Welbilt has given the first measurable insight to just how devastating Covid-19 has been for the foodservice equipment sector by reporting a 52% sales reduction in what its CEO called “the worst quarter in the history of our industry”.
The company said it plans to boost its efforts in areas such as ghost kitchens and enhanced sanitation as it seeks to bounce back from the slump that occurred as most of the major markets it serves were shut down at the end of March.
Sales at the US-based firm declined from $426m (£320m) to $206m (£155m) during the three months to 30 June, leading it to suffer a $17.4m (£13.1m) loss versus a profit of $20m (£15m) the year before.
Welbilt said the decline reflected the closure of the hospitality industry across the world, stalling demand for commercial foodservice equipment.
April appears to be when the market hit rock bottom, with sales declining 60% year-on-year, before improving sequentially in May and June as restaurants and other professional kitchen operators were allowed to gradually reopen.
June net sales decreased 40% from the prior year, the company said.
President and CEO, Bill Johnson, commented: “We are pleased with our margin and cash flow performance during the worst quarter in the history of our industry due to the impact from the Covid-19 pandemic. We remained very focused on protecting the health and safety of our employees while implementing aggressive cost reduction actions in late March. These actions helped us deliver positive margins and cash flow, and keep liquidity consistent with the prior quarter.”
Welbilt said the rapid drop in demand associated with the pandemic caused “unfavourability” in both material cost and manufacturing costs, but cost reduction initiatives including redundancies and furloughing led to savings.
The company told investors that it expects third quarter sales to decrease between 30% and 35% year-on-year.