Husqvarna Navigates Divided Market, Accelerates Overhaul Amid Euro Slump

STOCKHOLM, SWEDEN – July 17, 2026 – Husqvarna Group is charting a course through turbulent economic waters, its second-quarter performance revealing a stark divergence between a struggling European market and a resurgent North America. The Swedish powerhouse behind outdoor power products and construction tools reported a 4% organic sales decline, prompting an aggressive acceleration of its corporate transformation, including an increased cost-savings target of SEK 3 billion by 2028 and a significant leadership refresh.

The interim report for January-June 2026 painted a picture of a company grappling with external pressures while proactively reshaping its internal operations. Net sales for the second quarter fell 6% to SEK 14,383 million, a drop CEO Glen Instone attributed to a perfect storm of headwinds on the European continent.

A Tale of Two Continents

The most significant drag on Husqvarna’s performance stemmed from its European operations. The Gardena Division, a key player in the garden watering and care market, saw its organic sales plummet by 11%. The Husqvarna Forest & Garden Division also felt the pressure, with a 3% organic sales decline. Instone pointed to a challenging mix of factors that dampened consumer appetite. “Ongoing geopolitical uncertainty and weak consumer sentiment continued to weigh on demand, while unfavorable weather in Europe during the first six weeks of the quarter further slowed sell-out and replenishment,” he stated in the report.

This assessment aligns with broader economic analyses of the region. Europe has been contending with persistent inflation, forecasted to be around 2.4% for 2026, which erodes consumer purchasing power. Geopolitical tensions, including the ongoing conflicts in Ukraine and the Middle East, have further soured economic sentiment, leading many households to curtail discretionary spending. Surveys have indicated that a majority of European consumers are experiencing financial distress and actively reducing consumption. Compounding this, a cool and wet start to the spring season across much of Europe directly impacted the critical selling period for gardening and outdoor equipment.

In stark contrast, the North American market provided a significant bright spot. The company reported “solid growth across most product categories” in the region, continuing a recovery that helped offset the European weakness. This resilience was particularly evident in the Husqvarna Construction Division, which bucked the negative trend to deliver 5% organic growth globally, suggesting robust activity in the professional building and infrastructure sectors, particularly in North America.

Fortifying the Financial Foundation

Despite the sales decline, Husqvarna demonstrated considerable resilience in its financial management. Operating income, when excluding SEK 349 million in items affecting comparability (IAC) related to restructuring, reached SEK 1,950 million. This figure was notably bolstered by a one-time SEK 240 million tariff refund related to the U.S. International Emergency Economic Powers Act (IEEPA). This non-recurring item helped lift the adjusted operating margin to 13.6%, slightly ahead of the previous year's 13.4%.

However, company leadership was clear that this refund masked underlying pressures. “Excluding the tariff refunds, earnings were impacted by lower sales volumes, continued inflationary pressure, higher raw material and logistics costs, as well as negative currency effects,” Instone commented. This transparency highlights the operational challenges the company continues to face.

A key success in the quarter was a dramatic improvement in cash flow. Free operating cash flow surged to SEK 3,903 million, a significant increase from SEK 2,459 million in the same period last year. The company attributed this strong performance to disciplined reductions in working capital. This financial prudence also allowed for a reduction in net debt to SEK 11.8 billion, strengthening the balance sheet at a critical time.

The Transformation Agenda Accelerates

Faced with persistent headwinds, Husqvarna is not standing still. The company announced it is raising the ambition of its cost-savings program, now targeting total savings of SEK 3 billion by the end of 2028. This represents a significant escalation of its efforts to create a leaner, more efficient organization.

These are not just abstract targets; the transformation is manifesting in concrete operational shifts across the group. The company is strategically optimizing its manufacturing footprint, initiating a process to consolidate parts of its Gardena production from Germany into its Czech facilities to “leverage the strengths of each site.” It is also streamlining logistics, having already completed a Group-wide transportation tender that reduced its supplier base by two-thirds.

Portfolio management is another key pillar of the strategy. Husqvarna is discontinuing its non-core stone diamond tools business within the Construction Division to sharpen its focus. Furthermore, it is launching a strategic review of the Powered Garden Business Portfolio Unit within Gardena, aiming for a more “asset-light and flexible operating model” supported by stronger partnerships with original equipment manufacturers (OEMs).

New Leadership for a New Era

To pilot this accelerated transformation, Husqvarna is bringing in new leadership. The company announced a significant refresh of its Group Management team, with a new Chief Financial Officer, Chief Procurement Officer, and President of the Husqvarna Construction Division set to join in the third quarter, followed by a new Chief Information Officer at the end of the year.

Instone expressed confidence that the new executives will be instrumental in driving the company forward. “They bring fresh perspectives, new capabilities, and valuable experience that will strengthen our foundation and help accelerate performance,” he said. This infusion of new talent is a clear signal that the board and CEO are committed to challenging the status quo and executing the deep-rooted changes required to navigate the current environment.

While acknowledging that external headwinds are expected to persist, Husqvarna’s leadership remains focused on its long-term vision. The combination of an aggressive internal overhaul, strategic portfolio adjustments, and a fortified leadership team is the company's formula for weathering the current storm and emerging stronger and more profitable.