Beiersdorf shares drop after Q2 misses estimates

Investing.com -- Beiersdorf AG (ETR:BEIG) shares fell on Wednesday after its second-quarter earnings report fell short of forecasts. The share price decrease reflects weaker-than-expected margins and growth performance.

At 4:40 am (0840 GMT), Beiersdorf AG was trading 2.6% lower at €128.05

For Q2, Beiersdorf reported an organic sales growth (OSG) of 6.0% in its consumer business, falling short of the Visible Alpha consensus estimate of 7.1% and Jefferies' forecast of 6.3%.

The company’s overall OSG was 6.9%, slightly surpassing the consensus estimate of 6.6%. Despite this, the company reported a significant operating profit miss, with a 6% shortfall from company-provided expectations. 

“This could be partly explained by investment being shifted into H1 in marketing, digitalisation and sustainability efforts,” said analysts from RBC Capital Markets in a note. Marketing and selling expenses rose approximately 1.8% year-over-year, they added. 

Margins were a critical issue. Beiersdorf’s group H1 margin came in at 16.2%, well below the consensus estimate of 17.1% and Jefferies' expectation of 16.7%.

 The consumer segment’s margin declined to 15.9%, missing both consensus and Jefferies’ forecasts of 16.9% and 16.3%, respectively. The tesa segment, which focuses on adhesives, reported a margin of 17.8%, falling short of the anticipated 18.2%.

Beiersdorf has maintained its full-year guidance, targeting 6-8% organic revenue growth for both the Group and Consumer segments, and 2-5% growth for tesa. 

This guidance is below the consensus expectations of 8.2% for the consumer division and 2.7% for tesa. The company has also reaffirmed its EBIT margin guidance, expecting a slight increase of +50 basis points for the consumer segment and flat margins for tesa, compared to the previous year.