13 2019 - 5:15AM
Dow Jones News
By Kim Richters
Shares in Henkel AG & Co. KGaA (HEN.XE) traded lower Friday
after the German consumer-products company late Thursday said it
expected lower earnings for fiscal 2020.
The maker of Dial soap and Purex laundry detergent said
investments in marketing and IT were weighing on its results, and
it also cited a challenging market environment.
The company said it expects an adjusted EBIT margin for the next
fiscal year of about 15%, compared with around 16.2% expected for
2019. Adjusted earnings per preferred share in fiscal 2020 are also
expected to be lower than the forecast for fiscal 2019.
At 0931 GMT, shares in Henkel traded 3.3% lower at EUR91.26.
Analysts were surprised by Henkel's outlook, which was issued
unexpectedly and was below market expectations.
The "gloomy" new forecast will likely lead to consensus
downgrades, Jefferies said, adding that the company's margin
outlook "will bring Henkel's profitability to a lower level than in
2013, reversing seven years of margin progress in two fell
swoops."
Analysts at Bryan Garnier were particularly surprised by the
company's new EBIT margin forecast, which they expected to be
stable.
The bank also believes that the company was stepping up its
investments, because the extent of the work to be done in its
consumer division is larger than it previously thought.
Write to Kim Richters at kim.richters@wsj.com
(END) Dow Jones Newswires
December 13, 2019 05:00 ET (10:00 GMT)
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