Arcelik cuts 2026 outlook as weak demand, global competition weigh on earnings

By Reuters Newsan hour ago Updated

Oct 27 (Reuters) - Arcelik's ARCLK.IS revenue fell around 14% year-on-year to 139 billion lira in the third quarter as weakening demand, pricing pressures and intensifying international competition weighed on sales, prompting the Turkish home appliances maker to lower its 2026 outlook.

Arcelik, one of the leading export-oriented businesses of Turkish conglomerate Koc Holding KCHOL.IS, reported a net loss of 6.2 billion lira, around 14% wider than the market expectation of 5.5 billion lira.

Revenue fell 13.9% year-on-year to 139 billion lira, while adjusted EBITDA margin fell 1.7 percentage points year-on-year to 5.3%, as operating expense pressures and wage inflation weighed on profitability, the company said.

In its third-quarter earnings presentation published on Monday, Arcelik cited cost pressures stemming from regional conflicts and elevated operating expenses as it lowered its full-year adjusted EBITDA margin forecast to 5.75%-6.00% from 6.25%-6.50%. It also cut its capital expenditure guidance to 200 million-225 million euros from around 250 million euros.

The company's international sales accounted for 65% of consolidated revenue, while international markets revenue fell 7.3% on a yearly basis to 1.62 billion euros.

Europe remained a key drag, with regional sales falling 10% in euro terms, according to JP Morgan. The bank said Chinese competitors had begun raising prices in the United States, the Middle East and North Africa, and other regions, but that this trend had yet to become apparent in Europe. In Turkey, major domestic appliance wholesale volumes rose 16% year-on-year, but revenue fell 4.5% as sales shifted towards lower-priced products, JP Morgan said.

Rising debt has added to the company's challenges. Net debt rose 6.7% quarter-on-quarter to 218.1 billion lira, noted brokerage Ata Yatirim. The brokerage highlighted asset sales as an important part of Arcelik's debt-reduction efforts and warned that weaker demand, higher leverage and the reduced outlook could delay a recovery.

Arcelik shares rose 2.53% to 70.95 lira as of 1140 GMT on Tuesday, but remained down around 34% year-to-date, having fallen to their weakest level in four years in lira terms and their lowest in dollar terms since 2009.