Henkel sales fall in beauty care
today Nov 14, 2019
German consumer goods company Henkel reported another quarter of decline on Thursday as its beauty unit battled fierce competition in western Europe and destocking in China.
Henkel's overall sales fell by a like-for-like 0.3% to 5.077 billion euros (£4.370 billion) versus average analyst forecasts of 5.1 billion euros. Adjusted earnings per preferred share dropped 9.5% to 1.43 euros, versus a 1.45 euro consensus.
Shares in Henkel, which have risen 14% in the last three months, were down 1.5% at 0903 GMT.
Last month, Henkel announced that Chief Financial Officer Carsten Knobel would take over as CEO from Van Bylen in January after a string of poor results.
Henkel's struggling beauty business, which makes Schwarzkopf shampoo and Dial soap, reported another fall in organic sales of 2.2%, which the company blamed on fierce competition in western Europe and destocking in China.
Analysts have suggested Henkel should consider selling or spinning off beauty products. but the founding family, which owns around 60% of the company's voting shares, is seen as unlikely to take such a radical step.
Instead, Henkel has been buying up new brands, including earlier this month adding DevaCurl, a premium professional brand for curly hair.
Van Bylen declined to comment on speculation Henkel might be interested in Coty Inc's Wella brand, but added that acquisitions remained part of the company's strategy in general.
The company was also hit by a slowdown in automotives and at its adhesives unit, which accounts for half its sales, where sales fell 2.4%.
Henkel reiterated its 2019 forecast for group organic sales growth of between zero and 2% and for adjusted earnings per preferred share (EPS) to fall by a mid- to high single-digit percentage at constant exchange rates.
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