Whirlpool thinks you’ll buy more appliances after the election
Whirlpool Corp.’s earnings may be down significantly year on year, but still cleared the low bar that Wall Street set for the company. Shares of the seller of washing machines and other large appliances rose as much as 9% in early trading after reporting earnings per share of $3.43, well ahead of the $3.19 estimate (but below $5.45 for the same quarter in 2023).
One thing became clear during the conference call that followed this release: executives really think the looming election has been a clear negative for their business.
“Consumer confidence remains low and is impacted by the uncertainty ahead of the upcoming elections,” CEO Marc Bitzer said.
“Here in the US, with the election cycle going on, we do just expect an unusual pattern that will be a little slower and then should pick up significantly like we’ve seen historically,” James Peters, chief financial and administrative officer, said.
There were 10 references to the election on the call and 7 mentions of (poor) consumer sentiment. That compares to zero mentions of either during the Q3 2020 call (granted, we all may have had bigger things on our mind). But it’s also much more than 2016, when there were just three references to the election and consumer sentiment.
Who knows if a preelection malaise is more of an economic drag compared to prior cycles. But management teams are certainly talking about it more.
There are 15 (!) mentions of election uncertainty in the latest Fed Beige Book, its report of economic anecdotes from around the country.
— Jeanna Smialek (@jeannasmialek) October 23, 2024
That's up from 7 in October 2020 and 8 in October 2016. https://t.co/IsQNLkuZyV
It’s somewhat curious that Whirlpool’s C-suite is more focused on just getting the election over with, rather than expressing at least some concern about the outcome. The company was among those more whipsawed by shifts in trade policy during the Trump administration.
After Trump announced tariffs on imported washing machines in January 2018, Bitzer hailed this as “without any doubt, a positive catalyst for Whirlpool.” Then he watched as a separate set of tariffs raised the company’s expenses and contributed to a 36% decline in the share price that year.
Combining its focus on the need for the US housing market to reboot and its sensitivity to changes in trade policy, Whirlpool may be one of the companies for which decisions made in DC — whether at the White House or the Eccles Building — matter the most.
