HORNBACH Q2 2025/26 presentation: Sales up 4.4%, e-commerce drives growth

HORNBACH Holding AG & Co. KGaA reported strong Q2/6M 2025/26 results, with first-half sales increasing 4.4% to €3,599.1 million and adjusted EBIT up 2.5% to €272.2 million, driven by 3.6% like-for-like sales growth and a robust Q2 performance. The DIY retailer maintained its full-year guidance, anticipating sales at or slightly above €6,200 million and adjusted EBIT at the prior year's level, likely in the upper half of the range. This performance is underpinned by significant e-commerce growth, strategic physical expansion, and market share gains in key European regions, supported by a 16% increase in free cash flow and a strengthened balance sheet despite doubled capital expenditures.

Analysis

HORNBACH Holding AG & Co. KGaA demonstrated resilient growth in its H1 2025/26 results, with total sales rising 4.4% year-over-year to €3,599.1 million, supported by a 3.6% increase in like-for-like sales. The company's performance accelerated in the second quarter, where adjusted EBIT grew 11% to €162 million, effectively offsetting a weaker Q1 and bringing H1 adjusted EBIT to €272.2 million, a 2.5% increase. This growth is underpinned by a successful omnichannel strategy, with e-commerce sales increasing to 13.1% of the total, and continued physical expansion evidenced by market share gains in Germany (+0.6pp) and the Netherlands (+1.3pp). Financially, the company strengthened its position, increasing free cash flow by 16% to €129.6 million despite more than doubling its capital expenditures to €106.7 million for new stores and modernization. The balance sheet improved, with the equity ratio rising to 46.9% and the leverage ratio (Net debt/EBITDA) declining to 2.4x. Management maintained its full-year guidance, anticipating net sales at or slightly above the prior year's €6,200 million and adjusted EBIT at the level of €269.5 million, with commentary suggesting results will likely land in the upper half of the guidance range, signaling confidence amidst macroeconomic headwinds.

Key Decisions for Investors

• Given the accelerating Q2 momentum, market share gains, and robust e-commerce growth, investors may view the fundamental picture as supportive for existing long positions, especially as the stock trades near its 52-week high.
• Investors should monitor the company's ability to maintain its stable 34.9% gross margin and deliver returns on its significantly increased capital expenditures, which are projected to exceed the prior year's €183.7 million.
• While the formal guidance for adjusted EBIT is flat year-over-year, management's indication of results likely reaching the 'upper half of the guidance range' presents a potential catalyst for positive earnings surprises or future guidance upgrades.