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Hornbach: A Solid Long-Term Buy After Short-Sighted Sell-Off

Late in 2015, German DIY retailer Hornbach Baumarkt (no ticker available on Seeking Alpha), which is part of Hornbach AG (OTC:HBAPF), shocked the stock market with a profit warning. The release came in typical Hornbach style: brief and with no attempt to sugarcoat:

Although the HORNBACH Group increased its consolidated sales for the period from September to November 2015 by 5.7% to € 926 million, based on initial preliminary figures consolidated operating earnings (EBIT) for the same period fell year-on-year by around 43% to € 21.3 million (2014/2015: € 37.2 million). This severe downturn in quarterly earnings related above all to the DIY store business in Germany. Despite sales remaining virtually unchanged on the previous year, the

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