HORNBACH Holding AG & Co. KGaA Q4 Earnings Call Highlights

Key Points

• HORNBACH posted solid fiscal-year growth, with group net sales up 3.8% to EUR 6.43 billion and like-for-like sales up 2.4%, outperforming the broader DIY market. Adjusted EBIT was roughly flat year over year and stayed within guidance.
• International expansion and market share gains remained a key driver, with sales outside Germany rising 5.5% and accounting for 53% of revenue. The company also added new stores across Europe and is preparing entries into Slovakia, Sweden, and Serbia.
• Management stayed cautious on the outlook for fiscal 2026/2027, expecting sales and adjusted EBIT to be around last year’s level, while flagging pressure from higher costs and continued investment spending. HORNBACH also proposed an unchanged dividend of EUR 2.40 per share.

HORNBACH Holding AG & Co. KGaA ETR: HBH reported higher sales for fiscal 2025/2026 and said adjusted earnings held close to the prior-year level despite a challenging European retail environment marked by geopolitical uncertainty, higher costs and weak construction activity in Germany.

Speaking at the company’s Analyst and Investor Conference, Albrecht Hornbach said group net sales rose 3.8% to EUR 6.43 billion, in line with the forecast issued in May 2025. Like-for-like sales increased 2.4%, which management said was significantly better than the broader DIY sector based on figures from the industry association BHB.

Adjusted EBIT for the HORNBACH Group was EUR 264.7 million, “remaining virtually at the previous year’s level,” Albrecht Hornbach said. CFO Joanna Kowalska later said adjusted EBIT was EUR 265 million, down 1.8%, and within the company’s guidance range.

Sales Growth Outpaces DIY Market

Erich Harsch, CEO of HORNBACH Baumarkt AG, said the DIY retail business recorded net sales of EUR 6.1 billion, up 4.1%. Adjusted for store size and currency effects, sales rose 2.4%. Customer footfall increased 3%, while the average ticket rose 0.6%.

Harsch said store productivity also improved, with average annual net sales per DIY store reaching EUR 34.9 million. Sales per square meter rose 1.9% to EUR 2,903. He said HORNBACH continued to lead other market participants on this metric.

The company also reported market share gains in several countries where it has reliable market data. Harsch said HORNBACH’s market share rose to 29.4% in the Netherlands, 38.8% in the Czech Republic, 15.0% in Switzerland, 15.7% in Germany and 17.6% in Austria.

Kowalska said the company benefited from its international footprint, with sales in European markets outside Germany rising 5.5% and accounting for 53% of group revenue. She said countries outside Germany contributed about 76% of adjusted EBIT.

Online Sales and Store Expansion Continue

Online sales remained a key part of HORNBACH’s interconnected retail strategy. Albrecht Hornbach said online sales contributed 12.7% of the DIY division’s total revenue in fiscal 2025/2026 and increased 7.1% year over year to EUR 771.4 million.

Harsch said HORNBACH Baumarkt AG operated 176 stores at the end of the fiscal year, including 97 DIY and garden centers in Germany, three Bodenhaus specialist flooring stores and 76 DIY and garden centers in eight other European countries.

Four new stores were added during the year: Duisburg in March 2025, Eisenstadt in Austria in September, Bucharest-Colentina in Romania in September and Timișoara in Romania in October. A new Bodenhaus specialist flooring store also opened in Mainz-Kastel in November.

The company has kept expanding in the current fiscal year. Harsch said HORNBACH opened a new store in Trnava, Slovakia, on April 22, with a sales area of 17,600 square meters. Construction has begun on a new store in Graz, Austria, expected to be completed by autumn, and the company broke ground in Hedenstorp in Jönköping, Sweden, where a ninth Swedish store is planned for spring 2027.

HORNBACH is also preparing to enter Serbia. Harsch said sites have been secured for key urban regions, including Belgrade, Novi Sad, Niš and Subotica, and are in the approval phase. Construction of the first Serbian location in southern Belgrade is scheduled to begin in summer 2026, with another location expected to follow later, likely in autumn 2026. In response to an analyst question, Harsch said the first Serbian store could open in late 2027 or spring 2028.

Margins Supported by Assortment, Own Brands

Kowalska said gross profit rose by EUR 88 million and the gross margin improved to 35%. Costs increased by EUR 75 million, or 3.8%, allowing the company to offset higher expenses with higher gross profit. The cost ratio remained stable at 26%.

Personnel costs rose 4.5% to EUR 1.2 billion, reflecting planned wage increases and additional employees for new stores. General and administrative costs also increased due to higher personnel costs and IT infrastructure spending.

In the Q&A session, analysts asked about the stronger gross profit performance. Kowalska pointed to HORNBACH’s broad supplier base, ongoing product assortment changes and own-brand development. She said about 20% of the assortment changes within a year, allowing the company to respond to market and customer demand. Own brands also contributed, with growth of 10% in the year, she said.

Kowalska said direct product supply from Asia accounts for 5%, while indirect merchandise from Asia is approximately 20%, a structure she said helps position the company well during supply chain disruptions.

Cash Flow, Balance Sheet and Dividend

Operating cash flow rose to EUR 375 million, which Kowalska said fully covered investments. CapEx amounted to EUR 220 million in fiscal 2025/2026, reflecting the company’s organic expansion strategy.

The equity ratio increased to 44.5%, while net financial debt rose 5.6%, primarily due to the renewal of real estate leases. Kowalska said HORNBACH placed a EUR 300 million promissory note loan in the current first quarter to refinance early a bond maturing in October and to smooth its maturity profile.

The management board and supervisory board proposed a dividend of EUR 2.40 per share for fiscal 2025/2026, unchanged from the prior year. Albrecht Hornbach said the payout ratio would be 28% and noted that the company has paid an undiminished dividend every year for the past 39 years.

Outlook Remains Cautious

For fiscal 2026/2027, management expects group net sales to be at or slightly above the prior-year level, corresponding to a range of minus 2% to plus 6%. Adjusted EBIT is expected to be roughly at the prior-year level, within a range of minus 5% to plus 5%.

Kowalska said higher purchase prices in some product categories, logistics cost increases and a moderate rise in personnel and store operating costs could weigh on the retail margin. She also said CapEx is expected to be significantly above the prior-year level due to expansion, existing-store investments and spending on IT and artificial intelligence.

Harsch said the spring business had started positively, with HORNBACH continuing to outperform the industry in the first two months of the year. He noted strong development in non-seasonal project categories, though May was affected by two fewer sales days due to public holidays.

Management also highlighted technology initiatives, including the company’s “MACHER Assistent,” an AI-based tool designed to help customers and store employees with project advice, planning and product selection. Harsch said the assistant uses verified information from HORNBACH systems and is available through the app, online store and internal employee tools.

Albrecht Hornbach also outlined management changes tied to his planned departure at the end of October. Harsch is set to become chairman of the board of management of HORNBACH Management AG on Nov. 1, 2026, while Kowalska will be responsible for finance functions as well as audit, legal, compliance and investor relations. Jan Hornbach and Nils Hornbach will also join the board with responsibility for real estate, new markets, specialty retail and digitalization.

About HORNBACH Holding AG & Co. KGaA ETR: HBH

HORNBACH Holding AG & Co KGaA, through its subsidiaries, develops and operates do-it-yourself (DIY) megastores with garden centers in Germany and other European countries. Its stationary stores offer hardware/electrical, paint/wallpaper/flooring, construction materials/timber/prefabricated components, sanitary/tiles, and garden hardware/plants. The company also provides a range of construction materials and tools stocked and supply services, as well as professional advice for various product ranges and lines of trade, including shell construction and roofing; interior fittings and facades; and civil engineering, and garden and landscape construction materials for construction, conversion, or refurbishment projects.

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