MILWAUKEE (AP) — Briggs & Stratton Corp. said Thursday, April 26th that it plans to cut about 460 jobs and stop selling gardening products through big retailers as demand for its goods shrinks.
The company, which is based in Milwaukee, is shifting some manufacturing work from an Alabama plant to another plant it has in China, or to contractors elsewhere in Southeast Asia, to save costs.
The company has been cutting back because of weaker demand for lawn and garden products in Europe and the U.S. due to the weak housing market of the past several years. The recent economic deterioration in Europe has further hurt demand. The cuts announced Thursday follow Briggs & Stratton's January announcement that it would close a plant in Tennessee and shift the work to Georgia, eliminating about 690 jobs in the U.S. It also said it would close a plant in the Czech Republic, cutting 77 jobs there.
"While we appear poised for an improved lawn and garden market here in the U.S., our longer term projections of the lawn and garden market in the U.S. and in Europe do not return to the peaks that we saw in 2004 and 2005 for the foreseeable future," Chairman, President and CEO Todd Teske said in a statement Thursday.
Trimming back on manufacturing of some engines in Alabama will affect 250 jobs there, Briggs & Stratton said Thursday. Manufacturing may be pared further at the Alabama plant next year — the company is also considering other assembly options for generators made there.
The rest of the job cuts, about 10 percent of its salaried workforce, will take place by mid-year, when its fiscal year winds down.
Briggs & Stratton had 6,716 employees as of July 3, the end of its 2011 fiscal year. The company's announced mass job cuts amount to an 18 percent reduction in its work force since then.
Briggs & Stratton also said that it will also stop offering lawn and garden products at national retailers starting in July, instead focusing on more profitable products sold through regional retailers and dealers. It will still sell items like pressure washers and generators through national retailers.
The company's stock fell 33 cents, or 1.8 percent, to $18.11 in morning trading. The shares have traded between $12.36 and $24.18 over the past year.
The company also reported on Thursday that its fiscal third-quarter net income fell 22.5 percent to $39.9 million, or 80 cents, per share, from $51.5 million, or $1.02 per share, a year ago.
Excluding a charge of 19 cents per share for shutting down the Czech and Tennessee plants, earnings were 99 cents per share. Analysts polled by Fact Set predicted earnings of 97 cents per share.
Revenue for the three months ended April 1 was flat at $720.1 million from $720.3 million. Analysts expected $741.8 million.
Looking forward, the company said it expects net income, not including restructuring costs, of $1.15 per share to $1.35 per share in 2012. Analysts expect $1.23 per share. The company predicts revenue will grow 2 to 4 percent, which suggests revenue of $2.15 billion to $2.19 billion. Analysts expect $2.21 billion.