Automatic translation: Originally published in Danish 29/09/2026, 11:45 GMT. Give feedback here.

Bang & Olufsen published preliminary figures for Q1 2026/27 today, after confidential figures from an internal working document were mistakenly sent to a Danish business media outlet by an external PR agency. The full trading statement has therefore been brought forward from October 7 to tomorrow, September 30, at 8:00 AM, followed by a conference call at 10:00 AM.

Sales reached DKK 530m, corresponding to 2.2% growth in local currencies vs. the consensus of DKK 520m (range DKK 506-534m), and the gross margin landed at 59.4% vs. the consensus of 57.8%. According to our calculations, this is the highest gross margin the company has reported in a single quarter, and it was achieved without any one-off items of the type that boosted Q4. EBIT before special items was DKK -23m vs. the consensus of DKK -18.4m (range DKK -6m to -31m).

The composition is worth noting: the gross profit of approx. DKK 315m is around DKK 14m higher than consensus implicitly assumed, while EBIT is DKK 5m lower. The deviation thus lies entirely on the cost side, where the implicit capacity costs are approx. DKK 7m higher than in Q1 last year, despite a reduction of around 60 employees in Q4 and guidance for flat capacity costs for the year. In our view, this reflects the phasing of store openings and the rollout of the new retail IT platform, but it is the most obvious question for tomorrow's call.

For the investment case, the most important figure (seasonally a low quarter) is not sales, but the relationship between sell-out and sell-in.

Like-for-like sell-out increased by 7% at the group level and 14% in Branded Channels, while sales in Branded Channels increased by 9.9% in local currencies. By comparison, the picture in Q1 last year was a sell-out in Branded Channels of -1% and a sell-in development of -10%. The gap between the two has thus narrowed to around 4 percentage points from double-digit levels throughout 2025/26, and this is precisely the mechanism upon which the guidance for 2026/27 rests. On the FY call, Wendelboe was explicit that the guidance necessitates a sell-out-driven trajectory with stable inventories at partners, and Q1 is the first quarter where that assumption can actually be verified in the figures.

Win Cities delivered 19% sell-out growth vs. 16% in the same quarter last year, which, by our count, is the ninth consecutive quarter of double-digit growth.

The category mix supports the quality of sales. Staged grew by 9% and Flexible Living by 16%, while On-the-go fell by 19% as a result of lower sales in the etail channel. This is a deliberate consequence of the selective distribution strategy, and since On-the-go has historically had a gross margin of around 40% vs. just under 60% in the other two categories, the decline is margin-accretive. Working backwards from the category growth, the figures point to sales in Brand Partnering & other activities of around DKK 65m vs. DKK 62m last year, which indicates a continued, yet modest, ramp-up of TCL. That figure should be confirmed tomorrow, and it remains the central variable for our licensing DCF.

Guidance for 2026/27 is reiterated with 1-5% sales growth, an EBIT margin before special items of 1-3%, and free cash flow of DKK 25-100m. The range corresponds to an EBIT of approx. DKK 25-78m for the year, and with DKK -23m in Q1, the remaining nine months must deliver DKK 48-101m vs. DKK 13m in the same period last year.

However, it is worth noting that the comparison base is affected by the fact that Q2 last year included extraordinary anniversary marketing costs of DKK 38m that will not be repeated, while Q4 included a tariff refund of DKK 20m. The remaining product launches are expected no earlier than Q4, which shifts both sales and earnings towards the second half of the year. Consensus stands at DKK 2,580m in sales and DKK 51m in EBIT for the year, i.e., in the upper half of the guidance range.

The cash flow side confirms that the turnaround is real. Free cash flow was positive at DKK 6m vs. DKK -135m in Q1 last year, an improvement of DKK 141m in what is seasonally the weakest quarter of the year. This underpins the FCF inflection we assumed following the annual report.

Conversely, cash sufficiency stood at DKK 230m vs. DKK 294m at the turn of the year, while available liquidity was DKK 80m vs. DKK 94m. The undrawn portion of the committed credit facility thus amounts to DKK 150m vs. DKK 200m at the turn of the year, which is the same level as at the end of Q3 2025/26. With a cash drain of DKK 35-45m to secure DDR4 supply included in this year's outlook and a US tariff refund of DKK 20m not yet received at the turn of the year, the phasing of liquidity is one of the items we will be looking for tomorrow

Overall, the quarter confirms the part of the case concerning self-help. Commercial execution is working in the channels the company itself controls, the gross margin continues upward, and cash flow has turned. What the quarter cannot prove is whether the cost base will be kept flat throughout the year and whether the back-weighted launch calendar will deliver.

Disclaimer: HC Andersen Capital receives payment from Bang & Olufsen for a Corporate Visibility/Digital IR subscription agreement. Michael Friis, Sep 29, 2026 at 1:45 PM