Whirlpool (WHR) 4th Annual Evercore ISI Consumer and Retail Conference summary

Consumer spending and sales trends

• Appliance and furniture sales surged during COVID but have since stabilized or declined, with discretionary purchases notably down due to low existing home sales and high mortgage rates.

• Replacement purchases in appliances remain strong, while discretionary and new home-related sales are flat or declining.

• Discretionary retail has been down mid-single digits for 1.5–2 years, with companies performing in line or slightly better than the industry.

• Furniture retailers report declining deliveries for five consecutive quarters, awaiting lower interest rates to spur demand.

• Consumers are generally conservative, prioritizing essential or duress purchases over upgrades.

Consumer behavior, pricing, and promotions

• Trade-down behavior is observed, especially among duress purchasers, while discretionary segments have shrunk.

• Input costs, especially labor and logistics, remain high but have stabilized, leading to a more promotional environment and prices returning to pre-COVID levels.

• Some retailers have increased average sales prices and gross margins, aided by cost control and supply chain improvements.

• Promotional periods are important but less effective at driving incremental demand in the current environment.

• Furniture retailers focus on offering a range of price points and emphasize home design services to boost average ticket size.

Credit, interest rates, and consumer finance

• High mortgage rates are the main factor impacting sales, especially for products tied to home sales.

• Buy now, pay later programs are increasingly popular, with low delinquency rates, while private label credit cards show a slight uptick in delinquencies.

• Furniture retailers have reduced long-term financing offers due to higher rates, with no significant consumer pushback.