Appliance giant Whirlpool says the Iran war has caused 'recession-level industry decline'
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- Appliance maker Whirlpool says the Iran war has led to "recession-level industry decline."
- The company cut its guidance for the full year when it reported earnings on Wednesday.
- Whirlpool's CFO said that demand is the lowest since the Great Financial Crisis.
Appliance maker Whirlpool says it's seeing firsthand the damage the Iran war has done to the economy.
In its latest earnings report on Wednesday, the company cut its guidance for earnings per share to a range of $3 to $3.50 from the prior outlook of about $6. The stock cratered as much as 18% before paring the loss.
Zooming out, Whirlpool said the Iran war has done major damage to the industry amid a historic drop in US consumer confidence.
"[The] War in Iran resulted in recession-level industry decline in the U.S. as consumer confidence collapsed in late February and March," the report stated.
News that the Iran war may be close to an end boosted markets on Wednesday, but Whirlpool's statements highlight the wide-ranging economic impacts of the war, which has disrupted global supply chains.
That doesn't just mean higher prices for items made by Whirlpool, who owns brands such as Maytag and KitchenAid. Rising costs of both gasoline and jet fuel are making it more costly to ship items, particularly large appliances such as dishwashers and stoves.
Price increases from firms like Whirlpool are in line with predictions from finance pros who noted that the Iran war would likely spark a second wave of household inflation.
The home appliance industry is often seen as a bellwether for the broader economy, as sales offer insight into how willing consumers are to make big-ticket purchases.
Whirlpool's warning follows a historic drop in consumer sentiment. The University of Michigan's consumer-sentiment index fell to 49.8% in April as the Iran war dragged on. That figure is the lowest on record for the month and the worst it has been since June 2022, when shoppers were contending with surging inflation.
Whirlpool CFO Roxanne Warner told Yahoo Finance that the Iran war wasn't the only factor that impacted the company recently, also noting March's severe winter weather. But she highlighted that demand for large home appliances throughout the US and Canada is reaching lows that call to mind recession-levels.
"These are levels that last time you've seen was in the Great Financial Crisis," she said.
