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Husqvarna raises prices again as costs increase and quarterly profit dips
Global Banking & Finance Review®
Company
By Anna Ringstrom
STOCKHOLM (Reuters) -Husqvarna, the world’s biggest maker of gardening power equipment, is raising prices further this month in the face of rising supply and energy costs, it said on Thursday, after first-quarter profits fell slightly less than expected.
The Swedish group, whose products range from ride-on and robotic lawn mowers to irrigation systems and chainsaws, said operating profit fell despite strong demand to 2.16 billion crowns ($228.9 million) from 2.29 billion a year earlier.
Analysts polled by Refinitiv had on average forecast a 1.99 billion crown profit.
“Cost increases for raw materials, energy and transportation are expected to continue and therefore further price increases are being implemented,” the company said.
“Strong customer demand continues and we are taking decisive measures together with our suppliers to resolve the current supply chain constraints.”
The manufacturer predicted its supply chain troubles would ease gradually throughout the gardening season.
Chief executive Henric Andersson told Reuters the bulk of price hikes across markets and product groups planned for April were implemented and he had no indications retailers were holding back on orders as a result.
“They accept the price increases. Now that their sales take off we’ll see how end customers react,” he said in an interview.
The rival of Black & Decker and Honda Motor does the bulk of its business towards the end of the first quarter and in the second, ahead of and during the peak gardening season in the northern hemisphere.
Husqvarna, which has benefited from the stay-at-home trend caused by the pandemic, had warned last month that component shortages would hit first-quarter results.
The group, which has no production in Russia nor Ukraine and has stopped all exports to and investments in Russia, booked writedowns related to the two countries of 119 million crowns in the quarter.
Andersson said Husqvarna was evaluating exiting altogether from Russia, which in 2021 accounted for around 1.5% of group sales.
($1 = 9.4383 Swedish crowns)
(Reporting by Anna Ringstrom; Editing by Niklas Pollard, Jan Harvey and Tomasz Janowski)
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