Electrolux AB reported an 82% drop in 2Q net profit and cut its full-year forecast, citing “very weak” markets in North America and Europe.
Net profit for the period fell to 99 million kronor (approx. US$16.5 million) from 545 million kronor ($91 million) in the same period a year ago, mainly due to the costly launch of a new premium appliance line in North America. It said the introduction of the new Electrolux brand reduced operating income for the second quarter by about 230 million kronor ($38.4 million).
Electrolux also cut its outlook for the full year, saying it expects an operating profit of between 3.3 billion and 3.9 billion kronor ($551 million-$651 million), excluding items affecting comparability.
“Based on the very weak market developments, we have decided to decrease our forecast for the markets in North America and Europe,” Chief Executive Officer Hans Straberg said in a statement.
However, he added the introduction of the new brand in North America went well.
“Our products are today present in more than 2,000 retail outlets in the U.S., and we expect to reach about 3000 retailers by the end of the year “” many more than we had originally planned,” he said.