Electrolux Q2 Net Gains 27 Percent
STOCKHOLM-In spite of an overall sales decline, Electrolux bolstered its second-quarter bottom line by 27 percent to SEK815 million (about $124.3 million based on the conversion rate of Swedish kroners to U.S. dollars for the period).
Expense controls provided some of the help to the bottom line in the quarter. Selling, general and administrative expenses dropped 5.5 percent in kroners and 10 basis points as a percentage of sales, and gross margin edged up eight basis points to 19.7 percent. Keith McLoughlin, Electrolux's president and CEO, said the corporation enjoyed a "positive impact" from its ongoing program to reduce expenses, particularly in Europe.
Net sales finished the quarter at SEK26.3 billion (about $4 billion), a decrease of 5 percent. In North America, sales were up 3 percent, fueled by what McLoughlin termed a "strong focus" on growing in premium segments such as cooking products and multidoor refrigerators. This was partly offset by lower sales in room air conditions, and by a fire at a facility that supplies Electrolux with components for refrigerators and laundry products.
Global sales of small appliances plummeted 41 percent, the result of reduced sales volumes. In particular, sales of upright vacuum cleaners in the United States were weak, as were market conditions in Latin America. Sales of small domestic appliances increased year over year, with what Electrolux called "good growth" in several regions.
Looking ahead to the fiscal year's second half, McLoughlin said, "We will continue to launch new, innovative products in parallel with optimizing global production with a strong focus on cost efficiency. This will enable us to continue to generate a solid cash flow and shareholder value."