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Investing.com -- Henkel’s (ETR:HNKG) fourth-quarter results have fallen short of expectations on Tuesday, with weaker sales growth and a disappointing outlook leading analysts at Jefferies to warn of likely consensus cuts for fiscal year 2025 earnings per share.
The German chemical and consumer goods company reported group sales growth of 1.1% for the quarter, much below the 3.6% consensus estimate.
Adhesive Technologies, a key business segment, recorded a sales increase of just 1.7%, missing forecasts of 3.8%. Consumer volumes declined by 1.4%, underperforming the expected 0.3% drop.
Henkel expects organic sales growth of 1.5% to 3.5% for fiscal year 2025, falling short of the market consensus of around 3%.
Operating margins are projected between 14% and 15.5%, with estimates favoring the lower end. Consumer organic sales in the first quarter are anticipated to drop between 2% and 4%, contrary to market expectations of a 3% increase.
While pricing is expected to rise by approximately 1.9%, the decline in volume points to ongoing struggles in the consumer segment.
Jefferies analysts noted that promotional phasing in the Consumer segment could undermine confidence in Henkel’s strategy of maintaining higher price points for key brands.
If this trend continues, it may indicate that price increases are not proving sustainable in the current market environment.
Henkel reported a full-year operating margin of 14.3%, in line with expectations but below Jefferies’ estimate of 14.6%. Underlying earnings per share stood at €5.36, slightly ahead of the consensus forecast.
Cost savings from the company’s restructuring program are expected to reach €250 million by the end of 2025, one year ahead of schedule.
Henkel has also announced a €1 billion share buyback program over the next 12 months. Despite this, Jefferies maintains a ‘hold’ rating on the stock with a price target of €91, implying a modest 5% upside from the previous day’s closing price of €86.72.