Q4 2025 Whirlpool Corp Earnings Call

January 29, 2026

Speaker #1: Good morning and welcome to Whirlpool Corporation's fourth quarter 2025 earnings call. Today's call is being recorded. Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer; Roxanne Warner, our Chief Financial Officer; Juan Carlos Fuente, our Executive President of North America and Global Strategic Sourcing; and Ludovic Bouffis, our Executive President of KitchenAid Small Appliances and Latin America.

Scott Cartwright: Good morning and welcome to Whirlpool Corporation's Q4 2025 earnings call. Today's call is being recorded. Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer; Roxanne Warner, our Chief Financial Officer; Juan Carlos Puente, our Executive President of North America and Global Strategic Sourcing; and Ludovic Beaufils, our Executive President of KitchenAid Small Appliances in Latin America. Our remarks today track with a presentation available on the Investor section of our website at whirlpoolcorp.com. Before we begin, I want to remind you that as we conduct this call, we will be making forward-looking statements to assist you in better understanding Whirlpool Corporation's future expectations. Our actual results could differ materially from the statements due to many factors discussed in our latest 10-K, 10-Q, and other periodic reports.

Speaker #1: Our remarks today track with a presentation available on the investor section of our website at whirlpoolcorp.com. Before we begin, I want to remind you that as we conduct this call, we will be making forward-looking statements to assist you in better understanding Whirlpool Corporation's future expectations.

Speaker #1: Our actual results could differ materially from these statements due to many factors discussed in our latest 10-K, 10-Q, and other periodic reports. We also want to remind you that today's presentation includes non-GAAP measures, outlined in further detail at the beginning of our presentation.

Q4 2025 Whirlpool Corp Earnings Call

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Q4 2025 Whirlpool Corp Earnings Call

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Thursday, January 29th, 2026 at 1:00 PM

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Scott Cartwright: We also want to remind you that today's presentation includes non-GAAP measures outlined in further detail at the beginning of our presentation. We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the Investor Relations section of our website for the reconciliations of non-GAAP items to the most directly comparable GAAP measures. At this time, all participants are in listen-only mode. Following our prepared remarks, the call will be open for analyst questions. As a reminder, we ask that participants ask no more than two questions. With that, I'll turn the call over to Marc.

We also want to remind you that today's presentation includes non-GAAP measures outlined in further detail at the beginning of our presentation. We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the Investor Relations section of our website for the reconciliations of non-GAAP items to the most directly comparable GAAP measures. At this time, all participants are in listen-only mode. Following our prepared remarks, the call will be open for analyst questions. As a reminder, we ask that participants ask no more than two questions. With that, I'll turn the call over to Marc.

Roxanne Warner: Thanks, Marc, and good morning, everyone. I am honored to step into the role of Chief Financial Officer of Whirlpool Corporation. Having spent the last 18 years at Whirlpool, I have a deep appreciation for our operations and a firm commitment to driving long-term shareholder value. Prior to my current role, I served as Executive Vice President, Finance, and Corporate Controller. In 2021, I was the Chief Financial Officer of our European segment, where I led both finance and integrated supply chain operations and supported the organization through our European divestiture. Joining Whirlpool in 2008, I have had the privilege of holding numerous roles across cost management, commercial, and corporate finance, including leading the finance functions of our US laundry and US sales organization in North America. In 2019, I had the honor of leading investor relations, where I connected with both our investors and analysts.

Marc Bitzer: Thanks, Roxanne, and good morning, everybody. It's a privilege to be speaking with you today as I start my new role leading MDA North America and Global Strategic Sourcing. I joined Whirlpool as an intern in 1996, and I have spent the last 30 years in almost all functions and regions of the corporation. While my recent years were spent abroad, I have been in North America before, where I previously led our laundry business unit, the core of our product portfolio, as well as served as General Manager for our business with Home Depot. Having held these roles before, I know that winning in North America requires continuing to strengthen our brand and product portfolio, enhance our customer relationships, as well as our world-class supply chain to fulfill our purpose of improving life at home. I'm very excited to return to the MDA North America business.

Juan Carlos Puente: Thanks, Roxanne, and good morning, everybody. It's a privilege to be speaking with you today as I start my new role leading MDA North America and Global Strategic Sourcing. I joined Whirlpool as an intern in 1996, and I have spent the last 30 years in almost all functions and regions of the corporation. While my recent years were spent abroad, I have been in North America before, where I previously led our laundry business unit, the core of our product portfolio, as well as served as General Manager for our business with Home Depot. Having held these roles before, I know that winning in North America requires continuing to strengthen our brand and product portfolio, enhance our customer relationships, as well as our world-class supply chain to fulfill our purpose of improving life at home. I'm very excited to return to the MDA North America business.

Ludovic Beaufils: Thanks, Juan Carlos, and good morning, everyone. Expanding my role beyond KitchenAid Small Appliances to our MDA Latin America business is an exciting opportunity. It's an opportunity to drive growth for both an iconic global premium brand and now iconic local brands such as Brastemp in one of our most dynamic, high-growth segments. I have spent the better part of my 20-year career with Whirlpool developing our products and brands from inception to industrialization and to commercialization. I went from leading critical categories in EMEA and in the US to driving our product marketing organization in North America. These roles, combined with my more recent position in the global product organization and my current responsibilities with KitchenAid, have given me a unique vantage point on how to drive innovation and cost competitiveness to win in every channel and every market.

Marc Bitzer: This might be surprising, given that our competitors are 2 to 4 times more exposed to tariffs than we are, but the significant amount of inventory preloading ahead of the tariffs and the uncertainty of a tariff framework might explain the delay of industry price moves. The good news is that we observed a meaningful change of industry pricing and promotions after mid-December into the MLK holiday and the upcoming President's Day. Two, housing. As we discussed in prior calls, Existing Home Sales are the most important driver for appliance demand and, in particular, for Discretionary Demand, which inherently is more margin attractive. However, the Mortgage Lock-in Effect, coupled with lower consumer confidence, has led to a 30-year low of Existing Home Sales. While there is no doubt about an eventual multi-year housing recovery, 2025 did not yet unlock the housing sector.

This might be surprising, given that our competitors are 2 to 4 times more exposed to tariffs than we are, but the significant amount of inventory preloading ahead of the tariffs and the uncertainty of a tariff framework might explain the delay of industry price moves. The good news is that we observed a meaningful change of industry pricing and promotions after mid-December into the MLK holiday and the upcoming President's Day. Two, housing. As we discussed in prior calls, Existing Home Sales are the most important driver for appliance demand and, in particular, for Discretionary Demand, which inherently is more margin attractive. However, the Mortgage Lock-in Effect, coupled with lower consumer confidence, has led to a 30-year low of Existing Home Sales. While there is no doubt about an eventual multi-year housing recovery, 2025 did not yet unlock the housing sector.

Marc Bitzer: With these macro challenges in mind, we delivered results largely in line with the prior year. Our global organic revenues were essentially flat, and we're pleased with the MDA North America market share gains during the second half of 2025. Our operating margins were slightly below 5%, largely driven by the intense promotion environment in North America during Q3 and, in particular, Q4. We delivered cost takeout actions of $200 million, but with the absence of industry pricing, we were not enough to mitigate the cost of tariffs. Lastly, our Latin America business had yet another strong year, while our KitchenAid SDA business delivered outstanding double-digit growth rates with mid-teen operating margins. With 2025 now in the rear mirror, and despite the extreme macro volatility we experience, we're confident about 2026.

With these macro challenges in mind, we delivered results largely in line with the prior year. Our global organic revenues were essentially flat, and we're pleased with the MDA North America market share gains during the second half of 2025. Our operating margins were slightly below 5%, largely driven by the intense promotion environment in North America during Q3 and, in particular, Q4. We delivered cost takeout actions of $200 million, but with the absence of industry pricing, we were not enough to mitigate the cost of tariffs. Lastly, our Latin America business had yet another strong year, while our KitchenAid SDA business delivered outstanding double-digit growth rates with mid-teen operating margins. With 2025 now in the rear mirror, and despite the extreme macro volatility we experience, we're confident about 2026.

Marc Bitzer: First of all, we believe we will be able to sustain the strong trajectory of our KitchenAid SDA and our Latin America business. For North America, there are a number of catalysts to drive margin improvements. First, we already identified more than $150 million of cost actions primarily focused in North America. This will allow us to largely offset the remainder of the tariff headwinds. Second, we launched a record number of new products last year. These new product launches have been hugely successful with expanded floor space and incremental share gains. Third, the industry's promotion intensity has clearly normalized over the past six weeks. We have already announced and implemented promotion pricing changes as well. Lastly, while the new housing starts will likely still be slow, we do see a potential faster improvement of existing home sales on the back of lower mortgage rates.

First of all, we believe we will be able to sustain the strong trajectory of our KitchenAid SDA and our Latin America business. For North America, there are a number of catalysts to drive margin improvements. First, we already identified more than $150 million of cost actions primarily focused in North America. This will allow us to largely offset the remainder of the tariff headwinds. Second, we launched a record number of new products last year. These new product launches have been hugely successful with expanded floor space and incremental share gains. Third, the industry's promotion intensity has clearly normalized over the past six weeks. We have already announced and implemented promotion pricing changes as well. Lastly, while the new housing starts will likely still be slow, we do see a potential faster improvement of existing home sales on the back of lower mortgage rates.

Roxanne Warner: Thanks, Marc. Turning to slide 6, I'll provide an overview of our full year results. As Marc mentioned, our global organic revenue was flat the prior year, and we delivered significant cost takeout to help mitigate the incremental cost of tariffs. We did not see the industry pricing adjustments to offset these incremental tariff costs in 2025, and the prolonged intense promotional environment unfavorably impacted our margins. Ultimately, we delivered a full year ongoing EBIT margin of 4.7% and a full year ongoing earnings per share of $6.23. Given the challenging operational environment in 2025, these results are proof of our resilience and commitment to focus on what we control. We generated $78 million of free cash flow, which was unfavorably impacted by the timing of tariff payments and higher inventory necessary to support our new products.

Roxanne Warner: In November, we executed the previously announced India share sale transaction, which resulted in a reduction of our majority stake from 51% to a minority stake of 40%. The proceeds were utilized to pay down debt in line with our capital allocation priorities. We are pleased with the result of this transaction and our retained position. We will continue to evaluate all options to further reduce our debt throughout 2026 in line with our guidance and capital allocation priorities. We continue to fund the healthy dividend, returning approximately $300 million to shareholders in 2025. Turning to slide seven, I will provide an overview of our fourth quarter and full year results for our business segments, starting with MDA North America. On a full year basis, net sales excluding currency was largely flat year-over-year.

In November, we executed the previously announced India share sale transaction, which resulted in a reduction of our majority stake from 51% to a minority stake of 40%. The proceeds were utilized to pay down debt in line with our capital allocation priorities. We are pleased with the result of this transaction and our retained position. We will continue to evaluate all options to further reduce our debt throughout 2026 in line with our guidance and capital allocation priorities. We continue to fund the healthy dividend, returning approximately $300 million to shareholders in 2025. Turning to slide seven, I will provide an overview of our fourth quarter and full year results for our business segments, starting with MDA North America. On a full year basis, net sales excluding currency was largely flat year-over-year.

Roxanne Warner: We saw continued strong share gains throughout Q4, driven by the momentum of our new product launches. Promotional activity remained intense as industry pricing did not reflect the cost of tariffs, which impacted margins. As a result, the segment delivered an EBIT margin of 2.8% in Q4 and a full-year EBIT margin of approximately 5%. Looking ahead, given the industry's pricing changes over the last 6 weeks, we expect a less promotional environment. In December, we saw a shortening of the post-Black Friday promotional period, and in January, we saw a decrease in the depth of the promotional pricing for the MLK holiday. Based on these data points, we expect a less promotional environment during President's Day. We have already announced and implemented promotional pricing changes that went into effect in early January.

We saw continued strong share gains throughout Q4, driven by the momentum of our new product launches. Promotional activity remained intense as industry pricing did not reflect the cost of tariffs, which impacted margins. As a result, the segment delivered an EBIT margin of 2.8% in Q4 and a full-year EBIT margin of approximately 5%. Looking ahead, given the industry's pricing changes over the last 6 weeks, we expect a less promotional environment. In December, we saw a shortening of the post-Black Friday promotional period, and in January, we saw a decrease in the depth of the promotional pricing for the MLK holiday. Based on these data points, we expect a less promotional environment during President's Day. We have already announced and implemented promotional pricing changes that went into effect in early January.

Roxanne Warner: We expect these actions to put MDA North America back on track for margin expansion in 2026, which we will discuss in detail shortly. Moving to our MDA Latin America business, on a full year basis, net sales excluding currency declined approximately 2% year-over-year due to volume decline. In Q4, we continue to see economic instability in Argentina and an aggressive promotional environment in Brazil, which negatively impacted revenue and margins. These unfavorable results were offset by a favorable operational tax benefit related to the default legal ruling. As a result, the segment delivered a full year EBIT margin of 6.2%. Next, I will review the results for our MDA Asia business. On a full year basis, excluding the impacts of the India transaction and currency, net sales increased approximately 1% year-over-year.

We expect these actions to put MDA North America back on track for margin expansion in 2026, which we will discuss in detail shortly. Moving to our MDA Latin America business, on a full year basis, net sales excluding currency declined approximately 2% year-over-year due to volume decline. In Q4, we continue to see economic instability in Argentina and an aggressive promotional environment in Brazil, which negatively impacted revenue and margins. These unfavorable results were offset by a favorable operational tax benefit related to the default legal ruling. As a result, the segment delivered a full year EBIT margin of 6.2%. Next, I will review the results for our MDA Asia business. On a full year basis, excluding the impacts of the India transaction and currency, net sales increased approximately 1% year-over-year.

Roxanne Warner: The segment delivered a full year EBIT margin of approximately 5%, with 120 basis points of expansion year-over-year. The India transaction resulted in margin accretion of approximately 40 basis points, while the remaining benefit was driven by a favorable cost takeout. As a result of the deconsolidation of India, we will not report Asia as a standalone segment moving forward. Turning to our SDA Global business, SDA Global continues to perform very well, achieving impressive net sales growth of approximately 10% year-over-year in the fourth quarter and approximately 9% on a full year basis, driven by new product launches and strong direct-to-consumer business. Fourth quarter EBIT margins expanded 130 basis points year-over-year as a result of favorable price mix. For the full year, the segment delivered a strong EBIT margin of 16%, with 170 basis points of margin expansion year-over-year.

The segment delivered a full year EBIT margin of approximately 5%, with 120 basis points of expansion year-over-year. The India transaction resulted in margin accretion of approximately 40 basis points, while the remaining benefit was driven by a favorable cost takeout. As a result of the deconsolidation of India, we will not report Asia as a standalone segment moving forward. Turning to our SDA Global business, SDA Global continues to perform very well, achieving impressive net sales growth of approximately 10% year-over-year in the fourth quarter and approximately 9% on a full year basis, driven by new product launches and strong direct-to-consumer business. Fourth quarter EBIT margins expanded 130 basis points year-over-year as a result of favorable price mix. For the full year, the segment delivered a strong EBIT margin of 16%, with 170 basis points of margin expansion year-over-year.

Marc Bitzer: Thanks, Roxanne. Turning to slide 9, I will cover how our MDA North America is well positioned to further organic growth and margin expansion. Our structural drivers for value creation in North America are stronger than ever. The first driver is our strong lineup of new products. As Marc mentioned earlier, in 2025, we transitioned over 30% of our product portfolio to new products, and we're seeing a very strong response from both our trade customers and consumers. These new products gain significant more floor space and their predecessors within the key retailers, resulting in share gains as we exit the year and we have more innovation coming in 2026. Second driver is our unique position as a domestic manufacturer in the tariff environment. Our US manufacturing legacy started over 110 years ago, and we never left. We produce more of our appliances in the US.

Juan Carlos Puente: Thanks, Roxanne. Turning to slide 9, I will cover how our MDA North America is well positioned to further organic growth and margin expansion. Our structural drivers for value creation in North America are stronger than ever. The first driver is our strong lineup of new products. As Marc mentioned earlier, in 2025, we transitioned over 30% of our product portfolio to new products, and we're seeing a very strong response from both our trade customers and consumers. These new products gain significant more floor space and their predecessors within the key retailers, resulting in share gains as we exit the year and we have more innovation coming in 2026. Second driver is our unique position as a domestic manufacturer in the tariff environment. Our US manufacturing legacy started over 110 years ago, and we never left. We produce more of our appliances in the US.

Marc Bitzer: than any of our industry peers, who, in contrast, only produce approximately 25% of what they sell in the US. Our US factories use approximately 96% American steel and work with thousands of US suppliers. We operate some of the largest appliance plants in the world, and we continue to make investments to strengthen our domestic position. The tariffs imposed by the current administration aim to support US manufacturers like Whirlpool, and we're starting to see positive signs suggesting that the tariffs will become a tailwind. As Roxanne mentioned, we have also observed a less promotional MDA industry throughout January in comparison to the same period in previous years. This suggests that the tariff costs for importers are beginning to impact their business, and therefore, the elevated promotions we saw last year are proving to be unsustainable in the long term.

than any of our industry peers, who, in contrast, only produce approximately 25% of what they sell in the US. Our US factories use approximately 96% American steel and work with thousands of US suppliers. We operate some of the largest appliance plants in the world, and we continue to make investments to strengthen our domestic position. The tariffs imposed by the current administration aim to support US manufacturers like Whirlpool, and we're starting to see positive signs suggesting that the tariffs will become a tailwind. As Roxanne mentioned, we have also observed a less promotional MDA industry throughout January in comparison to the same period in previous years. This suggests that the tariff costs for importers are beginning to impact their business, and therefore, the elevated promotions we saw last year are proving to be unsustainable in the long term.

Marc Bitzer: The last driver is the state of the US housing market, which I will cover in the following slide. Turning to slide 10, the historical data both for Existing Home Sales and New Home Sales clearly signals a multi-year recovery is on the horizon. Looking at existing homes over the last 40 years, whenever we observe a multi-year sales trough like the one we saw since 2022, a recovery has followed. The lack of recovery has created pent-up demand in the market. Existing Home Sales are highly correlated with the Discretionary Demand in home appliances, which, as a result, has also been suppressed. On new home construction, the fundamentals are also favorable and include decades of long undersupply of new homes since the Great Financial Crisis, coupled with the highest aging stock of existing homes in the US, which now has a median age over 40 years old.

The last driver is the state of the US housing market, which I will cover in the following slide. Turning to slide 10, the historical data both for Existing Home Sales and New Home Sales clearly signals a multi-year recovery is on the horizon. Looking at existing homes over the last 40 years, whenever we observe a multi-year sales trough like the one we saw since 2022, a recovery has followed. The lack of recovery has created pent-up demand in the market. Existing Home Sales are highly correlated with the Discretionary Demand in home appliances, which, as a result, has also been suppressed. On new home construction, the fundamentals are also favorable and include decades of long undersupply of new homes since the Great Financial Crisis, coupled with the highest aging stock of existing homes in the US, which now has a median age over 40 years old.

Marc Bitzer: Finally, while affordability concerns remain, the US government has made housing affordability a clear priority to address, which only strengthens our prospects of a recovery. In this context, and given our strong competitive advantage in the builders segment, there's simply no company better positioned to benefit from the multi-year housing recovery. Turning to slide 11, let me highlight one of the many new products we are launching this quarter that will continue to support our product leadership. Our new Whirlpool Laundry Tower allows the consumer to save space while having easy access controls. Featuring the new FreshFlow Vent system and an industry-first UV Clean technology, this product reduces bacteria in the wash without requiring high temperatures that compromise your fabrics. Now, let me turn it over to Ludo to review the MDA Latin America and SDA Global business.

Finally, while affordability concerns remain, the US government has made housing affordability a clear priority to address, which only strengthens our prospects of a recovery. In this context, and given our strong competitive advantage in the builders segment, there's simply no company better positioned to benefit from the multi-year housing recovery. Turning to slide 11, let me highlight one of the many new products we are launching this quarter that will continue to support our product leadership. Our new Whirlpool Laundry Tower allows the consumer to save space while having easy access controls. Featuring the new FreshFlow Vent system and an industry-first UV Clean technology, this product reduces bacteria in the wash without requiring high temperatures that compromise your fabrics. Now, let me turn it over to Ludo to review the MDA Latin America and SDA Global business.

Ludovic Beaufils: Thanks, Juan Carlos. Turning to slide 12, let me explain why we believe the MDA Latin America business is uniquely positioned to grow. MDA Latin America has enormous growth potential given the low market penetration of appliances and the industry's compound annual growth rate projections of approximately 4% to 5%. Our MDA business in Latin America has a sustained track record of value creation rooted in the strength of our products and brands and is ideally positioned to take advantage of this industry growth. We hold the number one share position in the region, supported by our strong historical presence in Brazil with the Brastemp and Consul brands. These are leading brands in consumer preference that have held this position for decades and, as a result, are present in more than half of Brazilian homes.

Ludovic Beaufils: Whirlpool brand also holds the number one position in terms of preference in the second largest market in Latin America, Mexico, and in many other smaller markets around the region. We have built an exceptionally strong infrastructure across the region. We have a well-established supply base, some of the largest plants in the world, a great distribution and service network, and a direct-to-consumer channel representing approximately 20% of our sales. We are therefore incredibly well positioned to continue to grow profitably in this very large region. Turning to slide 13, let me introduce one of the tools to drive that growth in 2026, a new lineup of refrigerators coming to the Brazilian market this quarter. Brastemp, our premium home appliance brand in Brazil, is launching a new portfolio of products in two of the most critical categories in the market, top-mount and bottom-mount refrigerators.

Whirlpool brand also holds the number one position in terms of preference in the second largest market in Latin America, Mexico, and in many other smaller markets around the region. We have built an exceptionally strong infrastructure across the region. We have a well-established supply base, some of the largest plants in the world, a great distribution and service network, and a direct-to-consumer channel representing approximately 20% of our sales. We are therefore incredibly well positioned to continue to grow profitably in this very large region. Turning to slide 13, let me introduce one of the tools to drive that growth in 2026, a new lineup of refrigerators coming to the Brazilian market this quarter. Brastemp, our premium home appliance brand in Brazil, is launching a new portfolio of products in two of the most critical categories in the market, top-mount and bottom-mount refrigerators.

Ludovic Beaufils: These new refrigerators offer increased capacity, improved energy efficiency, and bring a refreshed aesthetic to consumers' kitchen. They're poised to do very, very well in the market starting this quarter. Turning to slide 14, I will review how well positioned the SDA Global business is for continued profitable growth. As you already know, KitchenAid is an iconic brand known for its high-quality craftsmanship and performance, as well as superior design. It is the number one mixer brand in the world, and with over 75% of the products we sell in the U.S. being produced in the U.S., it holds a strong competitive advantage in an industry that is almost entirely reliant on imports. Across the globe, we have successfully developed strong trade relationships and, more recently, have significantly expanded our online presence, which now represents over 20% of our sales and continues to grow at an accelerated pace.

These new refrigerators offer increased capacity, improved energy efficiency, and bring a refreshed aesthetic to consumers' kitchen. They're poised to do very, very well in the market starting this quarter. Turning to slide 14, I will review how well positioned the SDA Global business is for continued profitable growth. As you already know, KitchenAid is an iconic brand known for its high-quality craftsmanship and performance, as well as superior design. It is the number one mixer brand in the world, and with over 75% of the products we sell in the U.S. being produced in the U.S., it holds a strong competitive advantage in an industry that is almost entirely reliant on imports. Across the globe, we have successfully developed strong trade relationships and, more recently, have significantly expanded our online presence, which now represents over 20% of our sales and continues to grow at an accelerated pace.

Ludovic Beaufils: Outside of the stand mixer, we're starting to drive tremendous growth in adjacent categories such as espresso, blenders, cordless appliances, and other food preparation segments. We are leveraging KitchenAid's strong brand preference, our industry expertise, and our established infrastructure to drive profitable growth in these categories, and we're successfully reinvesting the proceeds of that growth into further growth acceleration while maintaining highly accretive margins. Turning to slide 15, let me preview the exciting innovation coming to the SDA Global business this quarter. First, our KitchenAid compact grain and rice cooker. This tankless version of our popular grain and rice cooker now features precise pour technology, which automatically measures liquid as it is added based on your preferred texture and simmers rice and all kinds of grains to perfection. Next, our KitchenAid Artisan Plus stand mixer.

Outside of the stand mixer, we're starting to drive tremendous growth in adjacent categories such as espresso, blenders, cordless appliances, and other food preparation segments. We are leveraging KitchenAid's strong brand preference, our industry expertise, and our established infrastructure to drive profitable growth in these categories, and we're successfully reinvesting the proceeds of that growth into further growth acceleration while maintaining highly accretive margins. Turning to slide 15, let me preview the exciting innovation coming to the SDA Global business this quarter. First, our KitchenAid compact grain and rice cooker. This tankless version of our popular grain and rice cooker now features precise pour technology, which automatically measures liquid as it is added based on your preferred texture and simmers rice and all kinds of grains to perfection. Next, our KitchenAid Artisan Plus stand mixer.

Marc Bitzer: Thanks, Ludo. Turning to slide 17, I will review our guides for 2026. Given the recently executed transaction to reduce our majority stake in India, we have provided a reset baseline for our long-term targets in 2025 results. These targets reflect our business performance expectations during a mid-cycle, which will be after housing recovery has started, but before it reaches the peak. On a like-for-like basis, we expect revenue growth of approximately 5% in 2026. Our new product launches are expected to deliver growth in MDA North America, and we expect continued strength in our SDA Global and international businesses. On a like-for-like basis, we expect 80 to 110 basis points of ongoing EBIT margin expansion to 2026 EBIT margin of approximately 5.5% to 5.8%. Free cash flow is expected to deliver $400 to $500 million, or approximately 3% of net sales, driven by improved earnings and significant inventory optimization.

Marc Bitzer: We expect full-year ongoing earnings per share of approximately $7. This includes an adjusted effective tax rate of approximately 25%, which is an increase compared to 2025 and impacts 2026 ongoing earnings per share by approximately $2. Turning to slide 18, we show the assumptions supporting our 2026 ongoing EBIT margin guidance. We expect a positive price mix impact of 175 basis points from our recent and future new product launches, and benefit from our previously announced pricing actions in a reduced promotional environment. While we have seen interest rates beginning to ease, we do not expect a material catalyst for new home sales in early 2026. As mentioned before, we do see the potential for a faster recovery of existing home sales and thus discretionary demand, but at this point, we're not factoring this into our guidance.

We expect full-year ongoing earnings per share of approximately $7. This includes an adjusted effective tax rate of approximately 25%, which is an increase compared to 2025 and impacts 2026 ongoing earnings per share by approximately $2. Turning to slide 18, we show the assumptions supporting our 2026 ongoing EBIT margin guidance. We expect a positive price mix impact of 175 basis points from our recent and future new product launches, and benefit from our previously announced pricing actions in a reduced promotional environment. While we have seen interest rates beginning to ease, we do not expect a material catalyst for new home sales in early 2026. As mentioned before, we do see the potential for a faster recovery of existing home sales and thus discretionary demand, but at this point, we're not factoring this into our guidance.

Marc Bitzer: We will drive further actions to optimize our cost structure and expect 100 basis points of net cost benefit from more than $150 million of cost takeout actions. Based on having long-term steel agreements in place, we expect minimal to no impact on EBIT margin from raw materials this year. We expect approximately 125 basis points of negative impact from the tariffs announced in 2025 that will be concentrated in the first half of 2026. It is important to note that these impacts represent currently announced tariffs and do not factor in any future potential changes in trade policy. With approximately 100 new product launches this year, we plan to increase investments in marketing technology, which will impact margin by approximately 50 basis points. Currency and transaction impacts are both expected to have minimal impact on EBIT margin this year. Turning to slide 19, I will review our segment guidance.

We will drive further actions to optimize our cost structure and expect 100 basis points of net cost benefit from more than $150 million of cost takeout actions. Based on having long-term steel agreements in place, we expect minimal to no impact on EBIT margin from raw materials this year. We expect approximately 125 basis points of negative impact from the tariffs announced in 2025 that will be concentrated in the first half of 2026. It is important to note that these impacts represent currently announced tariffs and do not factor in any future potential changes in trade policy. With approximately 100 new product launches this year, we plan to increase investments in marketing technology, which will impact margin by approximately 50 basis points. Currency and transaction impacts are both expected to have minimal impact on EBIT margin this year. Turning to slide 19, I will review our segment guidance.

Marc Bitzer: Starting with industry demand, we expect the global industry to be approximately flat in 2025. In the U.S., we expect similar demand trends to what we saw throughout 2025, with an emphasis on replacement demand. Strong replacement demand creates a solid foundation for industry volumes, while consumer discretionary demand is still significantly below long-term averages. Again, this might change as a result of faster growth of existing home sales, thus providing upsides to our demand forecast. We expect the MDA Latin America industry to be up slightly between 0% and 3%. Finally, we expect the SDA Global industry to be approximately flat with our growth driven by new products and continued investments in our direct-to-consumer business. For MDA North America, we expect to deliver full-year EBIT margin of approximately 6%.

Starting with industry demand, we expect the global industry to be approximately flat in 2025. In the U.S., we expect similar demand trends to what we saw throughout 2025, with an emphasis on replacement demand. Strong replacement demand creates a solid foundation for industry volumes, while consumer discretionary demand is still significantly below long-term averages. Again, this might change as a result of faster growth of existing home sales, thus providing upsides to our demand forecast. We expect the MDA Latin America industry to be up slightly between 0% and 3%. Finally, we expect the SDA Global industry to be approximately flat with our growth driven by new products and continued investments in our direct-to-consumer business. For MDA North America, we expect to deliver full-year EBIT margin of approximately 6%.

Marc Bitzer: Previously announced pricing actions are expected to positively impact the full-year margin, and additional cost actions are expected to be delivered throughout the year. For MDA Latin America, we expect a solid EBIT margin of approximately 7%, driven by new product launches and continued cost takeout. For SDA Global, we expect a strong EBIT margin of approximately 15.5%, driven by sustained momentum from new products. Turning to slide 20, let me review the actions we are taking to deliver price mix expansion. Firstly, as mentioned, we've seen a less promotional environment in MLK and President's Day. This is an encouraging indicator that our competitors are now experiencing the full cost of tariffs. We first saw positive signs with the end of a Black Friday promotional period.

Previously announced pricing actions are expected to positively impact the full-year margin, and additional cost actions are expected to be delivered throughout the year. For MDA Latin America, we expect a solid EBIT margin of approximately 7%, driven by new product launches and continued cost takeout. For SDA Global, we expect a strong EBIT margin of approximately 15.5%, driven by sustained momentum from new products. Turning to slide 20, let me review the actions we are taking to deliver price mix expansion. Firstly, as mentioned, we've seen a less promotional environment in MLK and President's Day. This is an encouraging indicator that our competitors are now experiencing the full cost of tariffs. We first saw positive signs with the end of a Black Friday promotional period.

Marc Bitzer: While in prior years, retailers and competitors extended Black Friday prices well into January, we observed meaningful pricing moves immediately after Black Friday, probably an indication of preloaded inventories finally being sold through. Given these broader industry dynamics, we're confident in the 2026 pricing actions we previously announced. Secondly, the incremental flooring gained by the new product launch in 2025 is largely installed. The flooring costs are behind us, and we should start to experience the full benefit of these new products. As a reminder, the new products that we launched in North America gained over 30% incremental flooring on a like-for-like basis. Lastly, we're focused on continuing to expand our mass premium and premium product offering, where we see consumer preference for our brands and the opportunity to drive differentiation.

While in prior years, retailers and competitors extended Black Friday prices well into January, we observed meaningful pricing moves immediately after Black Friday, probably an indication of preloaded inventories finally being sold through. Given these broader industry dynamics, we're confident in the 2026 pricing actions we previously announced. Secondly, the incremental flooring gained by the new product launch in 2025 is largely installed. The flooring costs are behind us, and we should start to experience the full benefit of these new products. As a reminder, the new products that we launched in North America gained over 30% incremental flooring on a like-for-like basis. Lastly, we're focused on continuing to expand our mass premium and premium product offering, where we see consumer preference for our brands and the opportunity to drive differentiation.

Marc Bitzer: Our KitchenAid MDA launch in late 2025 is a perfect example of how we see an opportunity to elevate and position our brands for growth. Turning to slide 21, you will see the actions we're taking to support our cost position and deliver over $150 million of cost reduction in 2026. We are accelerating vertical integration and automation in our factories, leveraging some of our core competencies to improve quality and efficiency in manufacturing. In particular, vertical integration will not only bring us cost savings, but will further strengthen the resilience of our supply chain. We're taking steps to optimize our manufacturing and logistics footprint. And lastly, we're launching a strategic sourcing initiative to deliver the best landed costs for our components. We have had significant success in the past with activating the sourcing initiative and are excited to renew its effort in 2026.

Our KitchenAid MDA launch in late 2025 is a perfect example of how we see an opportunity to elevate and position our brands for growth. Turning to slide 21, you will see the actions we're taking to support our cost position and deliver over $150 million of cost reduction in 2026. We are accelerating vertical integration and automation in our factories, leveraging some of our core competencies to improve quality and efficiency in manufacturing. In particular, vertical integration will not only bring us cost savings, but will further strengthen the resilience of our supply chain. We're taking steps to optimize our manufacturing and logistics footprint. And lastly, we're launching a strategic sourcing initiative to deliver the best landed costs for our components. We have had significant success in the past with activating the sourcing initiative and are excited to renew its effort in 2026.

Marc Bitzer: Turning to slide 22, I will provide the drivers of our free cash flow guidance. I'm confident that we will improve free cash flow in 2026, and this is a key priority for us. We expect cash earnings of approximately $800 million, driven by an improvement in our earnings. We expect approximately $400 million of capital expenditures as we continue to invest in our products and fund organic growth. We plan to optimize our inventory and improve our working capital by approximately $100 million to support cash generation in 2026. We expect approximately $50 million of restructuring cash outlays related to our manufacturing and logistics footprint optimization efforts. Overall, we expect to deliver free cash flow of $400 to $500 million, or approximately 3% of net sales. Now, I will turn the call back over to Roxanne to review our capital allocation priorities for 2026.

Turning to slide 22, I will provide the drivers of our free cash flow guidance. I'm confident that we will improve free cash flow in 2026, and this is a key priority for us. We expect cash earnings of approximately $800 million, driven by an improvement in our earnings. We expect approximately $400 million of capital expenditures as we continue to invest in our products and fund organic growth. We plan to optimize our inventory and improve our working capital by approximately $100 million to support cash generation in 2026. We expect approximately $50 million of restructuring cash outlays related to our manufacturing and logistics footprint optimization efforts. Overall, we expect to deliver free cash flow of $400 to $500 million, or approximately 3% of net sales. Now, I will turn the call back over to Roxanne to review our capital allocation priorities for 2026.

Roxanne Warner: Thanks, Marc. Turning to slide 23, I will review our capital allocation priorities, which are consistent with what we shared in 2025. Funding our organic growth is critical to delivering innovative products that meet our consumers' needs. We will continue to invest in product innovation, digital transformation, and cost efficiency projects, with approximately $400 million of capital expenditure expected this year. Secondly, we are committed to reducing our debt levels. We expect to pay down at least $400 million of debt in 2026, continuing our commitment to deleverage. Thirdly, we are committed to returning cash to shareholders through funding a healthy dividend. We will continue to evaluate our dividend funding and ensure it aligns with our progress toward our long-term goals. As a reminder, the dividend is approved quarterly by the Board of Directors. Turning to slide 24, let me summarize what you heard today.

Roxanne Warner: Despite navigating a year of significant external shocks led by the substantial cost increase of tariffs, our 2025 results were largely in line with the prior year. We maintained our track record of cost takeout and delivered substantial cost reduction of $200 million to help offset the impact of tariff costs. We introduced a record number of new products, proving their early success through flooring expansion and share gains in the second half of 2025. As we look forward into 2026, we have another strong pipeline of new products coming. With industry pricing expected to normalize and structural cost takeout actions yielding results, we expect margins and free cash flow to strengthen. We expect the SDA Global business to continue to be a bright spot, with sustained momentum from new products resulting in significant year-over-year growth.

Despite navigating a year of significant external shocks led by the substantial cost increase of tariffs, our 2025 results were largely in line with the prior year. We maintained our track record of cost takeout and delivered substantial cost reduction of $200 million to help offset the impact of tariff costs. We introduced a record number of new products, proving their early success through flooring expansion and share gains in the second half of 2025. As we look forward into 2026, we have another strong pipeline of new products coming. With industry pricing expected to normalize and structural cost takeout actions yielding results, we expect margins and free cash flow to strengthen. We expect the SDA Global business to continue to be a bright spot, with sustained momentum from new products resulting in significant year-over-year growth.

Juan Carlos Puente: Yeah. So David, again, as you well know, there's two main components of replacement demand, discretionary demand. The replacement demand, what we basically said, is continues to stay on a very, very healthy structural level. And that is still on the tail end of post-COVID. We saw a significant higher use of appliances, and that just drives a lot of healthy ongoing replacement demand. As a reminder, as everybody knows, while we like that part of our business, it's not necessarily the most margin-creative part of our business. The discretionary side, and just to be also very clear on my guidance, we have not factored in upside on the discretionary side. The discretionary side would have to largely come from increased remodeling activities and, in particular, a faster or an uptake of existing home sales.

Marc Bitzer: Yeah. So David, again, as you well know, there's two main components of replacement demand, discretionary demand. The replacement demand, what we basically said, is continues to stay on a very, very healthy structural level. And that is still on the tail end of post-COVID. We saw a significant higher use of appliances, and that just drives a lot of healthy ongoing replacement demand. As a reminder, as everybody knows, while we like that part of our business, it's not necessarily the most margin-creative part of our business. The discretionary side, and just to be also very clear on my guidance, we have not factored in upside on the discretionary side. The discretionary side would have to largely come from increased remodeling activities and, in particular, a faster or an uptake of existing home sales.

Juan Carlos Puente: I mean, I think, David, there's a very significant pent-up demand tied towards the housing. And again, I'm not going to repeat what I think everybody knows. I mean, the entire housing market is, in terms of new home sales, undersupplied by between 3 million homes. Now, that will not happen overnight, but it just means the new homes will spell a multi-year uptick on demand. The other side is, and this is, and again, that could potentially materialize earlier, the discretionary side, which comes with remodeling or existing home sales, I think could accelerate faster than the new homes. And there is significant potential out there, as you know, but the consumer has equity, equity in particular in the form of housing stock. So the perceived equity the consumer has is there. It will take an uptick also in consumer sentiment to unleash that.

Marc Bitzer: I mean, I think, David, there's a very significant pent-up demand tied towards the housing. And again, I'm not going to repeat what I think everybody knows. I mean, the entire housing market is, in terms of new home sales, undersupplied by between 3 million homes. Now, that will not happen overnight, but it just means the new homes will spell a multi-year uptick on demand. The other side is, and this is, and again, that could potentially materialize earlier, the discretionary side, which comes with remodeling or existing home sales, I think could accelerate faster than the new homes. And there is significant potential out there, as you know, but the consumer has equity, equity in particular in the form of housing stock. So the perceived equity the consumer has is there. It will take an uptick also in consumer sentiment to unleash that.

Juan Carlos Puente: Yeah. I think, David, David, you're highlighting a very important point. Just as a recap, and I think many of you listening understand and know that when you have a lot of new product introductions, and as we highlighted, in particular, North America, we had the highest amount of product introductions in more than a decade. I mean, it's been massive. You have, of course, it starts actually in the factories. You have phase-in and phase-out costs because, of course, you don't run the factory in the most efficient way. If you, at one point, take down production and you ramp it up, you have inefficiencies in there. You have inefficiencies in warehousing and inventory because, for some period, and you saw that all in Q4, you hold inventory pretty much on phase-out and phase-in. And then lastly, you have very significant flooring costs, which just come with flooring products.

Marc Bitzer: Yeah. I think, David, David, you're highlighting a very important point. Just as a recap, and I think many of you listening understand and know that when you have a lot of new product introductions, and as we highlighted, in particular, North America, we had the highest amount of product introductions in more than a decade. I mean, it's been massive. You have, of course, it starts actually in the factories. You have phase-in and phase-out costs because, of course, you don't run the factory in the most efficient way. If you, at one point, take down production and you ramp it up, you have inefficiencies in there. You have inefficiencies in warehousing and inventory because, for some period, and you saw that all in Q4, you hold inventory pretty much on phase-out and phase-in. And then lastly, you have very significant flooring costs, which just come with flooring products.

Juan Carlos Puente: Now, ultimately, it's like a return on investment. You get your return on the flooring costs, but it all hit our P&L largely in 2025. So in a particular back half, and I'm not trying to take that as an excuse. It's just there. And it's an investment against the future. So as we turn the page into 2026, first of all, you have the absence of these introduction costs, which is an uplift. And second of all, now I have a full benefit of a higher flooring. We know, because of course we get weekly sell-out numbers, we know when new products are not just floored, they're selling. So we're very pleased with the sell-out. And so not only do you have the absence of a cost, but you also have tailwinds in the form of a demand on the new product.

Now, ultimately, it's like a return on investment. You get your return on the flooring costs, but it all hit our P&L largely in 2025. So in a particular back half, and I'm not trying to take that as an excuse. It's just there. And it's an investment against the future. So as we turn the page into 2026, first of all, you have the absence of these introduction costs, which is an uplift. And second of all, now I have a full benefit of a higher flooring. We know, because of course we get weekly sell-out numbers, we know when new products are not just floored, they're selling. So we're very pleased with the sell-out. And so not only do you have the absence of a cost, but you also have tailwinds in the form of a demand on the new product.

[Analyst] (JPMorgan): Good morning. My first question is for Roxanne and Juan Carlos. Congratulations, obviously, stepping into your new roles, your expanded roles. And Roxanne, it's a pleasure working with you again. What are each of your perspectives on if there's any kind of how you're going to approach the jobs over the next couple of years? Obviously, the business has had a number of challenges, particularly in the North America margin challenges through various macro, tariffs, promotional, etc. What's the road back from a margin perspective over the next few years? I mean, obviously, you continue to look at your kind of tried-and-true playbook of cost savings, better mix, etc. I know a lot of this is also macro-led with the challenges in the existing home sales and remodel market.

Michael Rehaut: Good morning. My first question is for Roxanne and Juan Carlos. Congratulations, obviously, stepping into your new roles, your expanded roles. And Roxanne, it's a pleasure working with you again. What are each of your perspectives on if there's any kind of how you're going to approach the jobs over the next couple of years? Obviously, the business has had a number of challenges, particularly in the North America margin challenges through various macro, tariffs, promotional, etc. What's the road back from a margin perspective over the next few years? I mean, obviously, you continue to look at your kind of tried-and-true playbook of cost savings, better mix, etc. I know a lot of this is also macro-led with the challenges in the existing home sales and remodel market.

Juan Carlos Puente: Yeah. So thank you very much for the congratulations. I am super happy and excited to be in this new role. Like I mentioned at the beginning, I've been in North America before, and I was part of, I would say, the global financial crisis in 2008. We moved in 2008, and then obviously that happened. So I was together with Marc in that turnaround in 2009, 2010. And not that those tools will be working moving forward, but I think, like Roxanne mentioned and we mentioned before, with the new products that we're putting in place, with aggressive cost take actions that we have, and obviously with our manufacturing footprint that is extremely strong in North America, we believe that laser focusing on that, we could turn the business around.

Juan Carlos Puente: Yeah. So Michael, so let me maybe give you a lot more color on what we've seen in North America up until President's Day. Obviously, I can't comment on the go forward. So first of all, in Q4, in some ways, we've seen two parts of a market in Q4. One was the non-promotional period where we had the new products in there where we actually liked what we saw and we picked up market share. The promotional period itself was intense by any definition. And I think once we compare it to outside numbers, you will see it was intense. We made a conscious decision to hold our ground during these promotional periods. We did not pick up share during the promotional period, but frankly, it was a very costly investment. I mean, there's no denial, and you've seen that in our number.

Marc Bitzer: Yeah. So Michael, so let me maybe give you a lot more color on what we've seen in North America up until President's Day. Obviously, I can't comment on the go forward. So first of all, in Q4, in some ways, we've seen two parts of a market in Q4. One was the non-promotional period where we had the new products in there where we actually liked what we saw and we picked up market share. The promotional period itself was intense by any definition. And I think once we compare it to outside numbers, you will see it was intense. We made a conscious decision to hold our ground during these promotional periods. We did not pick up share during the promotional period, but frankly, it was a very costly investment. I mean, there's no denial, and you've seen that in our number.

Juan Carlos Puente: What difference we saw after particularly Black Friday is, and it was a meaningful difference, is post-Black Friday, the prices, the promotional prices immediately recovered, pretty much exactly what we got after. And that is, for those of you following the industry a little bit closer, it's different from prior years. Very often, you saw that either retailers or competitors did not sell all the products they want Black Friday. Prices were extended well, in some cases into January. We did not see that last year. So as intense as the promotional period was, it also ended pretty abruptly. And these higher prices held now for pretty much six weeks. Now, we all know it's six weeks. It's not 52 weeks, but it's six weeks. And that is very different from prior year. We saw a meaningful price change already on MLK.

What difference we saw after particularly Black Friday is, and it was a meaningful difference, is post-Black Friday, the prices, the promotional prices immediately recovered, pretty much exactly what we got after. And that is, for those of you following the industry a little bit closer, it's different from prior years. Very often, you saw that either retailers or competitors did not sell all the products they want Black Friday. Prices were extended well, in some cases into January. We did not see that last year. So as intense as the promotional period was, it also ended pretty abruptly. And these higher prices held now for pretty much six weeks. Now, we all know it's six weeks. It's not 52 weeks, but it's six weeks. And that is very different from prior year. We saw a meaningful price change already on MLK.

Juan Carlos Puente: Yeah. I mean, there's several elements coming in that cadence. First of all, you will not see the 6% throughout the full year. Q1 in particular will be still impacted by a number of factors. First of all, we just see now the pricing, the more positive pricing coming through. So it's starting to build, and that is still a good guy. A negative side, we will curtail production. We said we will control inventories and will correct what we had too much of inventories. That will be a burden on our Q1 numbers in North America because we will adjust inventory. As Roxanne highlighted before, cash is a key priority, and we take that very seriously. So you will have an inventory reduction going against us in Q1. The pricing starts moving in our favor.

Marc Bitzer: Yeah. I mean, there's several elements coming in that cadence. First of all, you will not see the 6% throughout the full year. Q1 in particular will be still impacted by a number of factors. First of all, we just see now the pricing, the more positive pricing coming through. So it's starting to build, and that is still a good guy. A negative side, we will curtail production. We said we will control inventories and will correct what we had too much of inventories. That will be a burden on our Q1 numbers in North America because we will adjust inventory. As Roxanne highlighted before, cash is a key priority, and we take that very seriously. So you will have an inventory reduction going against us in Q1. The pricing starts moving in our favor.

Juan Carlos Puente: Yeah. So Rafe, so first of all, from our perspective, it's pure outside-in view on competitors. We don't know what's going through their heads or whatever. So what we observe, just more from a dataset, is we have a fairly sophisticated price scraping tool where every week we get thousands of in-store pricing for every competitor, every product, every SKU. So we have a fairly sophisticated in-house tool. So we pretty much weekly observe everything which was going on in the marketplace. So our comments in terms of promotional depth from what we see is based on this pricing scraping tool, which I would say is very accurate. And all my comments on the recovery afterwards is based on this price scraping tool. The actual mechanism which competitors use, it's their decision. I would say it's partially like we also do.

Marc Bitzer: Yeah. So Rafe, so first of all, from our perspective, it's pure outside-in view on competitors. We don't know what's going through their heads or whatever. So what we observe, just more from a dataset, is we have a fairly sophisticated price scraping tool where every week we get thousands of in-store pricing for every competitor, every product, every SKU. So we have a fairly sophisticated in-house tool. So we pretty much weekly observe everything which was going on in the marketplace. So our comments in terms of promotional depth from what we see is based on this pricing scraping tool, which I would say is very accurate. And all my comments on the recovery afterwards is based on this price scraping tool. The actual mechanism which competitors use, it's their decision. I would say it's partially like we also do.

Juan Carlos Puente: Yeah. So Andrew, I think what has changed versus what we had in Q3. Coming into Q4, we knew there's still some preloaded inventory in the market. Obviously, because we don't have exact competitor data, I think what we may have underestimated how much there still is out there. So the promotion, that there will be an aggressive promotion environment, we anticipated, but it was deeper than we expected, in all transparency. And now, at the same time, and I made that comment in the script already, is the fact that the price is corrected pretty immediately after Black Friday. I would read as an indication that this preloaded inventory is out of the system. Because if it would still be there, we would have seen Black Friday pricing continuing longer. So I think the big change is probably there was more inventory out there than we assumed.

Marc Bitzer: Yeah. So Andrew, I think what has changed versus what we had in Q3. Coming into Q4, we knew there's still some preloaded inventory in the market. Obviously, because we don't have exact competitor data, I think what we may have underestimated how much there still is out there. So the promotion, that there will be an aggressive promotion environment, we anticipated, but it was deeper than we expected, in all transparency. And now, at the same time, and I made that comment in the script already, is the fact that the price is corrected pretty immediately after Black Friday. I would read as an indication that this preloaded inventory is out of the system. Because if it would still be there, we would have seen Black Friday pricing continuing longer. So I think the big change is probably there was more inventory out there than we assumed.

Juan Carlos Puente: Yeah. So Andrew, I mean, first of all, to your question, we get sell-out data, i.e., cash register data for about 70% of our trade partners. So we have a pretty good sense about how we are doing from a sell-out. And coupled with that, we typically also get comparable house sales, i.e., we know how we're doing in the store in terms of picking up amounts of sale or not. So we have a very good sense. And that is, of course, critical, particularly when we're trying to assess the success of our new product launches. And a lot of confidence you heard before comes exactly from looking at the sell-out data on a weekly basis. To your question about the discretionary demand, again, re-emphasizing, it's not baked in the guidance. Is there a certain chance? Yes.

Marc Bitzer: Yeah. So Andrew, I mean, first of all, to your question, we get sell-out data, i.e., cash register data for about 70% of our trade partners. So we have a pretty good sense about how we are doing from a sell-out. And coupled with that, we typically also get comparable house sales, i.e., we know how we're doing in the store in terms of picking up amounts of sale or not. So we have a very good sense. And that is, of course, critical, particularly when we're trying to assess the success of our new product launches. And a lot of confidence you heard before comes exactly from looking at the sell-out data on a weekly basis. To your question about the discretionary demand, again, re-emphasizing, it's not baked in the guidance. Is there a certain chance? Yes.

Juan Carlos Puente: So Sam, again, we're not publishing what we assume as an industry pricing. A lot depends on what competitors will do. Having said that, you saw earlier, and that's why we added this slide with the three components of pricing. It's a better promotion environment, and it's new products and mix overall. Yes, versus in the 1.75, there is a component about what we just think from a less promotion environment. Again, we typically don't specify, but assume it's roughly 1/3, probably, of that overall assumption, or maybe 1/2 of a less promotion environment. In all transparency, yes, we like what we saw over the last six weeks, but of course, we're just cautious in terms of extrapolating the last six weeks of the full year. I think right now, this assumption is kind of a little bit of middle ground.

Marc Bitzer: So Sam, again, we're not publishing what we assume as an industry pricing. A lot depends on what competitors will do. Having said that, you saw earlier, and that's why we added this slide with the three components of pricing. It's a better promotion environment, and it's new products and mix overall. Yes, versus in the 1.75, there is a component about what we just think from a less promotion environment. Again, we typically don't specify, but assume it's roughly 1/3, probably, of that overall assumption, or maybe 1/2 of a less promotion environment. In all transparency, yes, we like what we saw over the last six weeks, but of course, we're just cautious in terms of extrapolating the last six weeks of the full year. I think right now, this assumption is kind of a little bit of middle ground.

Juan Carlos Puente: Yeah. So Charles, it's Marc. First of all, there is some carryover, but frankly, it's not that much. It's obvious overall, this $150 million+, it's probably less than 1/3 is carryover. And that largely comes from the actions which we initiated about the cost they got last year, but just carry through. And the additional actions, the vertical integration is actually a new angle which we're pursuing. We've made good experience with vertically integrating some components actually in our Mexico factories. And we will aggressively go after that also in North America, where we expect quite a sizable saving on the respective components, and frankly, also just more stability in our supply chain. That's one element. Automation is an ongoing effort and will accelerate. That will also drive benefits.

Marc Bitzer: Yeah. So Charles, it's Marc. First of all, there is some carryover, but frankly, it's not that much. It's obvious overall, this $150 million+, it's probably less than 1/3 is carryover. And that largely comes from the actions which we initiated about the cost they got last year, but just carry through. And the additional actions, the vertical integration is actually a new angle which we're pursuing. We've made good experience with vertically integrating some components actually in our Mexico factories. And we will aggressively go after that also in North America, where we expect quite a sizable saving on the respective components, and frankly, also just more stability in our supply chain. That's one element. Automation is an ongoing effort and will accelerate. That will also drive benefits.

Juan Carlos Puente: What we refer to as a strategic sourcing initiative is a fairly elaborate and sophisticated process, which we don't do every year because it's way too complex. Last time we've done that six years ago, and we got a lot of savings out of this one. It basically goes down to you take apart every single component, you weigh it, you do a global, completely clean sheet assessment of what should cost be. We're putting it out for bidding across the world. It's a very elaborate thorough process. And again, just for complexity, you can't do that every year. But given that it's six years ago, I think it's right. And we know the tool. We've done it before. And we expect, probably in the overall context, almost 1/3 of cost savings coming out of this one.

What we refer to as a strategic sourcing initiative is a fairly elaborate and sophisticated process, which we don't do every year because it's way too complex. Last time we've done that six years ago, and we got a lot of savings out of this one. It basically goes down to you take apart every single component, you weigh it, you do a global, completely clean sheet assessment of what should cost be. We're putting it out for bidding across the world. It's a very elaborate thorough process. And again, just for complexity, you can't do that every year. But given that it's six years ago, I think it's right. And we know the tool. We've done it before. And we expect, probably in the overall context, almost 1/3 of cost savings coming out of this one.

Juan Carlos Puente: So Jeffrey, there are 2 components. The absolute number of replacement volume we get, we expect to stay stable. We've seen that pretty stable now for an extended time period. Then again, it just comes to simple math. It's installed base, and we know that. The overall usage in terms of year has come down a little bit because people are more using it more intensively. That has now been stable for, I would say, 2, almost 3 years on a pure replacement side. So the volume will stay the same. But of course, when by definition, if we find a little bit discretionary demand picks up, the percentage of a total market replacement will come down. Right now, it's well above 60%. I wouldn't even call it peak cycle. I would call it early or midcycle. The discretionary side should easily cover 50%.

Marc Bitzer: So Jeffrey, there are 2 components. The absolute number of replacement volume we get, we expect to stay stable. We've seen that pretty stable now for an extended time period. Then again, it just comes to simple math. It's installed base, and we know that. The overall usage in terms of year has come down a little bit because people are more using it more intensively. That has now been stable for, I would say, 2, almost 3 years on a pure replacement side. So the volume will stay the same. But of course, when by definition, if we find a little bit discretionary demand picks up, the percentage of a total market replacement will come down. Right now, it's well above 60%. I wouldn't even call it peak cycle. I would call it early or midcycle. The discretionary side should easily cover 50%.

Juan Carlos Puente: Not easy, but we had years where the discretionary side was up to 60%. So the percentage is all driven by how much we would see of a discretionary demand going forward. So with that, I think that was the last question. Sorry, we went a little bit over time today, but there's new faces, new voices, and then I think a lot of good questions. Again, as you heard before from us, 2025 is behind us. It's in rearview. We right now look just forward to 2026. There are some encouraging signs already happening now in 2026. And I think we laid out the catalysts where we believe we are confident, and it's in our execution of control to deliver on them. And that gives us the confidence behind 2026. So thanks for joining me today, and looking forward to talk to you again next quarter.

Not easy, but we had years where the discretionary side was up to 60%. So the percentage is all driven by how much we would see of a discretionary demand going forward. So with that, I think that was the last question. Sorry, we went a little bit over time today, but there's new faces, new voices, and then I think a lot of good questions. Again, as you heard before from us, 2025 is behind us. It's in rearview. We right now look just forward to 2026. There are some encouraging signs already happening now in 2026. And I think we laid out the catalysts where we believe we are confident, and it's in our execution of control to deliver on them. And that gives us the confidence behind 2026. So thanks for joining me today, and looking forward to talk to you again next quarter.

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Q4 2025 Whirlpool Corp Earnings Call

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Q4 2025 Whirlpool Corp Earnings Call

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Q4 2025 Whirlpool Corp Earnings Call

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