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Beiersdorf trimmed its full-year guidance on Monday, citing a difficult market environment and a slower-than-expected recovery at its core brand Nivea.
The German consumer goods group now expects organic sales to decline in the low-single digit percentage range this year, after previously guiding for “flat to slightly growing” organic sales.
It also cut its guidance for the core earnings (EBIT) margin excluding special factors to 11.8 percent, also due to fresh investments in consumer-facing activities that it says will drive growth across its categories.
It previously had forecast margins slightly below the previous year’s level of 14.0 percent.
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Beiersdorf shares slid 3.7 percent by 12:15 GMT, after falling 13.8 percent this year.
“The magnitude of the cuts is clearly incredibly severe, although perhaps not such a shock in view of the lack of progress that has been made in addressing the incredibly weak Nivea growth performance over the past year,” said Callum Elliott, an analyst at Bernstein.
Beiersdorf said it was investing in more marketing and product launches to help revive sales of Nivea, which fell 7 percent organically in the first quarter of this year due to price cuts and a challenging mass market.
Beiersdorf, whose brands also include Eucerin, Aquaphor and La Prairie, said second-quarter net sales fell 2.3 percent, broadly in line with a Vara-provided consensus for a 2 percent decline.
The skincare maker said it expects sales growth to return next year with the EBIT margin stabilising, while 2028 would see the beginning of above-market sales growth and a steady EBIT margin improvement.
By Paolo Laudani and Cian Muenster
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