The market for washers and dryers has reached the end of its up cycle. Dow Jones MarketWatch reports that Swedish home-appliance manufacturer Electrolux is undertaking steep cost cuts that will target its supply chain and production following a warning of a sharp drop in demand.
The company is seeing demand for its core appliances in the U.S. and Europe falling at a significantly faster pace than in the second quarter. Electrolux says high inflation is hitting consumers and that the company is holding excess inventory that it stockpiled as a safeguard against supply-chain disruptions.
Big retailers have been reporting similar mismatches between demand and inventories. Electrolux’s warning signals that big suppliers are feeling similar pain.
Electrolux expects its earnings to fall significantly from the second quarter to the third, and its supply chain cuts suggest far fewer shipments will be moving through its shipping channels in the coming months.
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