Danish maker of luxury electronics Bang & Olufsen reported lower than predicted revenue for the fiscal year ended May 31 as a result of weak demand in Europe.

The company's revenue tumbled as much as 14% in the fiscal year, worse than the 10% Bang & Olufsen had predicted.

Consumers are increasingly reluctant to pay premium prices for Bang & Olufsen products, which include $15,000 BeoVision Eclipse TVs. Weak demand in Europe hurt the fourth-quarter results, and TV sales are still suffering, B&O’s CEO Henrik Clausen Clausen said on Monday. Primarily the company's mono brand network in Europe performed below expectations, as the anticipated normalisation of TV sell-in level did not materialise.

Free cash flow was negative 275 million kroner ($37 million) to 300 million kroner in the fiscal year, Bang & Olufsen said, compared with the 200 million to 250 million kroner predicted. Earnings margins also were narrower than projected, the company said.

However, Bang & Olufsen expects profitable growth in the financial year which has just started. “We expect to return to profitable growth in the financial year 2019/20, and we will, in connection with the publication of the annual report for 2018/19 on 11 July, provide more detailed financial targets,” said Clausen. Despite the current outlook adjustment, B&O has, according to Henrik Clausen, come a long way withthe necessary transformation of the business.