Whirlpool shares fall as inflation and weak demand drive revenue miss

Whirlpool shares declined after the company reported a third-quarter revenue drop of nearly 9% to $3.68 billion, a figure that fell short of the $3.91 billion expected by analysts. The appliance maker also posted an adjusted loss per share of $0.21, compared to the consensus estimate of $0.76 in adjusted earnings per share, according to Bloomberg data.

CFO Roxanne Warner attributed the results to an increasingly inflationary environment that has persisted from the second quarter into the third, combined with volume deleveraging driven by softer demand in the North American industry. Warner told Yahoo Finance that the industry has not yet caught up to the full impact of inflationary pressures that began in 2022, noting that inflation has risen 12% since that period.

In response to these conditions, Whirlpool plans to raise prices for the third time this year. The company will increase prices by 7% in the fourth quarter, following a 10% increase in April, which was its largest price hike in history, and a 4% list price increase in July. Warner stated that the management team is focusing on factors within its control amid these headwinds.

Segment results showed that revenue for major appliances in the North America business fell 8.3% year over year to $2.5 billion, missing Wall Street expectations. The small domestic appliance business saw revenue decline by almost 1% to $286 million, also below the expected $314 million. Despite the quarterly softness, the company reported that some items sold out in the third quarter, leading to approximately 40% year-over-year growth in US orders in October.

Whirlpool's results were released during a broader earnings season where FactSet data indicates that nearly a quarter of S&P 500 companies have already reported third-quarter earnings, with an overall growth rate of 29.5%. If this rate holds, it will mark the third consecutive quarter of earnings growth above 25%. Other major corporations scheduled to report results this week include Microsoft, Alphabet, Amazon, Exxon Mobil, Intel, Boeing, Ford, and Eli Lilly.