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This week, however, the company said that revenue dropped nearly
10% in its most recent quarter and sales of major appliances in
North America tumbled 7%.
The company that also produces KitchenAid and Maytag products
said that the Iran war has led to a “recession-level industry
decline" that has shaken consumer confidence.
Whirlpool announced a 10% price hike in April, its largest in a
decade, and said that a separate 4% price increase will happen
in July to address “multiyear inflationary cost pressures.”
The company had absorbed the higher costs, choosing not to pass
them on to customers, but that must change after the company
posted a first quarter loss of $82 million, reversing last
year's gains.
CEO Marc Bitzer said Thursday that the North American slide in
sales has a precedent.
“This level of industry decline is similar to what we have
observed during the global financial crisis and even higher than
during other recessionary periods,” he said during a conference
call.
Whirlpool said that its performance has been impacted by the
Supreme Court's recent decision to strike down Trump's emergency
tariffs. Rival appliance makers are seeking refunds to reduce
the impact of those tariffs, disrupting pricing in the industry
further.
The Benton Harbor, Michigan, company estimated that the tariff
impact on its competitors was about 10% to 15%, while the impact
on its business was around 5%, according to details in its
earnings presentation.
But with consumers already worried about high grocery prices and
escalating gas prices, many are holding off on big-ticket
purchases like major appliances and instead trying to make due
with what they already have.
“People are looking at the price of replacing appliances and
realizing it’s not something they want to deal with right now,”
Mark Stevenson, managing director and product designer at Stove
Shield, said in a statement. “Instead, they’re asking how to
avoid the damage in the first place.”
Whirlpool also announced that it is slashing its full-year
earnings forecast to a range of $3 to $3.50 per share, from its
prior outlook of $6 per share. It’s also suspending its dividend
while it looks to reduce its debt this year.
Shares tumbled more than 12% Thursday.
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