Whirlpool hiked prices by up to 12% to offset higher costs
Whirlpool Corp. warned on Thursday that cost inflation will negatively impact its business by about $1 billion.
The Benton Harbor, Michigan-based home appliance manufacturer said raw material inflation, particularly in steel and resins, had an unfavorable impact of 400 basis points on margins in the three months through June.
Inflation headwinds will persist in the back half of the year with "peak increases" materializing in the current quarter, CEO Marc Bitzer said during the company’s second-quarter earnings call.
Whirlpool earlier this year raised prices by as much as 12%, which has allowed the company to offset the higher costs.
Whirlpool on Wednesday evening reported earnings and revenue that exceeded Wall Street estimates. Sales jumped 32% from a year ago, boosted by sustained consumer demand and price increases.
The company raised its full-year profit and sales growth forecasts.
Whirlpool is not alone in announcing price increases in an attempt to offset higher costs.
Harley-Davidson earlier this month raised prices by 2% on some models in an attempt to offset its inflationary pressures.
Meanwhile, cereal maker General Mills raised prices for its foodservice business, which is expected to help the company navigate the 7% cost inflation it anticipates this year.
While most of Corporate America has agreed with Federal Reserve Chairman Jerome Powell’s assessment that the pricing pressures will be temporary, Whirlpool’s Bitzer warned that they may persist for some time.
"If current trends persist, there will be a carryover of inflation to next year," he said. "At the appropriate point, we will quantify how much of a carryover will be there."
Whirlpool shares were up 20% this year through Wednesday compared with the S&P 500’s 16% gain.
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