In This Article:
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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De'Longhi SpA (FRA:DLN) reported a robust 14.6% increase in turnover for Q1 2025, driven by a 7.2% organic growth in the household division and a 22% growth in the professional division.
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The professional coffee area, now accounting for 13% of total business, grew by approximately 22% in the quarter, reflecting strong performance in both commercial and home segments.
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The company received numerous awards for its product designs, including the Red Dot and IF Design Awards, highlighting its commitment to innovation and quality.
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De'Longhi SpA (FRA:DLN) launched a significant global marketing campaign featuring Brad Pitt, expected to enhance brand visibility and consumer reach.
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The company has successfully implemented a tariff mitigation strategy, relocating production to Southeast Asia and Europe, which is expected to minimize the impact of tariffs on its financials.
Negative Points
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The Starbucks cold coffee project was unexpectedly halted, although it was not factored into the company's guidance, indicating potential volatility in partnerships.
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The nutrition and food preparation segment experienced a slowdown, attributed to challenging comparisons with the previous year and market weakness in the United States.
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Despite strong Q1 results, De'Longhi SpA (FRA:DLN) maintained its full-year guidance, suggesting a cautious outlook due to potential macroeconomic uncertainties.
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The company faced increased logistics and freight costs, which impacted its overall cost structure despite improvements in gross margins.
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Inventory levels increased significantly, leading to cash flow challenges, although this was a strategic move to mitigate tariff risks.
Q & A Highlights
Q: Your Q1 revenue growth is almost 15%, but for the full year, you have left your revenue growth guidance unchanged. Is this just conservatism, or are you expecting some changes? A: We are not changing the guidance because we anticipated a stronger Q1 due to the change in perimeter. Our organic growth for the quarter is 8.8%, which is higher than the full-year guidance. However, we expect tougher comparisons in the second half, so we are maintaining our guidance.
Q: Can you elaborate on the net impact of tariffs and the mitigation actions that lead to the net 15 million impact? A: The 15 million impact is due to tariffs affecting not just China but also Southeast Asia and Europe. We have implemented a comprehensive tariff mitigation strategy, including sourcing diversification and commercial actions. We are relocating production to Southeast Asia and Europe to minimize the impact.