Whirlpool’s shares plunged more than 20% after the company said consumer confidence has fallen to “recession level lows” because of the Iran war, tanking demand for its big appliances.
The maker of Maytag, KitchenAid and Amana suffered a 9.6% sales drop in the first quarter. That was only slightly steeper than the US appliance industry’s 7.4% in the first quarter, with March being down 10%, Chairman and CEO Marc Bitzer said.
“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,” Bitzer told analysts on a Thursday earnings call.
In response, Whirlpool announced a 10% price increase — its largest hike in a decade — and said it will cut back on discounts to offset “inflationary cost pressures”.
Until now, Whirlpool has been holding back on price increases even as its costs rose due to tariffs and, more recently, fuel prices, Longbow Research analyst David MacGregor told The Post. It’s not just household appliances that aren’t selling, he added.
“Big ticket discretionary items are down across the board,” including sales of Harley Davidson motorcycles, lawnmowers and tool boxes, MacGregor said.
Whirlpool called out “persistent inflation, geopolitical turmoil and energy price shocks in late February and March.”
In April, the company said its promotional pricing around big sales periods like July 4 will be 10% higher and that list prices will increase by 4% in July. These actions combined are the most aggressive price adjustments the company has made in a decade.
The biggest sales period of the year, which is July 4th, Whirlpool is only discounting for two weeks as opposed to three, Bitzer said on the call.
Bitzer said the company’s strongest businesses in the quarter were its spare parts and repair businesses, “which is just an indicator that consumers are holding back on replacing products.”
The company slashed its full-year earnings guidance in half, cutting its forecast to $3 to $3.50 a share from a prior outlook of about $6 a share.
The company’s shares closed down nearly 12% at $48.21 on Thursday.
Last year, Whirlpool accused its major competitors — Samsung, LG Electronics and GE Appliances — of lowballing the costs of their products made overseas in order to avoid President Trump’s tariffs at the time.
The company shared its findings with government agencies, including the US Customs and Border Protection, which oversees tariffs.
A spokesperson for Whirlpool said “We continue to engage with US Customs and Border Protection (CBP) and it is our understanding that the investigation remains open and active.”
GE Appliances, now owned by China-based Haier, issued a statement at the time demanding that Whirlpool retract its statements to the administration.
“For Whirlpool to lodge unsupported claims with the Administration, based essentially on guesswork, is irresponsible and inappropriate,” the company said in a statement. “GE Appliances takes compliance seriously.”
After the Supreme Court ruling knocking down President Trump’s tariff policy in February, the appliance industry immediately lowered prices by as much as 2% on the belief that tariff refunds would be forthcoming, Bitzer said on the call.
