swirl Shares fell sharply on Thursday after the iconic consumer electronics maker warned that the Iran war had triggered a deep economic downturn, highlighting how rising fuel prices and collapsing consumer confidence are starting to weigh on big-ticket purchases.
“The war in Iran caused a collapse in consumer confidence in late February and March, leading to recession-level decline in the industry in the United States,” the company said in its earnings report.
The comments marked one of the harshest corporate warnings yet about the economic impact of the conflict and contrasted with the more resilient spending trends that travel and hospitality companies have highlighted in recent days.
Shares of Whirlpool, which makes washers, dryers, dishwashers and other home appliances, fell 12% in morning trading.
CEO Mark Bitzer said Whirlpool moved quickly to cut costs and adjust prices amid worsening macroeconomic conditions.
“In the face of rapidly deteriorating macroeconomic conditions, we acted decisively to address pricing and costs,” Bitzer said in a statement. “Now, with changes to Section 232 that favor domestic manufacturers, Whirlpool Corporation is in a structural position to win with American-made products.”
The company also cut its full-year earnings forecast by about half, lowering its forecast to a range of $3 to $3.50 per share from its previous estimate of about $6 per share. Whirlpool also announced that it would suspend its dividend in order to prioritize debt repayments.
Analysts at JPMorgan said the downward revision to its earnings outlook was due to higher raw material inflation, a growing net tariff impact and weaker price and product mix benefits.
Companies like Uber and Disney have reported little evidence that consumers are cutting back on travel, entertainment and convenience spending, but comments from Maytag’s parent company suggest there may be tensions in big-ticket categories like washers, dryers and kitchen appliances.
According to a University of Michigan survey, consumer confidence hit an all-time low at one point in April due to soaring gasoline prices due to the Iran war. Stock markets have rallied since mid-April on hopes that the United States and Iran could reach a deal to end the fighting. But U.S. oil prices remain above $90 a barrel as traders wait to see if a peace deal is reached.
