The remaining portion of sales goes to newly constructed homes and discretionary customers. Any extension or permanent work-from-home environment could be a boon to Whirlpool's replacement cycle. Some 55% of Whirlpool's sales are replacement sales. That ultimately drives significantly higher replacement rates going forward." On the company's fourth-quarter earnings call in January, CEO Marc Bitzer said, "We saw the oven usage and connected appliance increase compared to pre-COVID by more than 150%, and washers is about 50% up. Whirlpool believes there is a strong replacement cycle over the next few years. On top of that, work-from-home trends have led to an increased usage of appliances. If the company can hit its guidance for 2022, the stock could be a bargain. Whirlpool's stock is trading around its lowest forward price-to-earnings (P/E) ratio in the past 10 years, other than the pandemic sell-off in 2020. To offset higher costs, Whirlpool will increase prices and introduce new products to the market. But the company's guidance assumes inflation will persist. Whirlpool's stock is down 27% this year as of Thursday's close, likely due tin part o inflation fears. In addition, it guided to 5% to 6% organic revenue growth for the year. The company said that it expects full-year earnings per share (EPS) of $27 to $29.
Management said that even though household appliance sales have gotten a boost during the pandemic, greater use of those appliances while employees worked from home would create a strong replacement cycle over the next few years. When Whirlpool ( WHR 0.57%) announced guidance for the new year back in January, it spelled out a compelling argument for investors.
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