HORNBACH (HBH) Q1 24/25 earnings summary

Executive summary

• Q1 2024/25 delivered strong performance with adjusted EBIT up 33.8% to €146.4 million, driven by improved gross margin, cost management, and favorable weather.

• Net sales increased 1.8% year-over-year to €1,805.7 million, led by Baumarkt and strong gardening product demand.

• Earnings per share grew 43.6% to €5.96, and consolidated net income increased 40.8% to €100.0 million.

• Like-for-like sales grew 2.5%, with volume growth as sales prices slightly decreased.

• Market share expanded in the Netherlands (+1.1 ppt) and Czechia (+1.0 ppt), with e-commerce sales at 12.4% of Baumarkt sales.

Financial highlights

• Gross margin improved to 35.4% from 33.6%, mainly due to lower commodity prices and a more profitable product mix.

• Adjusted EBIT margin reached 8.1% in Q1, up from 6.2% in the prior year.

• Free cash flow turned positive at €43.0 million, compared to €-17.7 million in Q1 2023/24.

• Cash inflow from operating activities nearly doubled year-over-year to €58.3 million.

• CapEx was €23.4 million, down from €51.1 million last year, due to timing of store openings.

Outlook and guidance

• Full-year guidance confirmed: sales expected to slightly exceed €6,161 million, with adjusted EBIT at or slightly above €254.2 million.

• Q2 started slower due to rainy weather and major sporting events, but no change to guidance.

• Gross margin anticipated to stabilize at the current higher level.

• Ongoing cost increases expected, mainly from pay rises due to prior-year inflation.

• Strategic focus on efficiency, digitalization, ESG, and maintaining a strong balance sheet.