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Stockholm, Sweden — Electrolux said sizzling first-quarter results in North America were offset by unfavorable exchange rates and weakness in Europe.
Net profits fell 28 percent to 361 million Swedish kronor (SEK) for the three months, ended March 31, while net sales slipped 2.1 percent to 25.3 billion SEK.
Operating income increased 15 percent excluding the 318 million SEK impact of currency fluctuations.
In a statement, president/CEO Keith McLoughlin said Europe will continue to be a drag on business this year due to the “negative macro environment resulting in falling demand of domestic and professional appliances.”
In contrast, sales in North America rose 8 percent to 7.7 billion SEK and operating income climbed 249 percent to 457 million SEK due to volume growth and a greater mix of pricier, high-margin products. The company said it continued to capitalize on the majap momentum by increasing its marketing spend to support the Electrolux and Frigidaire brands.
McLoughlin, who previously headed the North America unit, described the majap market here as “gradually improving … We are seeing evidence that the recovery in the housing market is finally generating increased consumption of appliances,” prompting a company forecast of 3 percent to 5 percent growth this year industrywide.
He added that following an extended period of trading down to less-expensive products, consumers are now purchasing more high-end models, yielding a higher-margin mix.
“Combined with a strong product offering in all price segments and access to all of the important distribution channels, we remain confident that we can improve our market position in North America in 2013,” McLoughlin said.
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