Investing.com - Electrolux (ST:ELUXb) offered up a weak first quarter, as the world's second-biggest appliances maker had previously warned of, but Citi noted these results could be seen as a relief after a tough end to 2023.
Electrolux reported on Friday an operating loss of 720 million crowns ($66.2 million), against a 256 million crown loss a year ago, on weak demand and poor performance in North America.
That said, this loss, almost triple the previous year, was still less than the 761 million crown loss expected on average by analysts polled by LSEG.
“Electrolux had already guided to a tough Q1 at the time of Q4 results, and the outcome is not worse than expected,” analysts at Citi said, in a note.
The company has been struggling to compete with lower-price rivals as cash-strapped households turn to cheaper alternatives.
"The price pressure in North America and high promotional activity in other markets characterizing the latter part of 2023 continued in the first quarter." CEO Jonas Samuelson said on Friday.
However, there may be some light at the end of the tunnel, says Citi.
“The market outlooks for North America and Europe remain unchanged, and while price is guided negative into Q2, promotional activity in North America is expected to ease as the year progresses. With self-help measures largely expected to benefit from H2, and so profit for the year firmly second half weighted, these benefits could coincide with the newly-announced timing of the CEO departure at year end, “ said analysts at Citi.
“We expect Q1 results to be seen as a relief after a tough end to 2023.”
Citi maintained a ‘neutral’ rating, with a 12-month price target of 102 crown.
At 08:35 ET (12:35 GMT), Electrolux stock rose 2.8% to 92.20 crown.