Whirlpool Pushes 7% North America Price Hike Into Soft Demand
WHR is trading near its 52-week low of $25.73 (6.6% below the low) on elevated volume (3.2× avg).
Summary
Whirlpool is raising North America appliance prices 7% in the fourth quarter even as industry demand fell 3.3% in the third quarter. Management says pricing execution and new product launches delivered roughly 230 basis points of sequential margin expansion, but raw material, fuel and logistics inflation ate most of it, leaving a net 30-basis-point benefit. The company also claims its pricing is outpacing U.S. competitors based on sell-out data in its earnings presentation. This lands alongside the third-quarter loss of $237 million, or $3.80 per share, on an 8.8% sales decline reported earlier today, a result that marked its 11th revenue decline in the last 12 quarters and left the company heading for a full-year loss as costs mount and sales fall. The pricing push is the offset management is betting on. The risk is straightforward: pushing price into falling demand can cost volume, and the net margin gain is thin after cost headwinds.
At the time of this announcement, WHR was trading at $24.04 on NYSE in the Manufacturing sector, with a market capitalization of approximately $1.7B. The 52-week trading range was $25.73 to $94.82. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.