(Bloomberg) -- Sweden’s Husqvarna AB plans to accelerate cost savings after warning that slow consumer spending is hitting sales and profitability.
The Swedish maker of robotic lawnmowers and other outdoor maintenance gear said third-quarter organic sales are seen declining by about 5% from the previous year, according to a statement late on Tuesday.
Operating income is likely to break even, with margins seen negatively impacted by lower capacity utilization and promotional activities, the Stockholm-based company said. Cash flow is expected to “remain strong,” in part due to reductions in inventory levels, it said.
“The current market situation is weak and has a substantial effect on our business, thus we continue to focus on our mitigating activities,” Chief Executive Officer Pavel Hajman said. Husqvarna, which gave no details on how it plans to accelerate the expense reductions, said it will present further measures in its third-quarter report on Oct. 23.
The current cost-cutting program initially began in 2022 and was later expanded to target annual savings of 1.2 billion kronor ($116 million), with full effect from 2025. The company is also in the midst of a shift away from petrol-powered products.
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