Bang & Olufsen Sounds Profit Warning
Danish Group Cites Supply-Chain Problems for Profit Squeeze
STOCKHOLM— Bang & Olufsen A/S, the Danish high-end consumer electronics company, Monday cut its earnings guidance for the current fiscal year, citing production ramp-up and supply-chain issues.
While the company said demand for its newly-launched products continued to be strong in the fiscal second quarter, delays in the rollout of new products have had an impact on costs and profit margins.
Bang & Olufsen, best-known for its upmarket televisions and home entertainment systems, said it now expects to make an operating loss in the 2014 to 2015 fiscal year, having previously expected an improvement in earnings before interest and taxes.
Bang & Olufsen said it expects revenue to decline by approximately 8% in the second quarter compared with the same quarter last year. The loss before interest and tax for the quarter is expected to come in at 90 million to 100 million Danish kroner ($14.80 million to $16.5 million), the company said.
The company repeated, however, that it expects high single-digit percentage growth in revenue for the full year.
Bang & Olufsen said management is undertaking a review of the business to identify “strategic and structural options to increase scale and further reduce complexity.”
The company is scheduled to report second-quarter earnings on Jan. 20.