Electrolux warned on profits Monday, after the Swedish appliances manufacturer was hit by surging costs, weakening consumer demand and ongoing supply chain difficulties.
The Stockholm-based group said demand in Europe and the US had decreased at a “significantly accelerated pace” in the current quarter when compared to the previous three months, hit by high inflation and low consumer confidence.
In addition, supply chain “imbalances” and increased costs meant third-quarter earnings were now expected to decline “significantly” compared to the second quarter.
In response, Electrolux – which makes appliances ranging from ovens and hobs to dishwashers and tumble dryers – said it would now look to cut costs, with particular attention paid to reducing inefficiencies in its supply chain.
It has also appointed Ricardo Cons, currently head of business area Latin America, to head up North America. The region reported an operating loss in the second quarter, which is forecast to widen in the third, and Cons will institute a turnaround programme intended to return North America to profit. Current incumbent Nolan Pike will take up a new role reporting to chief commercial officer Anna Ohlsson-Leijon, Electrolux said.
Further details of the cost cutting programme will be published with the third-quarter results at the end of October.
Shares in the group were down 1% as at 1230 BST, having fallen as much as 7% earlier.
In the second quarter, Electrolux posted a weaker-than-expected operating profit of 560m Swedish crowns, hit by losses in the US and supply chain constraints.
