Bang & Olufsen shares drop after disappointing China sales

8 months ago 55

STOCKHOLM : Shares in Bang & Olufsen plummeted 11 per cent on Friday after the Danish audio and video equipment maker reported a preliminary operating loss for the third quarter and lowered its full-year profit outlook due to disappointing sales in China.

The company posted an operating loss before special items for the third quarter of 43 million Danish crowns ($6.14 million) between December to February.

The company also said it now expects EBIT margin before special items for the full financial year ending May 31 in the range of -4 per cent to -1 per cent. It had previusly guided it would end at the lower end of -2 per cent to 3 per cent range.

"Sales in China did not progress as expected after the reopening because of all the challenges with COVID-19," Chief Executive Kristian Teär said in a statement.

"When the country suddenly abandoned most of the restrictions in December, we did not expect this negative development in consumer behaviour," he said.

Sales in China declined by 65 per cent in the third quarter, the company said.

B&O said it expects better market conditions in China in the fourth quarter, but still at a slower pace than initially expected.

Shares in B&O were trading 11 per cent lower by 1513 GMT, headed for their biggest daily decline since December 2019.

($1 = 7.0022 Danish crowns)

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