The Düsseldorf-based consumer goods giant may finally be turning a corner after 16 consecutive quarters of declining sales volumes. Recent market data from the U.S. and Europe shows positive trends, with U.S. sales rising 3% over the past four weeks—the first growth in a year—while European sales jumped 4%. Analysts note encouraging stabilization in market share, particularly in key categories like U.S. hairspray and European detergents. A major investment bank upgraded the stock from "Underweight" to "Equal Weight," citing improved organic sales growth projections (1.7% for 2025) and a higher adjusted EBIT margin forecast (15%, up 0.2 percentage points).
Profitability Outshines Revenue Weakness
Despite trimming its full-year organic growth outlook to 1–2% due to sluggish consumer demand, Henkel surprised with stronger profitability. Its adjusted operating margin rose to 15.5% in H1, prompting management to raise the lower end of its annual margin guidance. Cost-cutting measures, price adjustments, and a focus on higher-margin products like hair care are driving the improvement. The stock, trading near a decade-low valuation (P/E of 12), gained 2.6% post-earnings as investors weighed resilient margins against ongoing revenue challenges.
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