Electrolux reports Q3 core profit beat, but North America weakness persists (updated)

Electrolux AB

Today 06:24

Q3 core profit tops estimates, driven by cost savings
North American consumers seek cheaper products
Shares spike 12% before settling to trade 3% higher
Adds context in paragraph 2, shares in paragraph 4, analyst comment in paragraph 5 and European demand in paragraph 6
GDANSK, Oct 23 (Reuters) - Swedish home appliance maker Electrolux ELUXb.ST beat market expectations for third-quarter core profit on Friday helped by further cost savings, though it flagged lower market demand in key region North America.
Electrolux, under pressure amid cautious consumer behaviour, cut-price competition and rising raw material expenses, has been restructuring its business and cutting costs. The efforts started to bear fruit as it reported a surprise rise in its core profit in the second quarter.
The company's adjusted operating income rose 2% to 912 million Swedish crowns ($92 million) in the third quarter, against 867 million expected by analysts in a company-compiled poll, with organic sales growing 3.5%.
Its shares jumped as much as 12% shortly after the market opened, but steadied to trade around 2% higher by 0802 GMT, helping to reduce year-to-date losses to some 25%.
"Cost efficiency saves the day (again)," JPMorgan analysts wrote in a note, adding that free cash flow was strong as well.
     
CONSUMERS CAUTIOUS IN EUROPE, NORTH AMERICA
Consumer sentiment in Europe remained weak, with Western European market declining 1%, Electrolux said.
Inflation worries continued to dent consumer confidence in North America, a region that accounted for 35% of the company's sales in the quarter, it added.
"Competitive pressure remained high, alongside significant cost headwinds from external factors, including raw material, logistic costs and U.S. tariffs," President and CEO Yannick Fierling said in a statement.
Fierling said North American customers had shifted toward lower price points, prioritizing affordability. Sales in the region were up 2%, but that was mainly driven by price increases, Electrolux said.
It now expects prices and volumes to have a neutral impact on its result in 2026, having previously expected a positive contribution.
($1 = 9.9195 Swedish crowns)

 (Reporting by Boleslaw Lasocki in Gdansk, editing by Anna Pruchnicka)
 ((boleslaw.lasocki@thomsonreuters.com))