GLMS SEC released a research report stating that looking ahead to the fiscal year, leading consumer appliance companies have mostly lowered their expectations for North America; HVAC (Heating, Ventilation, and Air Conditioning) outlooks have generally been revised upward, with commercial orders continuing to show strong growth and revenue expected to accelerate from Q2. The sector is bottoming out and recovering, maintaining a "Recommended" rating for the overseas home appliance industry. Subsequently, European demand remains weak but stable, North America shows sequential recovery, emerging markets exhibit strong momentum for refrigerators and washing machines, and the cyclical impact of climate-related factors on air conditioners is diminishing. From Q2 onward, the base for export sales is lower, suggesting potential for improvement, and leading brands show strong momentum in overseas expansion, potentially exceeding expectations. The main views of GLMS SEC are as follows:
Overseas Q1: HVAC Performance Surpasses Expectations, Consumer Appliances Show Divergence In Q1 2026, core appliance shipments in the U.S. decreased by 10% year-over-year, pressured short-term by blizzards in January-February and geopolitical inflation expectations; core appliance shipments in Europe were flat year-over-year, maintaining stability. The operational performance of 15 leading overseas companies in the quarter remained divergent. North American residential HVAC showed signs of bottoming out and improvement, exceeding expectations. Major appliances were significantly impacted by weather and weak consumer sentiment, while small appliances showed relative resilience. European consumer appliance performance was generally stable, with heat pump demand recovering and HVAC mostly accelerating.
Looking ahead to the fiscal year, leading consumer appliance companies have mostly lowered their North American expectations; HVAC outlooks have generally been revised upward, with commercial orders continuing to show high growth and revenue expected to accelerate from Q2.
HVAC: Strong Commercial Orders, Residential Sector Bottoming Out and Improving In Q1 2026, data centers continued to drive strong commercial HVAC order activity. Carrier's global data center orders increased over 500% year-over-year; Trane's Americas Applied orders saw over 100% growth for the third consecutive quarter. On the revenue side, the marginal improvement mainly came from the residential business recovery exceeding expectations. Carrier's revenue decline narrowed by 8 percentage points, and Lennox's residential decline narrowed by 11 percentage points. While Lennox's commercial segment accelerated, Carrier's and Trane's Americas commercial revenues slowed.
Looking ahead to the fiscal year, except for Carrier, the other three leading North American HVAC companies have slightly raised their revenue guidance. Trane expects its Americas commercial revenue growth to accelerate from Q2.
Consumer Appliances: North American Demand Under Pressure, Small Appliances Generally Stable In the quarter, major overseas appliance manufacturers generally faced operational pressure. Whirlpool, Electrolux, Arçelik, and Samsung DA's revenues all declined year-over-year, with LG performing better than the industry. The small appliance sector was generally stable, with SEB accelerating in the quarter, and SharkNinja and De'Longhi continuing relatively rapid growth.
By region, consumer appliance performance diverged in the quarter. Europe generally improved, with Electrolux, SEB, and De'Longhi's revenues in related regions continuing single-digit growth, and SharkNinja accelerating. North American major appliances were impacted by extreme weather and weak consumer sentiment due to inflation expectations, with Whirlpool and Electrolux's North American declines widening, while small appliances maintained positive growth.
Operational Outlook: HVAC Mostly Revised Upward, Profit Expectations Cautious Among 11 overseas companies providing updated guidance in the quarter, excluding 2 Japanese companies issuing initial guidance, 4 raised their revenue guidance. Apart from SharkNinja's strong operational alpha, the other 3 were North American HVAC leaders whose residential business improvement exceeded expectations in the quarter. Whirlpool and AOS, more significantly impacted by the North American consumer beta, lowered their annual guidance; Electrolux revised its North American industry outlook to negative; the remaining 3 companies maintained their outlooks.
Furthermore, company outlooks generally mentioned cost/tariff pressures. Whirlpool, Carrier, and Lennox, among others, have further price increase measures. Arçelik and Daikin, among others, are affected by price locks/hedging delays.
Risk Warnings: Significant increase in raw material costs, geopolitical and tariff uncertainties, significant exchange rate fluctuations.