Henkel AG & Co KGAA (XE:HEN)
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2 Months : From Nov 2019 to Jan 2020
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 firstname.lastname@example.org
(END) Dow Jones Newswires
December 13, 2019 05:00 ET (10:00 GMT)
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