A Whirlpool production line in Clyde, Ohio.
By Alan Wolf, YSN
Two of the world’s largest appliance manufacturers said demand for their kitchen and laundry products will remain strong through 2021, although perhaps at a less frenzied pace.
The forecasts came amid the companie’s second-quarter earnings reports, which showed revenues rising 32 percent for Whirlpool and 39 percent for Electrolux year over year.
Earnings also soared, to $580 million for Whirlpool, up from $20 million in 2020, while Electrolux posted an operating profit of $228 million, compared to a year-ago loss.
Both attributed the robust results to consumers’ continued home improvement spending and the price hikes they imposed to offset rising costs. Whirlpool cited raw material inflation of roughly $1 billion for the year, driven primarily by the higher cost of resins and steel, while Electrolux pointed to shortages of microcontrollers and rising logistics and raw materials costs as its primary pain points.
In a statement, Jonas Samuelson, the Swedish manufacturer’s president/CEO, warned of even tighter constraints on electronic components in the current quarter, which will likely lead to “challenges to fully meet the market’s product mix requirements.”
He noted that the company has begun implementing additional price increases to counter the cost hikes, which will gradually take effect throughout the remainder of the year.
At the same time, Samuelson expects consumer demand to begin to “normalize” through year’s end, but with significant regional variances dictated by pandemic developments and impacts from stimulus programs.
For its part, Whirlpool said net sales in North America rose 22 percent to $3 billion in Q2 amid “sustained strong consumer demand,” and raised its full-year guidance for the region’s shipments from an increase of 6 percent to a better-than 10 percent gain despite “elevated” supply constraints and a volatile marketplace.
Whirlpool chairman/CEO Marc Bitzer said the company’s higher sales and earnings expectations reflect increased operational efficiencies, its expectations for continued high demand, and “the successful implementation of our previously announced cost-based pricing initiatives.”
On a conference call, Bitzer said the new normal, whatever that is, will arrive “a lot later than most people assume,” and will look very different from the previous normal due to changes in consumer preferences and e-commerce models.