Whirlpool says war is causing “recession-level” decline in US appliance demandWhirlpool says war is causing “recession-level” decline in US appliance demand

Shares of home appliance giant Whirlpool Corp. tumbled nearly 12% on Thursday following its Q1 earnings and stark warning about consumer confidence.

• According to Whirlpool, the war with Iran “resulted in recession-level industry decline in the US as consumer confidence collapsed in late February and March.”
• The company’s Q1 sales were down about 10% year over year. In April, Whirlpool issued its “largest price increase in more than a decade,” with costs for consumers rising 10%. US appliance demand dropped 7.4% in Q1, Whirlpool said, including a 10% drop in March.
• “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,” CEO Marc Bitzer said on the company’s earnings call.

Whirlpool shares were down more than 20% in premarket trading yesterday, but pared some of those losses in early trading. It was one of its worst trading days in company history.

The Takeaway

It seems like all those “economic headwinds” that companies have been alluding to are finally blowing in, and the canaries in the coal mines are coming from unexpected places. Snap’s missed ad revenue came with the caveat that it included a “$20 to $25 million impact from the geopolitical headwinds in the Middle East experienced during March.” Even bougie burger chain Shake Shack,**** which absolutely tanked after its earnings yesterday, said the “conflict has led to business disruptions,” though in fairness, beef prices were more the issue this past quarter.

Can the war be blamed for this economic weakness in appliance and fast food sales?