STOCKHOLM, Oct 16 (Reuters) - Sweden’s Husqvarna said on Monday net sales in its Consumer Brands Division would take a 1 billion Swedish crown ($123 million) hit next year as it cuts back business with a major U.S. client.
The division makes Flymo lawnmowers, Weed Eater trimmers and McCulloch chainsaws and sells mainly through top retailers such as Wal-Mart and B&Q.
“The Division has started to adjust capacity and other measures to mitigate short-term negative financial effects,” the company said in a statement.
“This will delay the operating income improvement trajectory.”
Husqvarna said it had decided to significantly reduce its volume of business with a top U.S. retailer in order to focus on accounts with more attractive opportunities. It did not elaborate and did not identify the U.S. retailer.
Husqvarna said its target of an operating margin of at least 10 percent for coming years remained unchanged.
$1 = 8.1289 Swedish crowns Reporting by Simon Johnson; editing by Jason Neely