Bang & Olufsen Extends Losses as Consumers Balk at Luxury TVs

(Bloomberg) -- Bang & Olufsen A/S, the Danish maker of luxury audio systems, reported a second consecutive quarterly loss as retailers struggled to clear out excess inventory.

• The operating loss was 129 million kroner ($19 million) in the three months through August. That missed the average estimate of a 50.5 million-krone loss of two analysts surveyed by Bloomberg. Sales declined by 30% and also missed expectations.

Key Insights

• Chief Executive Officer Henrik Clausen has forecast a turnaround in the second half even though first-half sales will probably decline. New products such as a television set developed with partner LG Electronics Inc. should help fuel higher full-year revenue, the company has said.
• B&O needs distributors to clear out stock as consumers balk at buying high-end consumer electronics including $15,000 television sets. Pressure is mounting on Clausen after three profit warnings in less than a year.
• B&O has been cracking down on its retail network to reduce business with shops that shift products to unauthorized sales channels at discounts. On Thursday the company said it plans to roll out more than 100 new branded spaces in stores that it doesn’t own during this quarter.

Market Reaction

• Trading will start at 9 a.m. local time in Copenhagen. The stock has lost more than 70% in the past 12 months.

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To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Christian Wienberg, Nick Rigillo

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