Whirlpool appeared to be in a prime position to thrive, producing about 80% of its major appliances at American factories at a time when President Donald Trump has emphasized domestic manufacturing jobs and more production at home.
This week, however, the company said that revenue dropped nearly 10% in its most recent quarter and sales of major appliances in North America tumbled 7%.
The company that also produces KitchenAid and Maytag products said that the Iran war has led to a “recession-level industry decline” that has shaken consumer confidence.
Whirlpool announced a 10% price hike in April, its largest in a decade, and said that a separate 4% price increase will happen in July to address “multiyear inflationary cost pressures.”
The company had absorbed the higher costs, choosing not to pass them on to customers, but that must change after the company posted a first quarter loss of $82 million, reversing last year’s gains.
CEO Marc Bitzer said Thursday that the North American slide in sales has a precedent.
“This level of industry decline is similar to what we have observed during the global financial crisis and even higher than during other recessionary periods,” he said during a conference call.
Whirlpool said that its performance has been impacted by the Supreme Court’s recent decision to strike down Trump’s emergency tariffs. Rival appliance makers are seeking refunds to reduce the impact of those tariffs, disrupting pricing in the industry further.
The Benton Harbor, Michigan, company estimated that the tariff impact on its competitors was about 10% to 15%, while the impact on its business was around 5%, according to details in its earnings presentation.
But with consumers already worried about high grocery prices and escalating gas prices, many are holding off on big-ticket purchases like major appliances and instead trying to make due with what they already have.
“People are looking at the price of replacing appliances and realizing it’s not something they want to deal with right now,” Mark Stevenson, managing director and product designer at Stove Shield, said in a statement. “Instead, they’re asking how to avoid the damage in the first place.”
Whirlpool also announced that it is slashing its full-year earnings forecast to a range of $3 to $3.50 per share, from its prior outlook of $6 per share. It’s also suspending its dividend while it looks to reduce its debt this year.
Shares tumbled more than 12% Thursday.