Newton, Iowa — Successful implementation of new Maytag product models resulted in strong overall first quarter sales growth and market share improvement, said the major appliance maker, with majap movement offsetting declines in the company’s housewares segment.
Sales of majaps jumped 14 percent in the three months, ended April 3, hitting $947.3 million, up from $830.9 million in the year ago period.
Operating income in the first quarter for majaps, including restructuring charges, climbed 21.8 percent, reaching $55 million, up from $45.1 million. Excluding restructuring charges, majap segment operating income for the three-month period was $63 million, up 15.5 percent when compared with $54.5 million year-on-year.
Claiming a gain in majap market share for the third consecutive quarter in an environment of strong industry growth, Ralph Hake, chairman/CEO, said, “The company’s multiple product-launch strategy is being well executed, with new models entering the marketplace on schedule.”
Hake cited the Neptune top-loading washer, Neptune Drying Center, and Maytag and Amana ranges and dishwashers as new products contributing to strong first quarter majap results. The Neptune washer doesn’t have an agitator, while the dryer offers a bottom tumble dryer and an upper clothes-drying rack.
Declines in the Maytag housewares segment, attributable to a reduction in sales of Hoover floor-care products, have triggered restructuring for cost improvement and greater flexibility, as the company plays catch-up to healthier industry sales. Mid-line products are expected to build sales volume in the second quarter.
Housewares segment sales declined 16.4 percent in the first quarter to $178.8 million from $214 million year-over-year. Operating income slid 35.8 percent, down to $19 million from $29.6 million.
This is the first quarter Maytag has changed its segment financial reporting from two segments to three. New reporting segments are majaps, housewares and commercial products. Prior to this three months, housewares numbers were not broken out individually but included with majap totals.
Consolidated first quarter Maytag sales hit $1.2 billion, a 7.3 percent increase over the $1.1 billion recorded a year earlier.
Operating income reached $63.6 million in the first three months, down from $68.2 million in the same period a year ago. Excluding restructuring charges, operating income reached $71.6 million, compared with $77.6 million year-on-year.
Net income was $38.7 million in the first quarter, up 12 percent from the $34.5 million recorded in the same time frame in 2003. Excluding restructuring charges, first quarter net income hit $44 million, up from $40.7 million in the same period a year ago.
In the first quarter, year-over-year, Maytag said it experienced higher advertising expenses to support its product introductions. Additionally, rising costs of steel, resins and fuel were challenges and will continue to demand aggressive management, said the company.