Electrolux swings to loss as shoppers shift to cheaper appliances

STOCKHOLM (Reuters) -Shares in Electrolux tracked their worst day since 2011 after Europe's biggest home appliances maker swung to a loss in the second quarter as cash-strapped shoppers opted for cheaper products and demand from residential property builders slowed.

The Swedish group said organic sales fell 8% as sales volumes shrank significantly due to continued weak demand.

"The weak market demand environment, with lower consumer purchasing power resulting in more consumers shifting to lower price points, continued also in the second quarter," CEO Jonas Samuelson said in a statement.

"Lower residential construction and remodeling activity caused significantly weaker demand within the built-in kitchen category, mainly impacting us in Europe," he said.

Electrolux said in a separate statement it had started preparations for a potential divestment of Zanussi and other non-core brands in the coming years.

The group estimated the total potential divestment value for all these assets combined to be about 10 billion crowns.

Johan Eliason from Kepler Cheuvreux said in a note that achieving the price sounded like a good deal, but it appeared to be in line with the price paid for the assets historically.

Electrolux reported a second-quarter operating loss of 124 million crowns ($12.1 million) with JP Morgan pointing out that overall, the group's results came in weaker than expected.

The stock is down 15%, set for its worst day in 12 years.

($1 = 10.2438 Swedish crowns)

(Reporting by Anna Ringstrom and Izabela Niemiec, editing by Louise Breusch Rasmussen, David Evans and Bernadette Baum)