Henkel has reported a drop in sales of 1% in the first quarter to €5.2bn compared to the same period last year.
The German consumer goods company behind brands such as Schwarzkopf and got2b, said this was due to the “challenging geopolitical and macroeconomic environment” which has ramped up since the start of the year.
This has affected industrial demand and consumer sentiment, especially in North America, Henkel said in a statement.
Organic sales in Henkel’s consumer brands business fell 3.5% to €2.5bn, due to strong comparables and supply chain challenges.
”As stated back in March when we released our full year 2024 figures, sales in the new fiscal year got off to a rather muted start,” said Henkel CEO Carsten Knobel.
“At the same time, we have continued to achieve strong gross and EBIT [earnings before interest and tax] margins, plus we have kept working consistently and successfully on implementing our strategic growth agenda.
“We finished divesting the retailer brands business in North America earlier than expected, thus successfully completing the portfolio optimisation program in our consumer brands business unit that we announced at the start of 2022.
“This means we can now focus all our attention on growing our branded consumer goods business with innovations featuring technologies that offer relevant added value to consumers.”
Sales in Henkel’s hair division declined 1.6%, with positive growth on the consumer side driven by hair colourants and hair styling categories, but a drop in sales on the professional side was due to a challenging consumer environment in North America.
Laundry and home care sales, were down 4.1% while the rest of the consumer business saw sales decline 6.8% “as a result primarily of negative development in the body care business in the North America and Europe regions,” the company said.
Henkel expects earnings to improve in 2025 and a stronger second half, despite volatility and uncertainty in the global markets increasing since the start of the year.
The company’s financial outlook remains unchanged, with growth of between 1.5% and 3.5% expected for the full year across the business and between 1% and 3% for consumer brands.
“We continue to expect a stronger second half of the year, with contributions also coming from our innovations, which we will introduce into the market backed by continued investments in our brands,” said Knobel.
“At the same time, we expect strong gross and EBIT margins.
“The development we’ve seen in the first three months of the current fiscal year shows that we’re on the right track in this regard.
“This demonstrates that we have a clear and consistently implemented strategy and that we are delivering on our promises.”