Whirlpool is seeing a demand for appliances that is expected to last several years, the company’s CEO said this week.
The home appliances company – which released its first quarter earnings on Wednesday – reached $5.4 billion in net sales and earned $7.20 in adjusted earnings per share.
During an earnings call on Thursday, Whirlpool Chairman and CEO Marc Bitzer, said the company started seeing an increased demand for appliances last year, during the coronavirus pandemic.
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“We saw a lot of, call it COVID emergency products, OK, the microwave, the small fridge or replacement products because the washer broke down,” Bitzer said. “That mix has gradually shifted and continues to shift towards a richer mix, i.e., people are investing in the home. There’s disposable income and people are upgrading or investing.”
Bitzer went on to say that because people are home more and are using their appliances more often, it’s likely that demand for appliances will continue to rise in the coming years.
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“I think we need to think more in terms of appliance from consumer perspective, how much use, how much mileage, how many cycles you get out of an appliance,” he said. “And what last year showed with people spending so much time at home, the consumption was higher, literally the consumption.”
“So, what happened last year and what happens this year is people spending so much time at home, the appliance consumption is higher,” he added. “So, it’s not pull forward, it’s an accelerated use which drives a lot of demand and which we expect also to continue for quite some time.”
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Even as the coronavirus gets under control and the vaccine is distributed, Bitzer said people are expected to continue to stay home — and therefore, will continue investing in their homes.
“What we’re seeing right now is the demand is a sustained and multiyear demand trend,” Bitzer said. “It’s not a blip. It’s a strong up-cycle.”
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“People also going forward will spend more days at home,” Bitzer added later. “Just think about all these flexible work policies. People will spend more time at home, which ultimately drives higher investments in the home and accelerated use of appliances in the home. Couple that with the housing market in U.S., which I think some people refer to golden age of housing. Housing demand will not slow down in the next couple of years; if at all, it will increase. So put that together, you will have multiyear strong consumer demand in U.S.”