Whirlpool global headquarters in Benton Harbor, Mich.
Price hikes in line with ‘sticky inflation’
By Alan Wolf, YSN
Whirlpool experienced a tough slog in the first quarter of the year, as a vexing North American market impacted sales and earnings.
The company reported net sales of $4.5 billion for the three months ended March 31, down 4.4% from a year ago, excluding the positive impact of currency fluctuations. Net loss for the quarter widened by 45% to $259 million year over year.
In North America, net sales slipped 8.1% to $2.4 billion, excluding currency fluctuations, which was attributed to an “unfavorable price/mix” and an industry decline of about 2%. EBIT margin (earnings before interest and taxes) fell 49% to $135 million due to the promotional environment and was partially offset by cost reductions, the company said.
During the quarter Whirlpool also announced promotional program price increases in North America to address what Chairman/CEO Marc Bitzer described as “sticky inflation.” The price hikes were “consistent with the value of our products and brands,” he said.
Elsewhere, the company enjoyed strong performance in Latin America and in its countertop appliance business worldwide; repaid $500 million of a maturing term loan; and closed on its European joint venture, which promises to deliver more than $750 million in net present value of future cash flows and $200-$300 million of incremental cash flow in 2025.
