Henkel Q1 2025 consumer brands sales decline US personal care demand — I know you need concise, citable numbers and clear attribution fast; below is a focused breakdown of what fell, why, and what to model next.
Q1 2025 at a glance
The headline: group sales fell 1.0% year‑on‑year to €5.24 billion, with the consumer brands division showing a larger organic decline. Management singled out weaker US personal‑care and laundry demand as primary drivers, along with strong comparables and supply‑chain issues.
| Metric | Q1 2025 | Year‑on‑year change |
|---|---|---|
| Group sales | €5.24 billion | Down 1.0% |
| Consumer brands sales | €2.48 billion | Organic down 3.5% |
| North America sales (organic) | €1.43 billion | Down 3.4% |
| Hair division | — | Down ~1.6% (consumer hair supported by colorants/styling; professional channel down in NA) |
| Laundry & home care | — | Down ~4.1% |
| Rest of consumer business (incl. body care) | — | Down ~6.8% (notably negative in NA and Europe) |
What drove the consumer brands decline?
Start with the proximate causes management provided. Henkel pointed to: weak US consumer demand (personal/body care and laundry), difficult prior‑year comparables, supply‑chain impacts that affected availability and mix, and a challenging macro/geopolitical backdrop that dented industrial and consumer sentiment. CEO Carsten Knobel said the "new fiscal year got off to a muted start" but emphasized continued strong gross and EBIT margins.
Regionally, North America was the weakest spot: organic sales there fell 3.4% to €1.43 billion, and the region accounted for roughly 28% of 2024 revenue — making NA exposure material to group results. Category detail shows consumer hair roughly stable with support from colourants and styling, while the professional hair channel weakened in North America. Laundry & home care was a clear drag (about a 4.1% decline), and body care/other consumer lines fell steeply (around 6.8%), driven primarily by lower demand in North America and Europe.
Transitioning from causes to composition: part of the decline reflects deliberate portfolio streamlining. Since 2022 Henkel has divested or discontinued more than €1 billion of brands and completed the sale of its North American retailer brands business earlier than planned — actions that improve long‑term mix but reduce near‑term sales and complicate year‑over‑year comparisons.
Management reaction, guidance and margins
Henkel left full‑year guidance unchanged: group growth target of 1.5% to 3.5% and consumer brands target of 1% to 3%. Management expects earnings to improve in 2025 with a stronger second half, attributing potential recovery to innovation and brand investment. Despite the top‑line softness, Knobel highlighted resilient profitability metrics — gross and EBIT margins remained strong in the quarter — which mitigates immediate earnings risk even if volumes stay soft.
Analytical implications and recommended modeling changes
Below are concise, actionable steps you can apply to forecasts and investor messaging.
- Isolate North America personal‑care exposure in revenue and volume models: treat NA personal‑care categories (hair, body, laundry) as under short‑term pressure and reduce volume assumptions for H1 2025, with recovery shifts into H2 2025.
- Adjust mix assumptions rather than assume immediate pricing recovery: expect portfolio rationalization and channel shifts (retailer‑brand divestments) to exert downward pressure on near‑term sales while supporting margins.
- Stress‑test margins for further portfolio transactions and slower sell‑through: although margins held up, run sensitivities for additional divestitures and promotional activity if consumer sentiment remains weak.
- Monitor peer US performance and retail sell‑through data: Henkel’s release lacks detailed peer comparatives; track P&G and Unilever Q1 trends and retail inventory/promotions to validate whether weakness is company‑specific or category‑wide.
Conclusion
Henkel’s Q1 shows a clear mismatch between resilient margins and weaker top‑line performance: group sales fell 1.0% to €5.24 billion while consumer brands were hit harder, down 3.5% to €2.48 billion, primarily by weak US personal‑care and laundry demand and by portfolio moves. For analysts and strategists the priority is to rework NA volume and mix assumptions, incorporate the impact of recent divestments, and watch H2 margin commentary and execution of innovation plans — the company retains unchanged guidance and expects a stronger H2, but near‑term results will hinge on US consumer trends and how quickly Henkel converts innovation spend into sell‑through.
