August Majap Shipments Fall; Maytag Lowers Outlook
By Alan Wolf -- TWICE, 9/30/2002
Washington — Factory shipments of major appliances fell in August, ending a yearlong run of consecutive monthly gains as the shaky economy finally caught up with the category.
Underscoring the late summer downturn was last week's earnings warning from Maytag, which lowered its expectations for third quarter performance as a result of sluggish sales and a related production slowdown.
According to the latest monthly report from the Association of Home Appliance Manufacturers (AHAM), wholesale sales of white goods slipped 3.2 percent in August to 4.8 million units, due to weakness in the core cooking and refrigeration sectors.
Not even a sharp 39.2 percent gain in room air conditioner sales — spurred by an unusually torrid summer season — could carry white goods unit volume into the black.
Softening majap sales were cited by Maytag chairman/CEO in last week's profit warning, in which expectations for third quarter per share earnings were lowered from 79 cents to between 65 cents and 70 cents. "We expected some slowing… in the third quarter," he said, "and this environment has been more challenging than expected."
To trim inventory, Maytag is reducing production of refrigerators, washers and dryers and is increasing its planned factory shutdowns. The company is also delaying the launch of a new line of Atlantis washers due to problems with a sourced component part.
Nevertheless, Maytag still expects third quarter earnings to be up 35 percent to 45 percent over the year-ago period, Hake said.
Majap rival Whirlpool was slightly less pessimistic in its outlook, with chairman/CEO David Whitwam projecting an industry-wide sales gain of 1.5 percent over the record third quarter of 2001, and a 2 percent to 3 percent rise in fourth quarter shipments.
"Retailer inventory levels appear to be appropriate to support fourth quarter sales projections," he said.
For the industry at large, the hardest hit sector in August was cooking. The category was dragged down by a 19 percent dip in microwave oven orders, although sales of conventional ovens also cooled. Of the latter, sales of built-ins fell the farthest, with electric ranges off 5.3 percent and gas models down 9.5 percent.
Freestanding ranges fared better, with electric units down 3.7 percent while their gas-burning counterparts were essentially flat at 0.5 percent. Surface cooking units were also soft, with electric models down 3.1 percent and gas versions up 1.7 percent.
Last month's weakness in white goods also extended to refrigerators, which traditionally enjoy a summer season up-tick due to replacement sales. This August, however, shipments slipped 3.8 percent to 873,000 units, while fellow food preservationists — chest-style and upright freezers — collectively gained 18.5 percent in unit sales.
Home laundry also got soaked, with wholesale sales of washers off nearly 1 percent while dryers squeaked by with a 1.2 percent gain.
Maintaining its momentum was the kitchen clean-up category, which bucked the downward trend by growing 3.7 percent in August, led by disposers (up 6.8 percent) and portable dishwashers (spiking 8 percent).
Topping the charts last month was the home comfort category, which was buoyed by the aforementioned room air business but buffeted by a 22.8 percent drop in dehumidifier sales. Nevertheless, the sector managed a 24.2 percent gain, to some 211,000 units.
Reflecting last month's stalling majap sales was the so-called AHAM 6, a catchall category of core product sectors comprised of washers, dryers, dishwashers, refrigerators, freezers, and freestanding and built-in ranges. The industry amalgam slipped 0.3 percent in August to 3.2 million units, although year-to-date sales still reflected past triumphs: a 7.7 percent hike to 26.2 million units.
Industry Shipments Of Major Appliances* (In Thousands Of Units)| Product | 2002 August | 2001 August | % Chg. | 2002 8 mos. | 2001 8 mos. | % Chg. |
| ALL MAJOR APPLIANCES | 4,851.7 | 5,011.1 | -3.2 | 45,428.8 | 42,404.2 | 7.1 |
| COOKING - TOTAL | 1,588.8 | 1,821.3 | -12.8 | 13,651.1 | 12,818.8 | 6.5 |
| ELECTRIC RANGES - TOTAL | 411.5 | 428.0 | -3.8 | 3,341.9 | 3,138.3 | 6.5 |
| Free standing | 315.2 | 327.2 | -3.7 | 2,530.0 | 2,376.3 | 6.5 |
| Built-in | 56.9 | 60.1 | -5.3 | 477.0 | 448.1 | 6.5 |
| Surface Cooking Units | 39.4 | 40.7 | -3.1 | 334.9 | 314.0 | 6.7 |
| GAS RANGES - TOTAL | 254.0 | 252.9 | 0.4 | 2,020.1 | 1,841.9 | 9.7 |
| Free Standing | 217.1 | 216.0 | 0.5 | 1,717.7 | 1,561.1 | 10.0 |
| Built-In | 4.5 | 5.0 | -9.5 | 43.1 | 41.5 | 3.7 |
| Surface Cooking Units | 32.4 | 31.9 | 1.7 | 259.3 | 239.3 | 8.4 |
| MICROWAVE OVENS | 923.3 | 1,140.5 | -19.0 | 8,289.1 | 7,838.5 | 5.8 |
| HOME LAUNDRY - TOTAL | 1,054.7 | 1,054.1 | 0.1 | 9,460.7 | 8,877.8 | 6.6 |
| AUTOMATIC WASHERS | 567.5 | 572.7 | -0.9 | 5,023.2 | 4,738.9 | 6.0 |
| DRYERS - TOTAL | 487.3 | 481.4 | 1.2 | 4,437.4 | 4,138.9 | 7.2 |
| Electric | 383.3 | 379.7 | 1.0 | 3,490.8 | 3,275.4 | 6.6 |
| Gas | 104.0 | 101.7 | 2.2 | 946.6 | 863.5 | 9.6 |
| KITCHEN CLEAN UP - TOTAL | 905.1 | 873.0 | 3.7 | 7,632.5 | 7,133.2 | 7.0 |
| DISPOSERS | 439.1 | 411.2 | 6.8 | 3,657.0 | 3,518.7 | 3.9 |
| DISHWASHERS - TOTAL | 457.0 | 452.0 | 1.1 | 3,900.2 | 3,537.3 | 10.3 |
| Built-in | 446.2 | 442.1 | 0.9 | 3,801.5 | 3,447.4 | 10.3 |
| Portable | 10.7 | 9.9 | 8.0 | 98.7 | 89.9 | 9.9 |
| COMPACTORS | 9.0 | 9.7 | -7.6 | 75.3 | 77.2 | -2.5 |
| FOOD PRESERVATION - TOTAL | 1,092.0 | 1,092.7 | -0.1 | 8,039.8 | 7,453.1 | 7.9 |
| REFRIGERATORS | 873.3 | 908.1 | -3.8 | 6,495.8 | 6,110.7 | 6.3 |
| FREEZERS - TOTAL | 218.8 | 184.6 | 18.5 | 1,544.0 | 1,342.3 | 15.0 |
| Chest | 127.8 | 102.4 | 24.8 | 899.2 | 779.9 | 15.3 |
| Upright | 91.0 | 82.2 | 10.7 | 644.8 | 562.5 | 14.6 |
| HOME COMFORT - TOTAL | 211.0 | 169.9 | 24.2 | 6,644.7 | 6,121.4 | 8.6 |
| ROOM AIR CONDITIONERS | 179.2 | 128.8 | 39.2 | 5,944.4 | 5,397.1 | 10.1 |
| DEHUMIDIFIERS | 31.8 | 41.2 | -22.8 | 700.3 | 724.3 | -3.3 |
| AHAM 6** | 3,197.5 | 3,207.2 | -0.3 | 26,168.4 | 24,295.2 | 7.7 |
| *Domestic shipments only. Includes U.S. produced and imported products. ** AHAM 6 includes: Washer, Dryers, Dishwashers, Refrigerator, Freezers, and Free-standing and Built-in Ranges. Source: AHAM ©TWICE 2002 | ||||||
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