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Investing.com -- Henkel AG (OTC:HENKY) & Co. KGaA (ETR:HNKG_p) on Thursday reported weaker-than-expected first-quarter results, primarily due to underperformance in its Consumer Brands segment.
The Düsseldorf-based consumer and industrial goods group cited volatile market conditions in North America and persistent supply chain challenges as key pressures during the quarter.
Henkel’s Consumer Brands unit, which includes categories such as Laundry Care and Professional Hair and Body Care, posted growth at the lower end of its guided range.
According to RBC Capital Markets, the softer performance was attributed to subdued consumer sentiment, ongoing retail destocking and operational constraints, particularly in North America. Fabric Care and Hair Colorants/Styling were among the few bright spots in the segment.
Adhesive Technologies delivered growth in line with expectations. A strong showing in Mobility & Electronics helped offset weaker trends across other areas of the division.
Despite the softer first-quarter showing, Henkel reaffirmed its full-year 2025 guidance.
For Consumer Brands, the company expects growth in the range of 1% to 3%, compared with consensus expectations of 1.5%.
Adhesive Technologies is guided to grow between 2% and 4%, with consensus pegged at 2.9%.
At the group level, Henkel projects revenue growth between 1.5% and 3.5% for FY25. The company also maintained guidance for an adjusted operating margin between 14% and 15.5%, in line with the consensus estimate of 14.7%.
Adjusted earnings per share are expected to increase by a low-to-high single-digit percentage, supported by roughly 1% from a share buyback program.
RBC Capital Markets maintains a "sector perform" rating on the stock with a price target of €80.
The brokerage described sentiment around the report as neutral, noting that Henkel’s reiteration of guidance reflects a degree of resilience despite a subdued start to the year.