Whirlpool Corporation Q1 FY2026 earnings call

• North American business had tough quarter in March due to weak consumer sentiment and other drivers. • Took decisive actions to restore North American margins, including largest price increase in over a decade (>10%) and accelerating cost actions. • Macro environment in North America: Consumer sentiment at 50-year low, U.S. appliance industry demand declined 7.4% in Q1 with margin down 10%, industry pricing had volatility. • MDA North America results: Net sales down 8%, break-even performance with margins impacted by demand decline, inventory costs, and promotions. • MDA Latin America results: Excluding currency, net sales down ~4%, EBIT margin 6% with support from Brazil tax ruling and cost takeout. • SDA global results: ~10% net sales growth, EBIT margins expanded to 21%. • Pricing actions: Largest price increase in over a decade with two-step plan, including promotional price increase >10% and lease price increase. • Product innovation: Successful launch of Whirlpool branded UV laundry tower, new KitchenAid Intelligent Wall Oven, and new in-sync curator business product. • Cost takeout initiatives: Committed to $115 million in cost takeout in 2026, accelerating vertical integration, automation, and manufacturing/logistic footprint optimization, renewing strategic sourcing initiatives, and introducing new fixed-cost actions. • Section 232 tariffs: Update 232 framework is a win for U.S. manufacturing, strengthening Whirlpool's position as large domestic appliance producer.

MDA North America: Net sales decreased 8% year over year to 2.2 billion, delivered break-even performance with margins impacted by sharp decline in demand, higher inventory reduction costs, and intense promotional environment. MDA Latin America: Excluding currency, net sales decreased ~4% year-over-year, EBIT margin was 6% supported by favorable Brazil tax ruling and cost takeout initiatives. SDA global: Delivered ~10% net sales growth year-over-year, excluding currency, EBIT margins expanded 250 basis points year-over-year to 21% driven by direct-to-consumer growth, cost takeout initiatives, and marketing investment timing changes.

• Revenue: Expect like-for-like revenue growth of ~1.5% in 2026 due to new product launches in MDA North America, momentum in MDA Latin America, and strength in SDA global. • Ongoing EBIT margin: Expect ~70 basis points of ongoing EBIT margin contraction to ~4% full year. • Free cash flow: Expected to deliver more than $300 million or ~2% of net sales driven by structural inventory optimization. • Earnings per share: Full year ongoing earnings per share expected $3 to $3.50. • Pricing mix: Expect 150 basis points of price mix reflecting current impact of consumer sentiment offset by bold pricing actions. • Net cost takeout: Expect to deliver more than $150 million supported by accelerated cost actions. • Tariff impact: Expect approximately 175 basis points of negative impact from section 232 tariff changes announced in April 2026. • Capital allocation: Continue to invest in organic growth, reduce debt levels by paying down more than $900 million in 2026, and pause quarterly dividend starting in Q2.

• Macro environment risks: Consumer sentiment at 50-year low, war in Iran impacting consumer concerns about cost of living, which pressured industry and discretionary demand. • Industry demand risks: U.S. appliance industry demand declined 7.4% in Q1 with margin down 10%, and anticipated prolonged inflationary environment leading to expected full year industry demand decline of ~5% in North America. • Pricing risks: Intense promotional environment, Supreme Court rulings affecting promotion pricing, and price changes by competition not covering cost of inflation tariffs. • Tariff risks: Changes in section 232 tariffs, which have an impact on competitors and the industry, and potential future or potential changes in trade policy. • Inventory risks: Higher than expected cost to reduce inventory in MDA North America due to unexpected industry decline.

Q: Contrast drivers of greater volatility in appliances vs other products like power tools, flooring, paint, plumbing.

A: Appliance purchase is a significant portion of disposable income, a big ticket item, unlike $50 purchases of other products. Spare parts and repair business was strong in Q1 indicating consumers holding back on replacing products.

Q: Thoughts on second quarter EBIT margins for North America and trajectory for back half.

A: Big price increase with multi-tiered approach, first two weeks of pricing seen as encouraging, but need pricing to stick.

Q: Why call out improving price environment but take down full year price mix guidance.

A: Full year number has three months of negative pricing, need to overcompensate, and success of price stickiness determines EBIT margin recovery.

Q: RMI guide, current market prices for PVC and resin and base metals.

A: RMI guide includes current market prices, steel at cap of long-term agreements, resins have headwinds in Q3 and Q4 due to oil prices.

Q: Production cuts, inventories, and production/shipments for rest of year.

A: Inventories in North America are at healthy levels, will produce less than last year to keep in line with industry demand.

Q: Tariff dynamics, booking of refunds, net tariff impact.

A: Q1 had favorable tariff mitigation actions, full year anticipates tariff costs going up half a point, 232 tariff change brings stability and clarity.

Q: Demand trends in North America MDA since March and April, balance of year.

A: April slightly improved from March, but consumer sentiment still down, mix under pressure, volumes soft to slightly negative.

Q: Promotion strategy, impact on industry down five.

A: Changed promotions to less weeks and less participation, this reflects in industry down five as promotions don't increase market demand in replacement-driven market.

Q: Promotional environment in Latin America and pricing behavior expectations.

A: Promotional environment in Latin America is intense with foreign competitors and imports aggressive, responding with product launches and cost actions to be competitive.