Retailers, consumers and prices
The maker of Maytag and KitchenAid appliances posted a quarterly profit that left analysts’ expectations in the dirt. Try $2.51 a share compared with Wall Street’s estimate for $1.33. People, when a company tops expectations to the tune of $1.18, that’s crazy.
The strong results, not surprisingly, prompted the world’s largest appliance maker to raise its full-year outlook as well as its forecast for 2010 U.S. industry shipments.
The company had been hurt by the sluggish economy and weak housing market in North America — its largest market — but increasing demand for energy-efficient products and a federal stimulus program are luring shoppers back.
The world’s biggest appliance maker used cost cuts to offset weak sales as it reported a higher-than-expected quarterly profit. Whirlpool also raised its full-year profit outlook, citing downsizing and — yes, you guessed it — cost cuts as demand remains uncertain in many markets.
Sales at appliance makers like Whirlpool, known for its Maytag and KitchenAid brands, and Sweden’s Electrolux have suffered in the global economic slowdown as consumers trim spending on items not deemed essential.
Check out who has the highest customer satisfaction ranking among major appliance retailers.
It’s Best Buy, according to a study by J.D. Power and Associates.
The electronics retailer received a 797 out of 1,000 on the scale, performing particularly well in installation service and delivery service, J.D. Power said in a news release.
The study also takes into account sales staff, the store facility, merchandise and price.
Next was hhgregg at 794 and Lowe’s at 792. Sales staff and price were pluses for hhgregg, while Lowe’s did particularly well in store facility and merchandise, J.D. Power said.
The study is based on responses from more than 4,200 consumers who bought a laundry or kitchen appliance within the previous 24 months.
Also in the basket:
Dollar Tree posts higher profit, raises outlook
Williams-Sonoma post surprise profit; ups FY view
Charming Shoppes posts Q2 profit below Street view
Toys “R” Us offers discounts for trade-ins (WSJ)
The world’s biggest appliance maker, known for its namesake, Maytag and KitchenAid brands, was aided in the unexpected good news — analysts were expecting a loss — by its cost-cutting efforts. The company has frozen salaries, reduced its contribution to retirement plans and taken other steps to save money amid the recession.
Despite the profit, sales tumbled 23 percent in the first quarter. Whirlpool also said it now expects 2009 industry unit shipments in the United States and Europe to decline more than previously expected.
The recession, corporate cutbacks and lower demand for big-ticket items are not stopping LG Electronics from expanding its U.S. appliance business.
The beaten-down appliance sector got a shot in the arm on Black Friday as many consumers bought new washers for their laundry rooms, one spot survey shows.
Check out the Whirlpool of woe.
Five thousand. That’s the number of jobs Whirlpool plans to cut by the end of next year as it faces falling sales in North America and a potential global recession.
Appliance makers have already been hammered by the U.S. housing collapse. Now the credit crunch is likely to keep demand down, the world’s largest appliance maker said.
“The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy,” Whirlpool Chief Executive Jeff Fettig (pictured left) said in a statement.
Some of the job cuts had already been announced. Others were new. They all add to a slew of job cuts announced by corporate America in recent weeks.
That creates a spiral of people not being able to buy the goods the manufacturers make, which could cause manufacturers to cut more jobs as the economy keeps swirling down the drain.
Also in the basket:
Sam’s Club opening new store called Mas Club
Retailers slash Blu-ray player prices (WSJ)
Sears, Roebuck is looking to grow home-goods sales by adding stores away from malls as shoppers flock to new retail centers.
That off-mall strategy includes more dealer stores located in smaller, rural markets, and home appliance showrooms in big cities.
As the slumping U.S. housing market depresses demand for refrigerators and washers, manufacturers are looking to get the word out that newer appliances can save substantial amounts of energy.
The Association of Home Appliance Manufacturers, a group of appliance makers and suppliers, has drafted a report that quantifies the energy savings of some products.
Check out a nice GE convection oven.*** ***It may be for sale, along with the rest of GE’s appliances division.*** ***General Electric said it is seeking “strategic options” for the appliance business, which could include a partnership, spinoff or sale.*** ***Lots of consumers are familiar with GE refrigerators, dishwashers and the like. But the business accounts for only about 4 percent of the company’s sales. It takes a lot of dishwashers to equal one jet engine.*** ***Aside from aviation, the company’s other business lines include energy, electrical distribution healthcare and media & entertainment (think NBC television.)*** ***So why keep holding on to appliances, especially when that business is being hurt by the long-running housing slump?*** ***Also in the basket:*** ***Abercrobmie & Fitch profit tops view *** ***Macy’s to have FAO Schwartz boutiques in stores *** ***Old-style pumps balk at $4-a-gallon gas, too (Washington Post)******U.S. department store sales weak, but beat Street******(Reuters photo)