(Bloomberg) --
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Bang & Olufsen A/S reported its third consecutive quarterly loss as the Danish hifi maker struggled with a buildup of inventory after consumers balked at buying $500 headphones.
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- The operating loss was 77 million kroner ($11 million) in the three months through November. While inventory is down compared to May, it’s still up 31% on the year.
Key Insights
- The company blamed November sales for the poor quarter, adding that price pressure increased on earphones. Bang & Olufsen made four profit warnings since December 2018. Kristian Tear, who became chief executive officer in October, has his work cut out for him as the company expects full-year sales to drop as much as 18%.
- Bang & Olufsen has been giving retailers incentives to clear out a buildup of products that are becoming obsolete, which is taking longer than expected and is weighing on margins. The company already warned that second-quarter sales dropped 31% when it lowered its profit outlook last month.
- The company is seeking buyers for its new Beovision Harmony TV, which starts around $15,000. Tech reviewers have noted while Bang & Olufsen makes good appliances with an eye for aesthetics, there are cheaper alternatives from the likes of LG and Samsung.
Market Reaction
- The stock was little changed in Copenhagen after an early drop of as much as 1.4%. Bang & Olufsen has lost three-quarters of its between 2018 and 2019.
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