BORNHEIM (dpa-AFX) - Persistent cost pressures will continue to weigh on the DIY and building materials group Hornbach in the coming months. 'While the spring season has started encouragingly so far, current geopolitical developments are expected to have a negative impact on cost trends and retail demand,' CEO Albrecht Hornbach stated on Tuesday, according to a press release. Consequently, the Board of Management expressed caution for the current year. Hornbach Holding's share price quickly turned positive after initial losses at the market open.

The stock recently rose by around 1.7 percent to 79.50 euros. After the price had recently approached its March low of 74 euros, the share was traded again above 80 euros for a time after just over a week. Investors reacted positively to CEO Albrecht Hornbach's description of the start of the spring season as encouraging.

For Thomas Maul of DZ Bank, the Group is entering the new fiscal year with its customary cautious financial targets. However, he views the start of the current spring quarter positively, noting it could have a favorable influence on market sentiment.

Management expects sales for the new fiscal year, which began in early March, to be roughly at the previous year's level of 6.4 billion euros or up to six percent higher, as the company announced in Bornheim during the presentation of final figures for the past 2025/2026 fiscal year (ending February).

Newly opened stores are expected to contribute to this growth: Hornbach reported that it recently expanded its market share in Germany to 15.7 percent. In other European countries, the Group's DIY stores sometimes hold an even stronger position: for instance, its market share exceeded one-third in the Czech Republic and more than a quarter in the Netherlands.

Meanwhile, Hornbach is only forecasting roughly stable adjusted earnings before interest and taxes (EBIT) for the current fiscal year. Analysts, by contrast, had expected an increase. However, top management anticipates a moderate rise in costs. The extent of this increase will depend, among other things, on ongoing collective bargaining negotiations in the German retail sector, the company stated. In the previous fiscal year, the company achieved an operating profit of 264.7 million euros.

Hornbach had already presented preliminary figures for the past fiscal year nearly two months ago, which have now been confirmed. Higher demand drove revenue upward. However, adjusted operating profit declined slightly. The company attributed the drop in earnings to higher personnel costs, as well as increased operating expenses, particularly for maintenance and IT infrastructure.

Net income attributable to shareholders decreased by 1.6 percent year-on-year to 138.4 million euros. The dividend is expected to remain stable at 2.40 euros per share./mne/stk