Bang & Olufsen (BO) Q3 25/26 earnings summary

Executive summary

• Q3 revenue grew 1.3% in local currencies but declined 1.7% reported, missing expectations due to underperformance of the Beosound Premiere launch and ongoing geopolitical and economic uncertainty.

• Gross margin improved by 2.1 percentage points to 57.5% year-over-year, driven by a favorable product mix and higher-margin categories.

• Like-for-like sell-out increased 1%, with Win Cities achieving 16% growth for the seventh consecutive quarter; branded channels saw 2% like-for-like growth.

• Several new flagship and Culture Store retail locations opened in San Francisco, Shenzhen, and Hamburg, expanding global retail presence.

• CEO search is ongoing, with an announcement expected in the coming months.

Financial highlights

• Q3 revenue: DKK 621m (+1.3% in local currencies, -1.7% reported); 9M revenue: DKK 1,814m (-1.1% in local currencies).

• Gross margin: 57.5% in Q3, up 2.1pp year-over-year; product gross margin at 54.0%.

• EBIT margin before special items: 1.9% (Q3), down from 3.8% last year.

• Free cash flow: DKK 22m in Q3 (up from DKK 18m y/y); 9M free cash flow: DKK -146m.

• Net working capital: DKK 270m (down from previous quarter), mainly due to lower inventories and receivables.

Outlook and guidance

• FY 2025/26 revenue growth in local currencies revised to -3% to 0% (was 1% to 5%).

• EBIT margin before special items now expected at -3% to -1% (was -3% to 1%).

• Free cash flow guidance: DKK -200m to -150m (was DKK -100m to -50m).

• CAPEX expected at DKK 280m-300m (was DKK 320m-360m); at the lower end of the previously announced range.

• Mid-term financial ambitions for 2027/28 have been withdrawn.