Briggs & Stratton (BGG) reported earnings on Thur 15 Aug 2019 (b/o)

• Briggs & Stratton said Thursday its board has cut its quarterly dividend to 5 cents a share from 14 cents. The new dividend is payable Oct. 2 to shareholders of record as of Sept. 18. "This action will help us to direct more funds to debt reduction and investments in attractive commercial products and enabling technologies," Chief Executive Todd Teske said in a statement. 
• The company, which makes gasoline engines for outdoor power equipment, said earlier Thursday it is closing a Kentucky small engine facility by fall of 2020.

** charts after earnings **

 

Briggs & Stratton misses by $0.81, misses on revs; slashes FY20 guidance, reduces dividend

Reports Q4 (Jun) loss of $0.36 per share, excluding non-recurring items, $0.81 worse than the S&P Capital IQ Consensus of $0.45; revenues fell 5.9% year/year to $471.95 mln vs the $519.87 mln S&P Capital IQ Consensus.

"We are clearly disappointed with the fiscal 2019 results. The fourth quarter capped a difficult year of unprecedented market challenges and higher than expected operational inefficiencies encountered during the ramp-up of our business optimization initiatives," stated Todd J. Teske, Chairman, President and Chief Executive Officer. "The North America lawn and garden market slowed considerably as the quarter progressed from unusually wet, cool spring weather compounded by near-term market disruptions with channel partners. Europe set record high temperatures in June and July to impede channel inventory reductions. While we achieved operational improvements on many of the business optimization program start-up issues, continued inefficiencies offset the benefit of those improvements, including near-term labor availability challenges."

In connection with its regular quarterly meeting, the Board of Directors of Briggs & Stratton Corporation declared a quarterly dividend of five cents ($0.05) per share on the common stock of the Corporation. The dividend is payable October 2, 2019, to shareholders of record at the close of business September 18, 2019. This dividend is a reduction from the previous level of $0.14 per share.

• "This action will help us to direct more funds to debt reduction and investments in attractive commercial products and enabling technologies. It sets a payout that we believe is sustainable and can grow over time. Going forward, we will continue to direct funds in those areas that deliver the highest risk-adjusted return on investment"

Co issues downside guidance for FY20, sees EPS of $0.20-0.40, excluding non-recurring items, vs. $1.22 S&P Capital IQ Consensus; sees FY20 revs of $1.91-1.97 bln vs. $1.99 bln S&P Capital IQ Consensus.

• This sales outlook compares with the Company's previous preliminary expectation of approximately $2.01 billion in sales for fiscal 2020. The revision to the outlook principally relates to the lower base sales for fiscal 2019, a reduction in the Company's estimate of the North American market due to near-term disruption caused by channel partner transitions and the prolonged impact of weather on Europe, which has experienced hot and dry conditions in the early months of summer.
• The EPS revision from the prior, preliminary estimate of approximately $1.30 per share, relates to the lower sales outlook, in addition to the impact on margin from expected lower production to reduce inventories and expected continuation of some operational inefficiencies into the first half of the fiscal year.