NEW YORK: Whirlpool Corp, the owner of the Maytag and KitchenAid brands, projects 2024 sales will be weaker than Wall Street expectations as consumers forgo appliance upgrades.

       Revenue will be about US$16.9bil this year, the company said on Monday. That’s below analysts’ average projection of US$17.7bil, according to data compiled by Bloomberg. Earnings guidance also trailed estimates.

       The outlook renews concerns that US consumers’ resilience may be fading as some shoppers pull back from big-ticket purchases such as appliances, electronics and furniture.

       Whirlpool said it’s seeing lower demand for appliances in North America, the region that generates more than half of the company’s revenue.

       “We continue to see an environment where the discretionary part of our business is under pressure,” chief financial officer Jim Peters said in an interview.

       “That’s typically when homeowners buy an existing home and they come in and replace the appliances – they make the decision to upgrade.”

       Whirlpool’s results also indicate continued weakness in the US housing market.

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       High borrowing costs have caused sales of previously owned homes to plummet, pushing many buyers to the sidelines as homeowners hold off from listing their properties for sale.

       “Existing home sales – they’re at a multi-decade low,” Peters said.

       “Absent any significant change to mortgage rates, I don’t know that existing home sales are going to change much from where they were in 2023,” he said, adding that they could possibly start to pick up in the second half of 2024.

       Whirlpool is more optimistic about new-home sales, he said. “It’s going to start to slowly pick up this year.”

       Whirlpool’s fourth-quarter earnings and revenue topped analysts’ estimates, helped by market share gains in North America and lower costs.

       Peters said that consumers are still replacing broken appliances, but those shoppers are more price sensitive than others.

       “When consumers are in that duress situation, they tend to be a little bit more price sensitive than someone who is actually making a conscious decision to upgrade an existing appliance,” he said.

       The appliance manufacturer expects to reduce its expenses by as much as US$400mil this year as part of a programme to cut costs.

       A portion of the savings will come from finding lower-cost materials for components such as motors, pumps and compressors, while other savings will come from a reduction in corporate jobs, Peters said.

       “We will have fewer people that will be needed in certain parts of the business, and so we’ll adjust our headcount appropriately,” he said, declining to give details on the timing and number of job losses.

       Production workers won’t be affected, he said.

       Whirlpool, which bought garbage disposal maker InSinkErator in 2022, is planning to trim its debt by another US$500mil this year after reducing debt by that amount in 2023.

       Sweden’s Electrolux AB, which competes with Whirlpool in the appliance market, earlier this month said it will report an operating loss in the fourth quarter due to weakening demand in its North American business. — Bloomberg