Source: Fortune
Summary
Whirlpool CEO Marc Bitzer and North America president Juan Carlos Puente described the current state of the company’s business as a “recession” due to the war in Iran’s impact on U.S. appliance demand. Industry shipments fell 7.4% in the first quarter, with March alone plunging 10%. Whirlpool reported an ongoing EBIT margin of just 1.3% and ongoing earnings per share of -$0.56. The company is responding with price increases, cost takeouts, and a suspension of the quarterly dividend.
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The numbers tell one story.
Whirlpool’s “recession” is marked by a 7.4% decline in industry shipments and a 15% drop in discretionary demand. CEO Marc Bitzer calls it a “big-ticket item” that consumers are hesitant to buy. The company is pulling back on promotional weeks and skipping select house promotions. Whirlpool is also executing $150 million-plus in cost takeouts and raised $1.1 billion through an equity offering to pay down debt. The board suspended the quarterly dividend, a “very, very painful decision” according to Bitzer. The company expects soft volumes and mix pressure to persist through Q2 and Q3.
When the CEO says “recession,” he means it’s time to repair, not replace.
Author: Evan Null
