COPENHAGEN (Reuters) - Struggling Danish luxury TV and stereo maker Bang & Olufsen (BO.CO) reported on Thursday a first-quarter operating loss on weak demand for its televisions but maintained its full year outlook of single-digit revenue growth.
Like others in the European retail sector, B&O - whose televisions can sell for up to 96,000 Danish crowns ($14,077) has been hurt by subdued consumer spending.
The company posted a loss before interest and tax (EBIT) of 129 million Danish crowns, down from EBIT of 5 million in the same period last year while revenue dropped 30.3% to 419 million crowns.
“It was a tough first quarter, but a first quarter which reflects that we are progressing according to plan,” Chief Executive Officer Henrik Clausen told Reuters.
The company is trying to revamp its distribution network from a wholesale model to a more retail-driven focus as well as decreasing retailers’ inventories.
B&O’s shares, which have fallen more than 70% over the past year, were down 3% in early trading.
Nordet analyst Per Hansen said investors doubted whether B&O will be able to deliver on its strategy.
“What investors want to know, but Bang & Olufsen will not tell, is what the alternatives are if this strategy does not work,” Hansen said.
After several quarters of weak TV sales and slow progress in its turnaround plan, B&O still expects the launch of its new TV BeoVision Harmony and loudspeaker Soundbar to drive growth in the second-half of the year.
“These are not just products, they are products which will be able to move our business significantly,” Clausen said.
Reporting by Andreas Mortensen; Editing by Kim Coghill and Emelia Sithole-Matarise