Whirlpool (WHR) 23 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Max Tunnicliff	Senior Director of Investor Relations
Marc Bitzer	Chairman and Chief Executive Officer
James Peters	Chief Financial Officer
David MacGregor	Longbow Research LLC
Samuel Darkatsh	Raymond James & Associates, Inc.
Michael Rehaut	JPMorgan Securities LLC
Susan Maklari	Credit Suisse Securities
Curtis Nagle	Bank of America Merrill Lynch
Michael Dahl	RBC Capital Markets LLC
Kenneth Zener	KeyBanc Capital Markets, Inc.

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Whirlpool Corporation's First Quarter 2019 Earnings Release Call. Today's call is being recorded.

For opening remarks and introductions, I would like to turn the call over to Senior Director of Investor Relations, Max Tunnicliff.

Max Tunnicliff

Thank you, and welcome to our first quarter 2019 conference call.

Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer; and Jim Peters, our Chief Financial Officer.

with website available at track Section the today our of whirlpool.com. remarks a on presentation Investor Our

Before we statements begin, conduct in this I'll Whirlpool remind you we understanding be that will making future forward-looking Corporation's to you call, assist expectations. as we

could to results these from of today's measures. that ongoing includes remind discussed you materially many other periodic We statements XX-K non-GAAP measures indicators our that unrelated our latest indicative differ they and to are to believe reports. factors exclude actual our not Our may from due in of as We important these business are want or operations results operations. presentation items be

ongoing think provide of a directed measures GAAP will are of measures. At the package baseline to are most you the also time, to mode. supplemental for participants for comparable on website adjusted non-GAAP section operations. in in Relations business items the listen-only Investor the all information Listeners better We reconciliation our the posted our a analyzing this trends directly

analyst prepared for will remarks, call be the open our Following questions.

Marc. a we As ask With to that, that no I'll reminder, turn participants over call two than the more ask questions.

Marc Bitzer

our Thanks, On X, and first Slide good quarter we morning, show highlights. everyone.

our delivered record strong results, first As press including release, you $X.XX. another saw a share per quarter in we quarter of with ongoing earnings

softer certain basis European cost including excellent countries, XX by in progress by the Mexico, demand expansion impacted delivered we sustained countries, several price/mix was global China, driven fixed Canada, growth and revenue EBIT discipline. Although points and of U.S., margin

pressures. margin in despite expansion offset by delivered us very region points results is demand full-year This and industry favorability of macro which material delivering guidance, unchanged our performance expectations. basis XX confidence remains in gives raw North EBIT lower with continued continued our America total Additionally, impressive

in quarter X, to first Slide our discuss more Turning results detail. I’ll

Ongoing volume price/mix. very than X.X% EBIT to price/mix last we by delivered X% and strong quarter very compared unit of currency, offset strong for Excluding the growth declines. more X% margin driven global revenue year was

Finally, usage quarter impacted our are to we the full-year payments. flow and pleased free deliver first our normal believe reflects unfavorably certain timing was Overall, we commitment. of of cash quarter well-positioned with by results cash are on first seasonality our very and

Turning the to as we the in Slide points quarter United new of States. the approximately show improvement actions basis well as margin of during details We pricing X, we first benefits carryover primarily our realized XXX pricing performance. the actions prior quarter year margin as first of delivered

which pricing were benefits half and price/mix inflation expect continue benefit from the a to compare approximately partially will begin cost basis to by offset We the points in on against of throughout XXX year-over-year of currency. XXXX. margin second higher as year, moderate unfavorable basis slightly we These

to it turn review to regional Jim I'll results. Now our over

James Peters

Thanks, Marc, good and morning, everyone.

Overall, Turning the our challenging expansion to very We with Slide North revenue quarter we pressures. EBIT strong points XX XXX X% of very points industry basis expanded offset basis as over and margin first quarter results for macro inflation. partially cost demand strong despite results was and X, which by a I'll in the review region. margin included by continued EBIT environment, cost a decline approximately growth in price/mix strong delivered America

testament and brand significant underlying is again and a business to results our strong our product external Our portfolio, cost fixed and flexible the of and America ability in once pressures North strength supply overcome our discipline demonstrate chain. to

quarter Europe, first for results X, we our East Africa review the and Middle Slide region. to Turning

improvement, fixed with to continue and the cost primarily the X%, basis we of EBIT volume of unit to our right partially benefits points, size as which our guidance Excluding offset from sales levels increased our currency, actions increased improvement business. by XX and lower margins line were production impact net volumes volume. our X%, while stabilize nearly improved reduction in actions prior

impacted by points continue margins basis our were Additionally, approximately as EBIT XX remaining unfavorably in inventory we to Turkey. liquidate

actions, exit operations are and we of operations of on to potential to our As domestic it South the appliance our sales the the quarter. Turkish complete And track our relates Hotpoint-branded by a market business sale. second actively for we to continue improvement end small Africa

we first the to Latin Now for review turn region. X America our to quarter results Slide

growth, volume These positive in Mexico. actions of despite and plus currency price the additional negative XXX points. through cost-based offset unfavorable price/mix, increased industry impact margin impact of driven of by approximately currency, our EBIT benefited continued Excluding X%, net basis share announced sales previously over the increases improvements carryover unit demand gains, discipline. from cost

favorably were approximately shown now on by Slide $XX results results XX. certain We tax million the of are first monetization Asia in year prior quarter our Lastly, impacted to turn the region, for credits. which

Excluding the impact of currency decreased net sales XX%.

with growth margin business and another India EBIT quarter Our delivered share solid and had improvement. unit gains volume excellent

by in weakness significant to was industry sharp offset China. However, demand investments decline volume brand increased with along this due in

brand. As the products branded Whirlpool we from transitioned to Sanyo

back I'd review to turn it to like over Marc Now, to our guidance.

Marc Bitzer

X%. Slide Thanks, line guidance unchanged. assumptions our XXXX for with remain our drive expect net long-term growth of we In sales XX, Jim. organic to approximately goals, On

of cash guidance, a compared of sales. cash As we long-term X.X%, to to previous of to margins before, our free million deliver X% strongly $XXX XXXX. expect conversion we net Consistent basis with goal of X.X% to XX million X% towards $XXX progressing flow expect to improvement ongoing point EBIT

strengthen deliver per confidence on delivering $XX expect of Our in first quarter $XX. to full-year we earnings financial and results our share to commitment, to our ongoing continue

show of Slide our guidance. drivers the we to updated margin EBIT XX, Turning

our improvement improvement benefits mixed based volume basis guidance. in deliver demand XXX in points related with lower continued revised net of production approximately line previous expectations. XXXX, now on price to expect of and point expect basis We related XX We and industry cost

margin the guidance and unchanged cost to basis we by Although our for macro economic the margin inflation us remain guidance versus expansion has our XX expect material remains inflation pressures favorably continue elevated, prior year. points leading to total, In meaningful raw down, revise slowed full-year.

cash cover will Jim regional Now, our guidance priorities. and

James Peters

margin we our industry regional the guidance XX, EBIT and Thanks, Marc. year. show Slide On for

industry Our are of in to revising industry Based ranges first range X% U.S. North flat weaker for we America. our exception the expected, guidance to than guidance full-year. negative are unchanged the quarter, with regional the on

and we the quarter. EBIT and demand inflation. Although demand of the we North offset are range by first In as negative actions partially tariff industry material least China are industry the unchanged XX% demand to Asia, margins continue price/mix America at benefits lower and and as Mexico from expect guidance is America, raw trending remaining for the experienced regions, of industry in both low-end in towards Latin

the in positive reflect In deliver second rate, EMEA, full-year, the restoring we the at levels As focusing quarter first quarter our production confident two quarterly we for to of inventory rather sequential results will cause to right that the EBIT normal breakeven launches. to items support breakeven meaning should as a third the second sizing We on would North quarter than continue of ability results quarter, to quarter anticipate look the reduce volumes volume we to above size our margins marketing the right closely you expect. plan in exiting year. we investments resembled America remain in and full more improvement have We increase first business. that product and

Asia unchanged. guidance remains Lastly, America Latin and for our

XXXX. to of unchanged, XXXX With earnings expect impact margin cash XX. which committed we capital, driving will is flow, partially expected by sale in to We free sustainably the Turning our lower result the business. to working improvement drivers of remain continue offset in discuss free compressor cash Slide to of positively flow. $XXX million our capital I Embraco cash guidance to working

balance We lower our of $XXX will the of approximately million. continue paid to Authority Embraco. second the flow the million, committed million the $XXX first million the be sale from French remain was $XX quarter And in flow free to restructuring the impacted primarily of total, cash outlays, free at cash The previously $XX of year. certain $XXX of discussed, anticipated to quarter. million as payment partial In guidance Competition unfavorably delivering anticipate by we for excluding items, approximately timing unchanged proceeds leaving remaining cash

show We XX. our allocation capital Slide to Turning priorities.

unchanged. the remain allocation Our year priorities capital for

of significant towards We will continue progress debt-to-EBITDA to X.X. our target gross year-end make

we for of in addition, generate which strong cash free consecutive going is confidence a business seventh our raised our reflection year, the flow ability to quarterly forward. In our dividend the and

Lastly, of remainder similar we for $XX a common year. and repurchased million approximately stock the anticipate repurchases in level of the quarterly quarter the of

open up end it remarks questions. for Now we and our will formal

Operator

Longbow Instructions] Your first ahead. MacGregor David from you. from Research. Please [Operator question of the line Thank go comes

David MacGregor

Good everyone. Yes. morning,

Marc Bitzer

Good David. morning,

James Peters

morning, Good David.

David MacGregor

you much and [was of talk you're environment. on a price how But feel guidance? I XXX] guess, mix? points and versus follow-up. was have basis good how And from given the was And a in realized I volume about a I tough price/mix do industry you’re implied is price/mix, improved quarter pricing reduced your that wanted guess what I to an Congratulations North American sustainable

Marc Bitzer

it’s David, Marc.

me question. Let this just take

So basis points to. you’re which I'm referring not sure, exactly XXX

average would coming again margin refer not we the all, impact to is of what First a) is value sales what from necessarily price/mix.

$XXX been know, we over a material reflection title, ever – in of So two as the significant is was most deemed tune you and strongest our record of had increases. still years increases also one of regions as terms price/mix rounds million America, and significantly several we of positive. not across cost-based North That in company. margin categories. the we ultimately It's overall as impact of – have It's but cost cumulative price only

forward-looking so to place. on do And statement fundamental Yes, our very this mitigating bit in managing these product had increase. products is would cost of price/mix. costs with help a full-year is a price the us a I emphasize As good we price/mix us can't done opportunity, I the for in little should say I relief increases. done more still pricing, price like And coming terms a on need is from give all job there, small new we got introductions, you inflation but out but material we particularly of that to in I have team far. basis. cumulative executed we've And for new still the which also increase think there the has cost, know, opportunities in We've with would relief, the what a material of there. impact

David MacGregor

Okay.

us evidence success first European little that your give results? with you what in we Can efforts a Europe. on more retailers just quarter the quarter relisted and on second detail to question get of Second see

Marc Bitzer

Yes.

as January, we we we've expect see and Europe I or to in you what for seen. about that's in David, release have mean QX growth want So X% volume to should earnings know we indicated

number kind would of would of floors. marks which early decline, done. volume first QX this stemmed I to one success say would say a I indication relisted So of be first is getting to – for an of it a where also But quarter needs lot on be we say more

been below are We X% have years QX. in still where up two ago. one or We're we

still to I QX milestones more are a relisting be numbers along hopefully and So done. way. there encouraging more see the would But first the milestone, from perspective we as an read

Operator

of Please Your comes from Raymond next ahead. question line Sam go James. Darkatsh from the

Samuel Darkatsh

Good morning, Good Marc. How you? are Jim. morning,

Marc Bitzer

morning. Sam. Good Good,

James Peters

Sam. Hi,

Samuel Darkatsh

Two questions.

First, America. wanted production explore I to versus in North shipments

– cut mentioning color that last the quarter might that in down production in XXXX your you from what XX% production? in Jim, year I the on quantification shipments, but you're a assume in know shipments headwind the that for help guidance, production what last maybe significant second what call XXXX second reset? last was of to does versus terms that year think I a been you're quarter, really it of versus year's excluding standpoint which going lower was your production maybe margin. from drag I terms is have think could

James Peters

will inventory. lower from our primarily additional overall Sam, Yes. obviously production because that XXXX be we've working takeout, is capital assumption shipments than which for targeted slightly comes

the for the level a the of full-year not assumption in similar extent XXXX. is we had to So

the most we our have levels of it if the if production below you rest will reduce the adjust in assuming as look And production Now going be industry in had at lower the what not quarter. our to expectations, you levels the our specifically QX we in production second shipment that for look it's so out similar year relatively industry to quarter, Year-over-year year-over-year. will did, North the we're pretty year, in little similar adjusted back QX. a to but the bit get was actually of be again late to significantly amount, America and at levels you should to and of production the material where is then be half a U.S.

Marc Bitzer

need to North touch year-over-year, in volume which an softer of and in or our the last can’t just business which our is just Maybe just a to about levels, $X.XX so in additional you QX. don't all in into add you total Sam, looks it knew time inventory in industry, inventory the our inventory in profit, never we be expected America, and second because simply But know do versus question. comments per kind leverage get with fixed the we to number. it impact, wrong adjust and and is want week a will it’s product manufacturing an it perspective elevated it last tend your than deal particularly it's factory on still okay, factor is Marc. to reality. year-end. by we that's on can transparency will very of just to overall one will work $X.XX not also a before inventory a from you market we keep mind, we And good and year’s was feel a product that you guys adjust committed, very, bit, Again, depends is to on But and from dollar, QX intensity we was levels with you different most drag it's reduction cost in do And have loaders. respective and and kind whenever on as such of QX factor. very we we inventory and up

our Having said guidance. profitability. into on our it impact an overall that, be baked will that is So

Samuel Darkatsh

Thank you.

Are your Second question, that than mentioned going to see higher least also? Marc. know we would a little expected. How drawdowns I at domestically characterize you inventories you channel retail are some as you the at well? inventories

Marc Bitzer

our factors information we to you with the some the and most I pretty Sam, trade have products that period, inventory same kind inventory the bit. driven the is know, out the sell-in there, at is as level by right there Yes. I number the now to some are a particularly industry BEFIEX year, of retailer. I Right say Last number from reasonably would balanced. inventory moves little inventory now, – refers were – which we probably elevated mean a QX of say of actually again, relates would balanced.

retailers pretty the and elevated much levels significantly right So we don't now inventory see with across that's board.

Samuel Darkatsh

Thank you.

Operator

line ahead. JPMorgan. the go from of comes question from next Your Michael Rehaut Please

Michael Rehaut

my Good question. everyone. morning, Thanks. for taking Thanks

guidance I just there. because question, sure we’ve around want questions appreciate last the to around there – inventory First some levels make thoughts the got the night, this morning and and

sense So of of just to margins to guess North to to second I'm that clarify, you to sense full impact sorry, that's just had that a a quarter a decline. perhaps you're that the year-ago first strong what pluses you sequential more XX American flat, quarter it's XX or inventory that of a and – about point a give year-over-year similar obviously want impact. I minuses it production of bps get can points about a when drawdown say the in reduction and basis Now Are levels, then some reduced take the is because the we be perhaps improvement? there, the XX basis inventory, talking you of are

a as of shooting trying and inventory Just dollar of sense a magnitude the result. what for of type reduction to you're degree get

Marc Bitzer

Yes, Michael, it’s Marc.

margins. First the – me North start of let with all, on American

and somewhere XX% don't confident I on EBIT know, year with between Having plus. probably starting say guided that, total and QX very confident plus North the full-year was we you was As XX.X%. XX% give the on would we're the guidance America the we on region. said the – quarterly margin,

that's any reality, I any should Okay, don't irregular abnormal you the think the of or quarter expect for than and year. move a

So that we very performance. last see that a over strong demonstrated right very year, now and we've steady,

So have inventories. baked want are and any to we this of kind comment in, one, moves the inventory a in on make I

a without take proportion. not Let's

at are I And will our inventories good increase we you've last also it. cash years, seen it year-over-year, to point. our we've down. versus want very of see So adjust a inventory starting capital. story. part been flow moment, want managing Company big two where a we disciplined That the That’s our we slight we working over was of even – a in think the have, But

is something steady a on a margin it move, So it's on but which a big, massive more QX. not basis. a you sequential will do but should in the we not as margin, impact such, see also And big

James Peters

mean Jim. is I this Yes, Michael,

I pointed think capital in we're working if on QX overall working to of X.X%. sales now at as we year were close Marc closer a last you capital, and net as look out, to percentage our X% at

you our statement, indicative of the year. out this cash that's an see million last If the amount flow incremental look really second of you that get look built And versus we $XXX in at here. quarter year we inventory to sooner

amount, not the we're but So an a very focused reducing on, amount near-term. massive that in

Michael Rehaut

you've of that kind years And pretty longer-term How set? still I the to ago you other That's update you think of should initially gave impressive, about you've a volume the is as it continuing EMEA. notable I think that. we from in stability your secondly, items quarter, the this obviously margins very for number congrats standpoint the in well. or us way and some actions overall on as that Europe, restructuring execute operating margin got as there progress some look X% working to helpful. was two through targets the three so guess that

be of couple years to that kind now single-digit think or should the timing of track? next mid number. about achieving think about that How to years? of over timelines of walk around like Anything of it in on profitability it a we ratcheted Should pushing that X% next think back couple X% of you've we it target? kind out? over I improvement the the of Is terms how margin the

Marc Bitzer

it's Yes, Michael, Marc.

maybe me let haven't in Europe in for also last quarters. several we context. that put Obviously, again, So loss a made

levers appliance that XX% Our – operational exiting selling Hotpoint-brand restructuring the South actions, recovering small the Turkey, key domestic and the domestic has XX% markets additional doing the the and turnaround business. are And potentially is largely focus of on our or business. to around Africa been on volume,

most not South actions All of be will these QX. the exception ones say our completed. probably track, on but Africa, these I of with would completed for of

good Jim indicated which operational from the I we is QX as expect where as X% and an said, Europe with number and turnaround. a So in about X% breakeven. we breakeven margin And full-year to to are operating to exit feel we expect repeatedly close we are to

would perspective that last is an I starting how doing and and would how place our is in So market further we say – kitchen around have business, also in operation from we're take put particular share largely year, mix business. a we We actions why up We've can for profitable strategy place. from priorities, track. redefined operational several – Europe that we around on to these regain very business and a the focused lost which is

take step. we feel always about good said from these first Now but are we to implement, strategies I longer where

targets. time with years. We we that that's Now what in of famous all probably against lost lost just And two lost. mind, we X% this

competitors. So we but capable believe of delivering some the X% margin, by we is evidenced still as EBIT business structured

X% can So deliver But time. industry Europe this lost EBIT margin. in we

over show or the be target mid-term update but but you we we I long-term in about so both the next mid-term York, and what long-term, long-term two Day an timeline specific we'll more line years. targets will we expect would what about three give our the we targets, you Investor and give ask New the expect the exact Mike, will will at X%, actually On time

Michael Rehaut

you. Thank Okay.

Operator

next comes Please line the Credit ahead. Your Maklari from question from go of Susan Suisse.

Susan Maklari

Thank you. Good morning.

Marc Bitzer

Good morning, Susan.

Susan Maklari

U.S. My there's and that sort in I mean much still are that like you're being spite first of is from that housing all around softer seeing. economic a the quarter, demand. of actually seeing what industry a unit in those of question backdrop broader than unemployment implying seems just supportive. the kinds GDP things is first and level of weaker It sort we're

as we And you're move two so can the where dynamics opposing you the is? How maybe should you quarter? about as understand feeling just we help business through how And year? first exited maybe coming the the these think disconnect about us together

Marc Bitzer

Marc. it’s Susan, Yes.

take me Let one. this

year right also particular, did demand in QX softer indicated levels, That – from trailing elevated one around QX, a reflection also than same mean I the seen a little soft, was all which would – driven customers U.S. a out we bit is of inventory of element. QX that frankly number a would but the a normalized. stronger was little it the when year trade time the an the – is expect. of and and say, sell-in much trade first of So bit sell-through the quite there in now, have four inventory with you’ve now, last partially elevated QX is we of negative, I factors. I it’s by and say been quarters they bit pretty as right don't start a and sell-in last already QX And

read so as from a not there's inventory is pure would moves, you some right now as So soft sell-in. sell-through the

market is driven down. moving by two it basic sideways, that, said factors. is, been, That replacement demand has overall and having discretionary sluggish the the Now was demand. call or of components One it two being ultimately slightly

expect fundamental touch of remodeling. we housing supply U.S. And bit the early was you XX year. seen the low than fundamental always over demand, from and offsetting housing comping cycle are that if that the earnings item look been most market would that terms said the years said we probably at encouraging and that six demand, intact rates expected, of that with kind household the of the million people including against demand And was We seeing is has of us. is going home last a started than prices, knew a the of Having on. said For soft, over as bit ago. largely largely has market faster $X.X days and over And dynamics little which cycle that stock last and you expected. – little always supply We softer still still bit what very in. age probably last constrained. replacement and suppression happens said from softer sales that, saw most a see it's the It's owned in of discretionary is from both driving now development, driven. you've very The rise not rental now months one that when that some from housing the We little people but we much than of forward. year in market led calls, that in replacement QX a coming housing coming last two soft, both is housing demographic Having been constrained demands to $X.X it of and QX. housing we pretty formation, below a believe you is million, softer, which the the been and existing appreciation and home particularly from mortgage starts

that single-digit U.S. the remain potentially stabilizing at why clients the that's don't growing demand just overall we housing next it low couple down. And of market see We fundamental years. the confident and So we stable. coming still also over our see

Susan Maklari

And including around I update that the and likely color. raw My especially in in tariffs? a in role terms the step resins? Can just we that How is of there there. $XXX and color what initially do give up going also $XXX much, Thank million? know about with of in the with within playing on more are be million that was less you much the to the think that's the the side XX% to second steel been in helpful. question you material little that, terms seeming what's That's then us on, Okay. of things. just inflation you for

Marc Bitzer

Susan, again it’s Marc.

and mind. plastics It are we gave pretty trends plays and see a margin we and how frankly, And increase side of, So a of materials in not where oil QX pre say tariff materials, as kind we side, part lose but not steel that’s prices got color. our said, On full-year down assumption. increases. from slightly we material point there a should bit year-over-year a little – that. is inflation margin kind to see why from raw from is side. overall, heard from walk, of less And what expected took much by relief total we quarter basically a and had and year-over-year little out. comments, we the the we have would we Raw of is me ever But you've a confirm only in headwinds little by that of recent all That a us still bit of in coming headwind large adjusted raw basis. give still bit but relief the Having around appreciation and versus raw original you material largely just stable. on we and a I raw let is more our uncertainty we

probably at right where we looks List tariffs, will the at of say part largely now, there a change, a on Section mind reduction tariff, for XX% time and get is And what in being of April came it and better is also XXX materials. that remain outlook is I numbers. from slightly until as So headwinds biggest from and would these from included in marginal the XX% least the On we probably which raw a coming originally it X of news. had new

we call an or million is own X million said I about in its every earlier month. X impact think bad on

want material that remind is raw component elements. in and and uncertainties also just So impact materials also tariffs. we yes, raw other the to we a – slide and ever context positive tariffs why overall in that our is reduce my and I again on

one and you are XX. still now is was which right at is million the price, give $XXX have around we $XXX it example The So of mid-quarter QX, at concerned to around million. the Brazilian reals currencies oil world

of guidance other that's now this we but within factored are our pieces. moving right there So and all included pieces is year. confidence, why Again, guidance we these the for right feel moving the

Susan Maklari

thank Okay, you.

Operator

comes question the of America. Bank go Curtis next Nagle ahead. of from Your line from Please

Curtis Nagle

Thank Would of housing demand discretionary? in saw hold? XX% you something numbers last you guys U.S. believe split XX% to very be then I order that the the much. the still give and were I replacement morning. the at least able is between Good and and XX%,

Marc Bitzer

Marc. This Yes, is Curtis.

there's no First big you and XXXX, definition of versus can and our scientific replacement would a about the versus there now you estimate give give definition caveat, or We follow-up. total discretionary we Max discretionary. market for right can a XX% is of XX% about replacement of In all, is markets. market

had On have side a side, demands the – think would over show years I've a moving And of little replacement I more one starts XX right and and I is important stabilizers is replacement that reflection getting cycle more side side expected than ago, discretionary thing kind numbers. sideways of in a the now, would is the typical last and coming of which strength simply we discretionary half of mind. the originally say we the to seen absolute years appliance now replacement we've probably kind bit down would a trough. by into that now that is,

James Peters

had and XX% the and – housing remodels is XX%, other it's on XX% split the is more you're new Yes, you the remainder and typically discretionary, bus, on discretionary.

the you split just out So there. give to full

Curtis Nagle

stretch and us Just exiting mean take terms five up it what is guess there. you follow-up or a in if you Yes Okay, very terms if how I going you don't of volumes appreciate a progress, great. we're helpful. doing I That’s it start progress, probably then I guess mean, guess consider look through and The would awhile on know transition I and don't things much take awhile profitability market I are in the actually I some down positioned; maybe guys I it. first number probably climb you China. in so market? share. are just would brands, given to of –

I that are yes, So thinking market? how you positioning guess about in

Marc Bitzer

is So Marc. this Curtis,

was soft all, transfer. down QX market That performance, as strong a QX, you start including overall a but reflection indicated India, you really So alluded share, but China strong Asia, in numbers, performance China of Southeast to a But in our first branch but soft. market the environment. is there's China unit soft first Hong very shows obviously with Asia Kong, and a EBIT was of would strong XX%. I

fair to or it, China know As but in now in China delay, and single-digit a low high a accurate always but market the double-digit and not was become assume it's XXX% total down you market data certain right down.

saw So we it significant market a which make doesn't easier. softness,

for and mist be that the of growth we We and the but the is are will course branch which in strong very Sanyo saw transfer us Whirlpool with on brand, years, coming number of the brand, tend down. of a of opposite we effect

down China. So in the We net significant brand transfer. effect had volumes industry between

brand significant transfer. more in advertising a in do in are China forward. that investments committed That's see in QX you to and seen why brand will you've going We also

keep base. to important China, far throughout brand produced microwave And We've make successful. this pretty the much we a mind in as are committed talk transfer this as world. all about very production when we So China

out We refrigerator have China. and very sophisticated strong a four-door coming of

We have more exports. and more

us. the a important I challenging, it's which for is important China very It's market, of beyond course agree. domestic us long-term production base also and So for

Curtis Nagle

Okay, very much. fair enough. Thanks

Operator

Markets. line comes go Mike Please Your Capital the ahead. next RBC question of from from Dahl

Michael Dahl

my for morning. Good taking questions. Thanks

Marc Bitzer

morning. Good

James Peters

Good morning.

Michael Dahl

I around margins. than rather remarks, North comments margins. America wanted the clarification, were margins quarter America the Jim, North in as commentary opening would year-ago a first just that in margins I the to be resemble follow-up, Marc and thought XQ

pretty to takedowns? So XX.X% of context that because pressures solid still I is number a want clarify just that on production in talking about you're the the

James Peters

think, This we've it is Mike. at the to And look we Yes, America quarter-over-quarter, Jim. said when for full-year, XX% North plus. as you expect I again be

we And earlier, did that the significant guidance, – close going slight said we quarterly but that as won't that production benefit we're be quarter, a deviation. have in and of that benefit be it levels I that will the some shipment quarter, above correct our second slight first So as incremental give the Marc throughout number a within to don't to but – year. going it we're implies to and say,

So should that think you I think way. about it

Michael Dahl

you lease my if give from adopted year, detail us guys income new what, coming had could this little expense it, I hoping on I second think more question, on an was accounting line. it's Got and you And was it sundry okay. impact a any P&L? the Where

but if give it something accounting the on and the if impacting somewhere just detail maybe there So else, lease also that I was can you any know us sundry? or don't

James Peters

Yes.

look, if leases you put And made was this off balance you in accounting on change effectively, listen back, your step rather than sheets. U.S. accounting that the you wide and So that by had your to now having all was a sheet now. adopt rules to balance and lease Mike

a is put on lease there's impact that that we as offset future you that that. $XXX nothing, expense. were the because over our So a million offsets that The balance sheet an flowing on P&L through payable – for currently of

through that have put way, It's your you balance follow payments. your to that versus before. a cash just still You balance similar off way them had these the in still on you have now sheet sheet similar

operational we we – America. had the In it's that GAAP Latin line what in taxes. some of a out had On within carved significant results. legal of a a only we terms this had in so we sundry, regarding won We ongoing, our case, is gain

about it fees. recognized we of sundry again gain success that And down success So and in fees, that in that line. million on $XX sits income that's and out, legal interest carved net taxes that's but an

our that it's – we nothing results that's So again affects within ongoing – there.

Michael Dahl

you. Thank Okay.

James Peters

Michael. Thanks,

Operator

Ken Zener [Operator of ahead. question from line go Instructions] Please from Your KeyBanc. next comes the

Kenneth Zener

everybody. Good morning,

Marc Bitzer

morning, Ken. Good

James Peters

Good morning.

Kenneth Zener

America going your Nice to Analyst picks you're North I'm well as sure new presentation. your this margins in as at stuff Day. addressing be

one for you. So have I only question really

pressure, be to your margins, long to production a debate obviously going up, is the America. people It's think of new I question might alleviates from operationally. into Given North that coming thought American have occurred you near-term strength my obviously. But

other got tailwind U.S. had decline guidance So offset the the a you you levers for But had production. obviously have cost. price. you lower – from the of would help you lot input in What

of the for from operating mean you away address levers flexibility anything that goes I that Or the platform strength would cost, input very lower might wondering you had. one have have And you I much. it you've that Thank obviously price the I just kind you and the I'm no cut pulled? other way could have would piece. if except had am production? taking just – there I to to mean could think So were

Marc Bitzer

Yes.

down extended a look just industry. of North take Ken, So let We trailing a now margins, you Investor quarter try more very we down. – was even wonder. strong America margin four you But one not the want I the show a been me in maybe if And inventories in and broader emphasize, took again, North this over period if all, for inventory, we though particularly strategic on at last one. North quarter, to look And in America negative to Meeting. the an don't the four that also even quarters, last industry we regional operationally, first perspective will give had at America has

demonstrated these margins So we I has tough team despite impressively and successfully can expand say environments. the would

pluses plus. industry, XX% or any quarters, given four of rate we're we some minuses margin XX% of you and So last in and have cetera, run over sustained kind on quarter, a but have et now

well environment focused bit two it. feel with had and to would very, The done remaining feel pricing. have done costs, such managing Yes, years the excellent you the ago, creation for we It kind value well. easy team very executing so and particularly [say has We I to been In But in promotions, tempted future. job that] our So intact. too strong also we in pricing. an will or any in just about fixed about the an three margin. staying Thailand so good very ultimately I very price, good of very or were costs that fixed disciplined, a expand particularly very in cost will on disciplined [indiscernible] be fixed base little remain we've

and down inflation, more inflationary other going we raw is It's else. this particularly are The massive better cost have it environment we which elements these around find and traction to been tariffs, We forward, pressure start in in finding again managing logistic of not painful. very would actions, and everything that in progress and is cost forward, getting turn just materials now, the we whatever and us. I now have cost costs to down, say around course seeing which going and managing are controlled negative mitigate

environment, a a cost So inflationary take really managing to opportunities broad in the short, disciplined which add would in emphasize manner. despite beyond that I will out equation we price/mix still the

Kenneth Zener

very you Thank much.

Operator

call no are further this I time. management at There turn closing back questions over the for remarks. to

Marc Bitzer

questions. I all, you for of first to Again, thank all good questions. Yes. want your Very

As you've finished very strong QX. seen before, we a

feel in good are strong progress, about get pricing Latin to the very very margins good coupled we we not going We feel carried about year, and feel American America. the performance our with good We very North away. about

I lot to but think be on a full-year. confident you've remain all yet still on we turnaround seen track, needs that our done, actions are European

can to bit we more but little Investor with in of particular, really mid-term, forward many total. the a look New for So is that rightful I our our guidance questions in Day also mind, and by you talking long-term and hopefully your spend margin about in seeing time Company at the region about the what York,

a So with day. all and thank you that, you wish nice I very

Operator

Thank call. you. today's conference This concludes

You may now disconnect.

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.