Maytag May Not Meet First Quarter Expectations,
Mar 11, 2003
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Maytag Corporation announced that it anticipates first quarter sales and earnings will not meet expectations. The company reported that the decline in performance began in February when operating earnings were about 25-percent below plan. While no specifi c guidance is being provided for the quarter at this time, the major earnings impact is that Hoover floor care products have experienced weak volumes and deteriorating sales mix shift to lower priced models at several key accounts. In addition, all retail is facing a generally challenging situation with depressed consumer confidence levels, extreme weather impacting sales opportunities and retailers' cautions affecting buying patterns and promotion programs.

"The consumer was resilient and continued to buy premium products throughout 2002," said Ralph F. Hake, chairman and CEO. "Beginning in February 2003, we saw a behavior change as retail anxiety heightened, especially with discretionary purchases such as upright vacuum cleaners. The magnitude of the impact on our business and how long weak conditions will last remain to be seen."

Mr. Hake noted, "Additionally, core five major appliance industry shipments are down about 4 percent through the first eight weeks, and it would take a very strong surge f or shipments to grow during the first quarter." Maytag originally expected the industry to be flat or up slightly. Mr. Hake emphasized that Maytag will take the necessary actions to contain inventories and reduce costs. However, the company will continue to support its aggressive product launch plans in nearly all existing categories as well as in new areas such as small appliances and service initiatives. In addition, Maytag's previously announced plans to reduce debt and voluntarily fund its pension plan remain unchanged.

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