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Whirlpool's KitchenAid Inks Deal (Revised)

Zacks Equity Research

Whirlpool Corporation’s (WHR) KitchenAid brand recently entered into a deal with SodaStream International, Ltd. (SODA) to develop an in-home carbonated system. The KitchenAid branded soda maker will likely hit the market during this year’s holiday shopping season. However, the terms of the agreement were not disclosed.

U.S.-based KitchenAid has now become a leading maker of premium kitchen appliances and culinary tools, which commenced its operation by launching stand mixers in 1919.

Moving over the traditional soft drinks offered by PepsiCo, Inc. (PEP) and The Coca-Cola Company (KO), SodaStream’s carbonation systems let domestic consumers turn normal water into carbonated soft drinks and sparkling water. This leading manufacturer and distributor of home beverage carbonation systems had also signed a deal with Samsung to launch “powered by SodaStream” refrigerators, which will soon be seen in showrooms.

In comparison, Whirlpool is in the incipient stage of its product development. Moreover, the company has been reporting declining year-over-year sales for the past several quarters. Hence, we believe that the aforementioned strategic collaboration will not only help Whirlpool to expand its KitchenAid branded product category but will also boost its top line and induce a competitive edge.

Over the last 101 years, Whirlpool has emerged as the leading manufacturer and supplier of major home appliances. Whirlpool is considered to be the largest home appliances manufacturer in the world, ahead of Electrolux, LG, Samsung and General Electric. Moreover, this Zacks Rank #3 (Hold) company is among the leading home appliances makers in India and Europe.

We consider Whirlpool’s consistent focus on developing new products, its cost-cutting measures, and diversification of business across the world – to eliminate geographical risks arising from concentration in one region – to bode well for future growth.

(We are reissuing this article to correct a mistake. The original article, issued earlier, should no longer be relied upon.)

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