Hornbach Kicks off 2025/26 Business Year with a Sales Surge
Experienced an uptick in financial earnings - Initiated with a Surplus in Turnover for Hornbach
Hornbach, a renowned player in the building market and construction materials sector, has embarked on the new business year 2025/26 with an impressive boost in sales. The company's success can be attributed to a perfect blend of favorable weather conditions and a thriving demand in the gardening niche.
The company's revenues soared by 5.7% in the initial quarter, hitting a staggering €1.9 billion, as announced in Bornheim. Moreover, the adjusted earnings before interest and taxes (EBIT) showed a considerable improvement of 10.4% to approximately €162 million. Net income saw a notable increase of 10.5% to €110.5 million, compared to the previous year.
"We've begun the new business year on a high note," asserted Erich Harsch, CEO of the lead subsidiary, Hornbach Baumarkt AG. "We've witnessed a significant spike in customer frequency, and we're seeing a subtle uptick in average shopping cart size. However, there's still a stigma of caution surrounding larger projects."
Without wavering, the company reaffirmed its annual forecast. The management expects the revenue to stay around or slightly above the previous year's figure of €6.2 billion. The adjusted EBIT is predicted to remain consistent with the previous year.
However, the company sounded a reminder about the unpredictability of the macroeconomic and geopolitical landscape. Additionally, wage increases driven by inflation in the recent past inevitably lead to further costs increases.
The expansion of its product range through the marketplace strategy, the growth in e-commerce sales, and the addition of two new stores in Germany have bolstered Hornbach's position in the market and contributed to the sales growth.
While Hornbach's strong start and strategic initiatives ignite sales growth, the company remains vigilant about potential obstacles such as macroeconomic volatility and competitive pressures that could impact the remainder of the year.
Key Factors:
- Favorable weather conditions driving store footfall.
- Strong e-commerce sales growth fueled by expanded delivery and pick-up services.
- Marketplace strategy expanding product range and attracting more customers.
- Store expansion bolstering market presence and contributing to sales growth.
Challenges and Outlook:
- External and macroeconomic uncertainties may affect performance.
- Net sales projected to stay at or slightly above the 2024/25 level of €6.2 billion.
- Adjusted EBIT expected to remain at the 2024/25 level, with a goal to reach the upper half of the guidance range based on current performance.
- Capital expenditures forecasted to be higher due to ongoing investments in growth opportunities across European markets.
- As Hornbach prospered in the building market, the company is exploring opportunities to extend its influences in the EC countries, refining its employment policy to attract qualified worked in industries such as finance, retail, and business to tackle larger projects and meet the growing demand.
- With the surge in e-commerce sales and the expansion of its marketplace strategy, Hornbach is anticipating the need for a comprehensive and flexible employment policy, helping the company to adapt to the ever-changing retail landscape, ensuring efficient operations, and staying competitive in the finance sector.
