April 24, 2020 / 8:10 AM / a month ago

UPDATE 1-Husqvarna braces for tough Q2 after virus lockdowns hit results

* COVID-19 related supply disruptions, then lockdowns, hit Q1

* Professional construction machines hit hardest

* Robotic lawn mowers, watering products sales grew (Adds CEO comment, detail, background)

By Anna Ringstrom

STOCKHOLM, April 24 (Reuters) - Husqvarna, the world’s biggest gardening power tools maker, on Friday warned of a tough second quarter after coronavirus lockdowns in many of its main markets hit sales towards the end of the first quarter and hurt earnings.

The global leader in robotic lawn mowers, garden watering systems and garden tractors, and no.2 in trimmers and chainsaws, said first quarter operating profit was 1.42 billion Swedish crowns ($140.8 million) against a year-earlier 1.64 billion.

Analysts had on average forecast a slightly smaller drop, to 1.33 billion crowns, according to Refinitiv data.

Sales shrank 11% from year-ago in the quarter, or 4% stripping out currency translation effects.

“I personally believe the second quarter will be tougher than the first quarter, and I don’t think it is consumer sentiment driving this as much as it is simply a function of countries being in lockdown,” Chief Executive Henric Andersson said in an interview.

“That makes the situation extremely unpredictable.”

Husqvarna, which sells to retailers, had said on March 5 - before stores in many of its markets were forced to close - it was seeing no impact on demand due to the pandemic at the time.

“Initially it was supply related but then it became demand-related as well as more and more countries imposed restrictions and went into lockdown,” Andersson said.

Andersson, CEO since early April, said that while sales of construction machines for professionals fell, sales of robotic lawn mowers, battery driven products and irrigation products grew in the quarter.

He said Husqvarna was experiencing continuous small supply chain disruptions but that the company was able to plan around and adjust to them. All Husqvarna’s factories were up and running albeit not at full capacity and the company was well placed for when markets recover, he added.

Shares in Husqvarna were down 1% in early trade, in line with the wider market in Stockholm.

$1 = 10.0842 Swedish crowns Reporting by Anna Ringstrom; editing by Niklas Pollard and Emelia Sithole-Matarise

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