Whirlpool CEO Marc Bitzer, left, and CFO Jim Peters are upbeat on appliances’ long-term prospects.
But demand will improve through back half and beyond, execs say
By Alan Wolf, YSN
Two of Whirlpool’s top executives painted a picture of soft appliance demand for the first half of the year, but anticipate a rebound starting in late spring and favorable long-term industry trends thereafter.
Speaking with analysts on a recent fourth-quarter earnings call, Chairman/CEO Marc Bitzer and Executive VP/CFO Jim Peters said macro-economic pressures that dampened consumer enthusiasm during the 2022 holiday season are carrying over into 2023. These include the inflationary environment and the sharp increase in mortgage rates that has stunted existing home sales.
But appliance demand should improve with each successive quarter, Bitzer said, as consumers who are priced out of new homes remodel their current quarters, and macro headwinds turn into tailwinds toward late Q2 or early Q3. Still, total full-year industry shipments in North America are projected to dip 4% to 6% on top of 2022’s 6.5% decline, although the 2023 tally will still come in 6% above 2019 levels.
Longer term, Bitzer is optimistic that the U.S. housing market will fully recover as mortgage rates stabilize, home prices improve, and increasingly itchy home buyers pull the trigger.
“I was responsible for North America ever since 2008 or 2009 so I’ve seen the ups and downs of the housing market,” Bitzer told investors. “You can’t ignore a market that has been undersupplied for 15 years … The demographics in North American household formation [are] solid and there’s quite a bit of pent-up demand … That explains why I’m fundamentally bullish on the mid- and long-term prospects of North America.”
Elsewhere during the call, Peters addressed a major supply-chain snafu late last year that caused a 5% shortfall in shipments and impacted planned fourth-quarter promotions. He said the disruption involved “one critical supplier” that provides a common platform of parts for multiple manufacturing locations and that the issue was resolved in mid-January. Bitzer, in response to an analyst’s question, said the company did not lose any retail floor space as a result of the production snag.
Bitzer also variously revealed that:
- Whirlpool’s share of the North American builder channel is now “well above” 50%
- The vendor stands to save between $300 million and $400 million in raw materials costs this year now that prices have started to fall
- The company has high hopes for its new Maytag Pet Pro laundry system that’s effective at removing pet hair and a forthcoming new design for Whirlpool brand’s two-in-one dishwasher
- He was unexpectedly thrilled by the company’s recent InSinkErator acquisition, thanks to “a very, very exciting” new product, due out this spring, which brings high consumer benefits and a further cost reduction. “I never thought you could [get] excited about garbage disposals,” he told the analysts. “But I did.”