Shares in Whirlpool (WHR) plunged to a five-year low on Wall Street after the iconic home appliances company cut FY26 earnings guidance in half.
The Michigan-based firm also warned the Iran war has caused a severe downturn in the US.
| Share price: $47.3 (-13.6%) | PE: 11.1x |
| Market cap: $3.5bn | Yield: n/a |
Whirlpool’s alert confirmed that soaring fuel prices and weakening consumer confidence are beginning to weigh on big-ticket purchases across the pond.
Dishwasher woes
In its Q1 results statement, the washing machines, dishwashers and fridges maker said: ‘War in Iran resulted in recession-level industry decline in the US as consumer confidence collapsed in late February and March.’
Dire Q1 results revealed a 6.1% drop in organic sales to below $3.2 billion as sales declined in Whirlpool’s core North American market.
The company behind the namesake Whirlpool brand as well as Maytag, Brastemp and InSinkErator, suffered a near-80% plunge in operating profits to $44 million.
With headwinds arising from the Middle East conflict stiffening, Whirlpool slashed its FY26 earnings guidance to a range of $3 to $3.50 a share, down from a previous forecast of roughly $6 a share. The indebted company also suspended the dividend as it prioritises reducing leverage.
Decisive actions
CEO Marc Bitzer insisted: ‘We acted decisively to address pricing and costs in the face of rapid deterioration in macroeconomic conditions.
‘Now, with Section 232 changes in favour of domestic manufacturers, Whirlpool Corporation is structurally positioned to win with our American-made products.’
Whirlpool shares are down over 80% on a five-year view and have lost more than 30% of their value year-to-date.
The latest steep decline is a blow to backers including Appaloosa Management’s David Tepper, the billionaire investor who has had a bullish view on the stock.
Whirlpool boasts iconic brands and the stock trades on a lowly prospective price to earnings (PE) ratio of 11.1, but the shares are cheap for a reason. This alert confirms the US consumer is pulling back on bigger-ticket categories such as kitchen and laundry appliances. Avoid.
Read the press release here: https://investors.whirlpoolcorp.com/news-and-events/news/default.aspx
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