Just as all the other big DIY-players, German Hornbach is not off to a good start for the year: the crisis and the terrible weather put a big dent in sales and profit for the first quarter.
32% less profit
The first quarter of Hornbach (1 March to 31 May) is one not to remember: sales dropped from 918.8 million euro last year to 892 million euro for the past quarter. Still, it was mainly the operational profit that took a big hit: it went from 75.4 million euro to 51.1 million euro, a drop of no less than 32.2%.
“Nor we, nor the entire DIY-sector has ever seen such a bad start to the year”, said Albrecht Hornbach, CEO of the company. “Snow and ice literally froze demand at out construction and garden centres in the month of March and the first half of April.” On a comparable basis Hornbach-Baumarkt, the largest entity in the group, saw sales drop by no less than 5.9%.
Retaining prognosis for the year
The only positive point is that the Hornbach megastores with garden centre perform slightly better than the sector average on the German market, despite the bad weather. With a sales drop of 5.8% they did one percent than the rest of the sector on average.
In the eight countries outside of Germany where the group is operational, sales on a comparable basis dropped 6.1%. Including the new stores the foreign activities remained almost status quo (-0.4%). Outside of Germany Hornbach-Baumarkt currently has sales of 360 million euro, 42.9% of the total. This means the market abroad is gaining in importance, as last year its share was 41.8%.
Nonetheless management is positive that, despite the bad start, the prognosis for the entire financial year will be kept. “We have faith we will be capable to make up for our start in the months to come”, said Albrecht Hornbach. “The need for construction materials is still large.”