The company reported an estimated group operating loss of 2 billion crowns ($191 million) for the quarter, compared to a profit of 900 million the previous year. Organic sales fell 8% during the quarter.
Weak North America Demand Contributes to Electrolux's Q4 loss
The weak performance, particularly in North America, led to the loss. The company stated in a press release that the decline in earnings was primarily due to weaker consumer demand and inventory reductions at both retailers and Electrolux, in combination with an elevated cost level. The largest impact was in North America, where the unit, restructuring to improve production and performance, reported losses of 1.2 billion crowns, excluding non-recurring items.
Electrolux Shares Fall After Q4 Profit Warning
Analysts at JPMorgan commented that the profit warning highlighted weak fundamentals, with a demand outlook unlikely to improve in 2023. They also noted that in 2023, savings from raw materials cost normalization might be passed on to consumers to stimulate demand. Electrolux's shares were down 4% at 1449 GMT, still up around 8% for the year. Last week, analysts at BofA raised their rating on Electrolux due to expectations that the North American unit will improve in 2023 with factory ramp-ups, new product launches, and easing costs.