Whirlpool is raising appliance prices again as the company grapples with weak consumer sentiment, higher costs, the war in Iran, and a changing tariff landscape.
“We’re doubling down and accelerating our cost actions despite higher inflationary headwinds,” CEO Marc Bitzer said Thursday during an earnings call.
The Michigan-based maker of refrigerators and washing machines implemented a 10 percent price increase in April, its largest in a decade. Competitors quickly followed with increases of their own, a move Whirlpool said suggested that higher prices were sustainable across the industry.
Whirlpool now plans to raise list prices again by about 4 percent, starting July 9, saying this is meant to offset three years of cost inflation that it had not fully passed on to consumers.
The decision comes after Whirlpool reported Wednesday that it would suspend its dividend as it focuses on reducing debt. The company said revenue fell nearly 10 percent in its most recent quarter, while North American sales of major appliances dropped 7.5 percent.
Whirlpool also cut its full-year earnings guidance roughly in half, lowering its forecast from $6 per share to a range of $3 to $3.50 per share. Shares fell more than 12 percent on Thursday.
During the earnings call, Bitzer told shareholders that consumer sentiment had fallen to its lowest level in 50 years. Sentiment was already weak by historical standards, he said, but the war in Iran has amplified consumer concerns about the rising cost of living.
While acknowledging that sentiment is “unsustainably low” and should eventually rebound, Bitzer said the current environment is clearly weighing on the appliance industry, particularly discretionary demand.
“The US appliance industry demand declined 7.4 percent in the first quarter, with March being down 10 percent,” he said, “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.”
There is still a stable demand for replacing broken or aging appliances, Bitzer said, but many are choosing more modestly priced models instead of higher-end products.
“For the majority of U.S. households, appliances or the purchase of appliances are a significant portion of their disposable income. So ultimately, it’s a decision against confidence the consumer has about the financial future,” he said. “It’s just a big ticket item. It’s not a $50 item purchase.”
Whirlpool CFO Roxanne Warner added that the company, which produces most of the products it sells in the United States domestically, was also hurt by the U.S. Supreme Court’s decision to invalidate the Trump administration’s emergency tariffs. Those tariffs were a centerpiece of President Donald Trump’s effort to rebalance U.S. trade relationships with other countries and incentivize domestic manufacturing.
After the ruling, she said, some competitors cut prices in anticipation of receiving tariff refunds.
Looking ahead, Warner said a new tariff regime being pursued by the Trump administration would benefit the company. The administration is seeking to strengthen import duties under Section 232, a federal law that allows the president to order tariffs or other measures if the Commerce Department determines that certain imports threaten national security.
“Our ongoing U.S. footprint optimization and the recent Section 232 tariff updates meaningfully strengthen our competitive advantage as a domestic producer,” Warner said. “Because we proudly build approximately 80 percent of the products we sell in the U.S. here in America, we’re structurally positioned to win in this new tariff landscape.”