WHR

• Overall Q2 Performance: Delivered results in line with management expectations, despite persistent macroeconomic challenges across the industry and broader economy. Reported net sales of $3.5 billion, with a sequential 50 basis point improvement in ongoing EBIT margin to 1.8%. Ongoing earnings per share was negative 21 cents. Free cash flow was a negative $1.1 billion, driven by lower earnings and seasonal working capital changes.
• Product Innovation and New Launches: Accelerated new product launch cadence beyond historical levels. 30% of North America MDA portfolio was refreshed in 2025, 3x the typical annual refresh rate and the largest update in 10 years. On track to launch over 100 new products in 2026, which have received positive reception from trade customers and consumers. Recent launches have driven strong market share gains: Maytag double washer gained ~1 point of laundry share, new KitchenAid suite delivered 20% year-over-year brand share growth, Whirlpool UV laundry tower captured ~10 points of share in its category, and SDA innovations have delivered 1-10 points of incremental share across key product categories.
• Pricing Execution: Successfully implemented previously announced promotional price increases in North America (over 10% higher sequentially vs Q1, effective late April 2026), with initial benefits already contributing to sequential margin improvement. Additional 4% list price increase effective July 2026, with builder price increases also kicking in Q3. Announced a 5% overall price increase for Latin America, fully effective August 2026, to restore margins in the competitive region.
• Structural Cost Reduction and Footprint Optimization: On track to deliver $150 million in total structural cost takeout for 2026, with $60 million from automation, $15 million from strategic sourcing, and $20 million from corporate center fixed cost actions. Announced footprint optimization changes at manufacturing facilities in Amana (Iowa), Rio Claro (Brazil), and Ramos (Mexico), with cost savings starting Q4 2026. Reduced the number of local distribution centers by 25% (from 126 to 94), unlocking $60 million in annualized EBIT benefits while maintaining 97% of customers within 100 miles of a distribution center to preserve delivery reliability. Invested in the new Perrysburg, Ohio manufacturing facility to advance vertical integration, automation, and supply chain modernization.
• Balance Sheet Strengthening: Completed multiple strategic actions to improve liquidity and remove near-term refinancing risk: executed a $1.1 billion equity offering, suspended the common dividend to preserve cash, finalized a $2 billion asset-based lending facility, issued $2 billion in secured bonds to cover all 2026 and 2027 debt maturities, and completed the sale of its minority stake in Beko Europe BV for ~$128 million, generating $84 million in net cash consideration. Secured over $3 billion in total liquidity, cleared the debt maturity ladder through 2028, and ended Q2 with net debt largely flat at $5.8 billion, with a target of net debt below $5 billion by the end of 2026.

• Full-year 2026 operational outlook is reaffirmed, with only EPS guidance adjusted to reflect updated interest expense from recent refinancing.
• Expected full-year 2026 revenue growth of approximately 1.5%.
• Expected full-year ongoing EBIT margin of approximately 4%, driven by new product launch momentum, pricing actions, and structural cost takeout. Management expects continued sequential margin expansion through the second half of 2026, with a significant step-up in margin expected in Q3 2026, following the 240 basis point sequential improvement seen between Q1 and Q2 2026.
• Full-year interest expense guidance is revised upward from $300 million to $350 million due to recent debt refinancing.
• Full-year capital expenditures are expected to be approximately $400 million, focused on product innovation, digital transformation, and cost efficiency projects.
• Full-year 2026 free cash flow is expected to be over $300 million. Management expects full-year North American market share to be flat to slightly up year-over-year.
• SDA Global is expected to deliver double-digit revenue growth in 2026 with accretive margins, in line with prior guidance.

1. MDA North America: Net sales of $2.4 billion, up 8% sequentially quarter-over-quarter. EBIT margin improved 240 basis points sequentially. This segment contributed approximately 68.6% of the company's total Q2 2026 net sales. Performance was driven by successful execution of promotional price increases and structural cost takeout, partially offset by higher raw material, fuel and tariff costs.
2. MDA Latin America: Excluding currency impacts, net sales decreased 2% year-over-year due to negative price mix in Brazil's highly promotional competitive environment, partially offset by higher volume. Achieved an EBIT margin of 3%, which included a $14 million net gain from a Brazilian tax case. This segment contributed approximately 10-12% of total net sales.
3. SDA Global: Delivered solid in-line results with an EBIT margin of approximately 12% in Q2 2026. Underlying demand was positive, with double-digit sell-through growth and market share gains globally. This segment contributed approximately 19-21% of total net sales.

• Persistent macroeconomic challenges, including soft consumer demand and a weak U.S. housing market, continue to pressure top-line performance.
• Elevated raw material costs (specifically steel, base metals, and resin driven by oil price changes) create margin headwinds, offsetting structural cost takeout benefits.
• Section 232 tariff implementation created a 200 basis point unfavorable net impact on Q2 2026 margins, after AIIPA credit benefits were realized in Q1 2026. Competitors face higher relative tariff costs than Whirlpool, creating ongoing pressure on industry pricing dynamics.
• Footprint consolidation and manufacturing reorganization requires 6-12 months lead time to fully capture cost benefits, meaning most savings will not be realized until 2027.
• High promotional intensity in Latin America has pressured margins in the region, though new pricing actions are expected to reverse this trend.
• Uncertainty around consumer demand elasticity following material price increases could impact volume and market share.

Q: What gives management confidence in the 4% July list price increase, and what is the outlook for industry promotional pricing discipline through year-end?

A: Management reports that the Q2 promotional price increase executed in late April performed very well, with only two-thirds of the full impact captured in Q2, leaving full carryover benefits for the second half. The 4% list price increase is executing as planned with no major issues to date, and builder price increases are also kicking in Q3, giving management confidence in overall pricing traction.

Q: What is the expected cadence of margin expansion in the back half of 2026, after the 240 basis point sequential improvement in North America between Q1 and Q2?

A: Management expects another significant step-up in margin in Q3 2026, driven by the full impact of Q2 pricing, the new July list price increase, and builder price increases. Margin improvement is not entirely back-end loaded to Q4, and the sequential improvement trend seen between Q1 and Q2 is expected to continue through the third quarter.

Q: How is innovation investment balanced against other capital allocation needs, given the strong recent performance of new product launches?

A: Management has not cut product innovation capital expenditures despite broader macro challenges, and has no plans to do so. New product launches have delivered strong market share gains that offset pricing headwinds, so the company will continue to maintain its robust innovation pipeline. Innovation investments are focused on consumer-valued products that drive top-line growth and margin expansion, paired with automation and vertical integration investments that reduce long-term costs.

Q: What is driving the market share performance expected for the back half of 2026?

A: Year-to-date North American market share is flat, which management views as a strong result amid significant price increases. New product launches will support share performance in the back half. Management is focused on structurally healthy organic share, and is willing to give up small amounts of share rather than participate in unprofitable aggressive promotions, leading to an expected full-year share outcome of flat to slightly up year-over-year.