2022 is shaping up to look a lot like 2021
By Alan Wolf, YSN
For most in the appliance industry, last year was the best and worst of times. And based on a forecast this week by Whirlpool’s senior leadership, you can expect the same scenario in 2022.
Speaking with investors yesterday on a fourth-quarter earnings call, Whirlpool CEO Marc Bitzer predicted a replay of last year’s hunger for home goods, accompanied by more production bottlenecks and even higher costs.
“While we, on one hand, strongly believe that consumer demand trends will remain strong, the ongoing pandemic, on the other hand, will continue to translate into supply constraints and cost inflation,” he projected.
Turning to North America, Chief Financial Officer Jim Peters said the region can expect “a continued robust demand environment … supported by broader home nesting trends, an undersupplied housing market, and a strong replacement cycle.” But the positive backdrop will be counterbalanced by “continued elevated constraints across the entire supply chain and persistent inflationary pressures.”
Bitzer said Whirlpool’s record financial performance last year — including a 12.3 percent increase in net sales and a whopping 66 percent hike in net earnings — demonstrated the company’s ability to weather any storm. “As we have successfully demonstrated in 2021, we do know how to execute in a challenging environment,” he told analysts.
Much of the manufacturer’s success was achieved through “pricing actions” that fully offset $1 billion in higher raw materials costs and other operating expenses, the company said, while a brisk replacement market for appliances helped drive revenue.
Nevertheless, rising inflation took a toll on Whirlpool in the fourth quarter, with net sales edging up just 0.9 percent, to $5.9 billion, and earnings falling 40.3 percent for the three months ended Dec. 31, 2021.
Business was somewhat more brisk in North America, where net sales rose 2.6 percent in Q4, and earnings before interest and taxes (EBIT) slipped 13.6 percent.
For the full year, revenue in North America rose 11 percent to $12.5 billion and EBIT climbed 26 percent to $2.2 billion, yielding a margin rate of nearly 18 percent.
Looking ahead, CFO Peters forecast “another year of strong growth” for the company in 2022, with revenue projected to rise between 5 percent and 6 percent despite inflationary headwinds and expected supply chain snafus.
