Floor-care giant Hoover Co. (North Canton, OH, U.S.) is still struggling to meet the needs of budget-conscious shoppers, who make up a growing share of its market, according to parent company Maytag Corp. (Newton, IA, U.S.).
The sweeper company had a weak first quarter with slower sales, according to Maytag Corp.
Maytag didn't break out Hoover sales. But Maytag's housewares segment, which includes Hoover, had first quarter sales of U.S. $178.8 million, a 16.4 percent drop from $214 million from the first quarter of 2003.
"Hoover is the number one concern (of Maytag),'' said Laura Champine, an analyst at Memphis, TN, U.S.-based Morgan Keegan, who rates the shares "market perform.'' "Not only do they have substantial low-price competition, now they are having trouble staying competitive in their high-price products.''
While floor-care industry sales overall increased in the first quarter, most of the growth was at low price points, where Hoover is underrepresented, said Ralph Hake, Maytag's CEO.
Hoover, which dominated the floor-care industry for years, has traditionally sold top-end vacuum cleaners. It has struggled to make cheaper models after a sudden market shift to lower products, which took the company by surprise last year.
Even so, Maytag Corp., the third-biggest U.S. maker of household appliances, said first-quarter profit rose 12 percent as tax and retiree-drug expenses declined.
Net income increased to $38.7 million, or $0.49 a share, from $34.5 million, or $0.44, a year earlier, Maytag said in a statement. Sales gained 7.3 percent to $1.22 billion.
Maytag also sells washing machines, dryers, refrigerators, stoves, and other appliances. (Akron Beacon Journal)
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