STOCKHOLM (Reuters) -Electrolux said on Friday it expects consumer sentiment to stay weak in early 2024 after which it sees demand in major markets stabilising through the year, as it reported quarterly losses in line with a preliminary reading.
The Swedish group on Jan. 12 warned its fourth-quarter loss had widened to around 3.2 billion Swedish crowns from a year-earlier 2.0 billion due to high costs, intensified price competition and weak demand in North America.
The world’s second-biggest appliances maker expects demand for core appliances in 2024 to be relatively neutral for all regions compared to 2023.
“Looking into the beginning of 2024, weak consumer sentiment is anticipated to continue with consumers shifting to lower price points and postponing purchases in discretionary categories,” CEO Jonas Samuelsson said.
Shares in the company rose 4% at the market open before reversing course, standing down 1% at 0808 GMT.
“However, as inflationary pressure is subsiding and interest rates are expected to come down, we expect demand in major markets to stabilise in the course of the year.”
Electrolux has struggled to compete with lower-end rivals such as China’s Midea, alongside market leader Whirlpool.
Producers are also struggling amid a weak consumer market, with Whirlpool on Monday forecasting full-year sales and profit below analysts’ estimates.
Electrolux, which prices its products in many regions at the premium end of the market, warned “Organic earnings contribution from volume, price and mix combined for the Group is expected to be negative in 2024 full-year”.
“Price levels established at the end of 2023 in the market are assessed to remain in 2024,” it said.
It added this is likely to be partly offset by growth in premium products within its kitchen and laundry ranges.
Electrolux, which is known for brands such as AEG and Frigidaire, proposed no dividend for the second year in a row, as expected.
The company reported an operating loss of 3.22 billion Swedish crowns ($310.33 million) against a year-earlier loss of 1.96 billion and a preliminary reading of 3.2 billion.
Excluding non-recurring items, it posted an operating loss of 724 million versus a loss of 612 million a year ago.
(Reporting by Marie Mannes; editing by Anna Ringstrom)
