Fiskars: Husqvarna profit warning underpins uncertainty ahead of the 2025 gardening season - Nordea

After market close on 9 December, Husqvarna issued a profit warning due to challenging market conditions with intensified promotional activities, particularly in North America. Husqvarna expects 5% y/y organic sales decline with adjusted EBIT loss of SEK 700-800m in Q4. Husqvarna notes unfavorable product mix while we note Fiskars BA was able to record all-time high Q3 gross margin which combined with lower SG&A costs was able to mitigate the impact of lower volumes. In addition, Husqvarna notes retail partners and servicing dealers focus on reducing inventories which is in line with Fiskars communication during Q3. Americas accounted 52% of Fiskars BA sales in 2023, while gardening sales were 55% of Fiskars BA sales. In Q3, Fiskars BA comparable sales were down 5% y/y while we have modelled -4% y/y comparable sales growth in Q4. For 2024E, we and LSEG Data & Analytics consensus have anticipated a profit warning with 1-2% lower adjusted EBIT compared to 2023 while Fiskars guides for slightly improving adjusted EBIT after EUR 110m in 2023. For Fiskars, Q4 is clearly driven by Vita BA, where the company was expecting flattish volumes y/y in Q4 (we model -1% comparable sales growth in Vita BA) while profit improvement programmes should continue to benefit the company. As a conclusion, we view Husqvarna profit warning as slightly negative for Fiskars as it increases risks ahead of the important 2025 gardening season although we do not expect any material changes on Q4 consensus expectations.