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(Sharecast News) - Electrolux shares tumbled on Friday after the Swedish appliance maker said it swung to a loss in the first quarter as sales in North America slumped, and announced a new US partnership and an SEK9bn rights issue.
The company said it swung to an operating loss of SEK266m from a profit of SEK452m in the same period a year earlier. Analysts were expecting a profit of SEK540m.
Net sales fell 7.9% on the same period a year earlier to SEK29.5bn, with sales in North America down nearly 12% on an organic basis. Electrolux cited increased costs for US tariffs and a significant slowdown in market demand.
Following the downturn in the US home appliances market in the first quarter, Electrolux revised its market outlook for North America in 2026 to 'negative' from 'neutral to negative'.
President and chief executive Yannick Fierling said: "In the first quarter, we saw notable improvement in two regions while North America was marked by a significant market decline.
"We have announced strategic initiatives that will fundamentally strengthen Electrolux Group. These initiatives create a strong platform, enabling accelerated growth, significantly reduced cost and increased efficiency in a fast-changing home appliance industry."
Late on Thursday, the company announced a long-term strategic partnership with Midea Group in North America to establish a "highly complementary" partnership in refrigeration manufacturing and laundry manufacturing.
Electrolux said the partnership is designed to support long-term profitable growth and will contribute to its "overarching efforts to transform the business in North America".
The company also announced an SEK9bn rights issue to finance and accelerate profitable growth initiatives and "expedite the achievement of its financial targets", as well as strengthen the balance sheet.
Electrolux said SEK1bn to SEK1.5bn of the proceeds will be used to support the strategic partnership with Midea, while SEK2bn to SEK2.5bn will be used to support its plans to improve efficiency across the organisation over the next two years.
"This includes targeted optimisation of the global manufacturing footprint to improve capacity utilisation and drive cost efficiencies in addition to staff reductions globally, across functions, in line with Electrolux Group's strategy to strengthen competitiveness and financial resilience," it said.
The initiative is expected to generate gradual cost efficiency improvements, reaching about SEK1.4bn in year three. It is also expected to result in the loss of around 3,000 jobs globally over the same period.
At 0940 BST, the shares were down 24% at SEK46.07.