A pair of key industry reports issued last month proffered divergent snapshots of the state of the appliance industry as it headed into spring 2017.
From Whirlpool, a massive, bellwether business spanning the mass to class channels, came word of a solid first quarter, ended March 31.
But at the same time, a monthly volume assessment from the industry’s go-to trade association showed flat performance last month as hhgregg, a former top 10 majap retailer, began its swan song, and sales at Sears continued to decline.
Yet from Whirlpool’s perspective everything was rosy, at least for its North America division. Continental sales rose a hearty 7 percent (excluding the impact of currency fluctuations), to $2.6 billion, and first-quarter GAAP operating profit (generally accepted accounting principles) totaled $287 million, or 11.2 percent of sales, compared with $253 million, or 10.5 percent of sales, year over year.
As company chairman/CEO Jeff Fettig underscored, both North and Latin America enjoyed “strong growth and margin expansion” for the period, as unit volume growth and cost productivity more than offset higher raw materials costs.
The situation was quite different in Europe, where weakness in the U.K. and integration indigestion from Whirlpool’s $1 billion buyout of Italy’s Indesit capped net sales at $4.8 billion, a 3 percent increase excluding currency fluctuations, and limited net earnings to $153 million, a 2 percent gain.
As president/COO Marc Bitzer noted, “Our strong performance in North America and Latin America clearly demonstrates our ability to create value in challenging environments.”
Yet challenging would well describe total U.S. industry performance in March. According to the latest factory shipment tallies from the Association of Home Appliance Manufacturers (AHAM), unit volume for the industry’s six core categories (washers, dryers, dishwashers, refrigerators, freezers, ranges and ovens, a.k.a. the AHAM 6) together mounted a mere 0.6 percent uptick last month, and a modest gain of 2.5 percent year to date through April 1.
Dragging down the numbers were freezers, which showed a 22.3 percent decline in March. Also putting in a disappointing performance was dishwashers, which were essentially flat with a gain of 0.8 percent.
The two categories were a drag on their AHAM 6 brethren, which fared better last month. Refrigerators, for one, were up 2.7 percent, to some 971,600 units, while washer shipments rose 3.2 percent to over 1 million units and gas dryers heated up the business with an 8.5 percent spike.
Unfortunately electric dryers, which accounted for about six times the volume of its gas counterpart, experienced a slight 1.6 percent downturn.
Of all the appliance categories charted by AHAM, cooking had the strongest month, up 5.4 percent overall on gains in gas cooktops (up 19.1 percent); microwave ovens (up 8.3 percent); gas ranges (up 6.9 percent); and wall ovens (ahead 5.6 percent).
Conversely, the home comfort category cratered as dehumidifier shipments plummeted 34.3 percent and ACs slipped 1.2 percent.
All told, total March shipments were flat at 0.3 percent, and year-to-date shipments through April 1 rose 3.1 percent over 2016.
But white-goods retailers and manufacturers take heart: Whirlpool’s projections for full-year industrywide unit shipments in the U.S. range between 4 and 6 percent, meaning demand will soon be kicking into high gear.
Nudging things along will be the online channel, a newfound love of appliance shoppers. While digital was slow to gain traction with white goods, e-tailers made up for lost time last year by racking up a 38 percent increase in sell-through, to some $4 billion according to The NPD Group.