By Scott Kanowsky
Investing.com -- Shares in Electrolux AB (ST: ELUXb ) dipped in early European trading on Monday after the Swedish home-appliance maker warned that income will slide in the third quarter.
The company cited an "accelerated" slowdown in market demand for core appliances in Europe and the U.S. so far in the three-month period, driven by the impact of high inflation on consumer durables purchases and low customer confidence.
"[T]he third quarter earnings for the Group are expected to decline significantly compared to the second quarter 2022 also excluding the one-time cost to exit the Russia market," Electrolux said in a statement on Monday.
The firm's North American business in particular is seen to fall to an operating loss, exceeding a fall in the prior three-month period. That weakness previously caused the wider group to post a lower-than-expected operating profit of 560 million Swedish crowns in the second quarter .
Ricardo Cons, who was credited with leading a transformation of Electrolux's Latin American division over the last six years, was also tapped to helm a turnaround effort in North America.
Meanwhile, the company said it would pursue a group-wide cost reduction program primarily at both its North American and European operations, where market demand is expected to remain depressed for the remainder of 2023. Electrolux highlighted a need to eliminate production "inefficiencies."
"The measures include increasing productivity in operations as well as optimizing the R&D portfolio, administration, sales and marketing activities," Electrolux said.
More information on its cost reduction targets will be unveiled in the group's third quarter interim report published on October 28.
Elsewhere, Electrolux said it does not intend to roll out extra share buybacks before its 2023 annual general meeting.
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