S&P turns Hornbach view to negative

S&P said it revised its outlook for Hornbach Baumarkt AG to negative from stable and affirmed its BB+ issuer rating.

“We expect our adjusted EBITDA margins to contract to 7.2% in fiscal 2024 from 8% in 2023 after the company guided to lower annual earnings following weaker-than-expected half-year results. Hornbach has reported its half-year results, which showed a meaningful reduction in company-adjusted EBIT of 20.2% year-over-year driven by a 0.6% contraction in revenue, with both variable and fixed costs rising on the back of continued inflation in its key markets.

“In September, the group revised its company-adjusted EBIT guidance for the year, guiding to a decline of 10%-25%, compared with a decline of 5%-15% previously,” the agency said in a press release.

S&P warned a downgrade is possible over the next 12-24 months if earnings fail to meet the agency’s base case forecast.

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