Henkel Stock: Shares Tumble Despite Buyback Program

Henkel's stock plummeted by nearly 12% on Tuesday despite the company announcing positive 2024 results and a generous shareholder return package. The Düsseldorf-based consumer goods manufacturer reported an impressive adjusted operating profit increase to €3.1 billion, up from €2.56 billion in the previous year, with margins improving to 14.3% from 11.9%. Net profit after tax surged to €2.0 billion compared to €1.32 billion a year earlier. In response, the company plans to reward shareholders with a dividend of €2.04 per preferred share, a €0.19 increase from last year. Additionally, Henkel announced an ambitious share repurchase program worth up to €1 billion - representing approximately 2.7% of its capital base - expected to commence next month.

Cautious Outlook Triggers Investor Concern

The stock sell-off came as investors reacted negatively to Henkel's conservative guidance for 2025, which overshadowed the positive financial results and shareholder returns. The maker of Persil and Pritt anticipates organic growth between 1.5% and 3.5% for the current fiscal year, with a particularly challenging first quarter ahead. Most concerning to investors was the company's forecast of a 2-4% organic sales decline in its Consumer Brands segment during Q1, citing a challenging industrial environment and subdued consumer spending, especially in North America. The fourth quarter results of 2024 also disappointed analysts, with organic growth of just 1.1% falling significantly below the expected 3.6%. Henkel expects growth acceleration only in the second half of the year.