Whirlpool (WHR) 22 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Roxanne Warner	Director of Investor Relations
Marc Bitzer	Chairman & Chief Executive Officer
Jim Peters	Chief Financial Officer
Michael Rehaut	JPMorgan
Sam Darkatsh	Raymond James
Susan Maklari	Goldman Sachs
Eric Bosshard	Cleveland Research
Mike Dahl	RBC Capital Markets
David MacGregor	Longbow Research
Ken Zener	KeyBanc Capital Markets
Curtis Nagle	Bank of America

Call transcript

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Operator

Good morning and welcome to the Whirlpool Corporation's First Quarter 2021 Earnings Conference 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, Roxanne Warner.

Roxanne Warner

Thank you, and welcome to our first quarter 2021 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 whirlpoolcorp.com. remarks a on presentation Investors Our

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

could results these from discussed materially many other periodic statements XX-K our latest differ and to reports. factors actual Our due in

may indicators We not operations. exclude believe these We includes non-GAAP also measures. they results of want to indicative as are be remind of important from you items business operations that that today’s presentation ongoing our measures our

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

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

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

Marc Bitzer

morning, and good everyone. Roxanne, Thanks,

discuss globe the X% the inflationary based countries in XX%. with availability. discuss we and ranging the dynamics these constraints, volatile first Before global steel swift cost announced quarter, our product like results, resin the rising thus amplified we semiconductors and and resins. margins to our significant In response first the in decisive primarily plan. industry Further, impacted price are rapidly pressures, moment we a and quarter to address with from take various actions supply responses We availability. I'd shortages our to business to existing and product across faced issues, increase necessary protect To

to year our to ongoing guidance by availability. constrained high our strongly place of margins. XX% results our reset operating model right earnings us chain our range component increase that to adjust These and share constantly we Additionally, production actions believe QX significantly $XX.XX. we give a based full confidence actions in on protect a propelled driven logic have to I to that per $XX.XX supply

our demand pricing Slide X. growth consumer announced highlights to We cost and sustained of turning delivered revenue previously driven XX% first by based Now strong actions. on quarter

of Additionally, record margins. consecutive free lower the ongoing third delivered million we flow EBIT as Further, and margin a strong of of of XX.X%, generated double-digit result quarter working $XXX cash positive earnings levels. capital we

long-term growth Lastly, we target debt of our successfully delivered Xx. on leverage

mix show XXX and benefits. Slide cost drivers expansion delivered to driven of margin our EBIT the by of X, basis reduced point margin. based Turning we first promotions pricing Price quarter announced previously

of Additionally, impact prior related impact by resin, we raw to material points in and margin the actions impact begin and unfavorable points. in of higher basis an to benefits cost particularly partially we year. compare cost inflation, basis resulting of net against improvement These margin from structural takeout carryover XXX as XXX steel a volumes the of were delivered COVID-XX offset

points. basis impacted now momentum marketing over XXX review margin long-term Jim currency in drive outstanding to turn on regional continue our we're we're technology Overall, throughout a devaluation in will continued investments to XXXX. results increased pleased positive by Lastly, this to delivering Latin our it and and America margins be confident very And to and commitment, combined EBIT I'll results.

Jim Peters

everyone. morning, good and Marc, Thanks,

results. XX% America consumer region. delivered demand X, first quarter regional we revenue I continued North review Slide In growth in strong driven by to will the Turning our

record by EBIT margin of growth the execution Additionally, driven another strong we flawless volume and actions. of our quarter delivered go-to-market

continue The our to modest agility fundamental in business region's results to chain continue supply we sequential of outstanding model. strength optimize our gains. Lastly, the resulting demonstrate operations, share and

Strong region. for Slide our our drove region. revenue and review demand and the key a in I'll third in X, results double-digit quarter quarter first consecutive growth Middle gains of to share Turning Africa Europe, countries East

of year-over-year $XX by our delivered demonstrate EBIT revenue ongoing increased region again the effectiveness million strategic Additionally, takeout. and led actions. the of improvement These strong results cost

will sales our offsetting Slide X.X% continued strong to XX%, devaluation. the region Latin demand early margins our led cost and I results demand first very Mexico. with and of significant quarter of XX, XX% currency with growth region. America impact based increased by currency pricing Brazil actions strong for across review Turning delivered excluding EBIT strong revenue Net of The

across share sales Slide demand to Asia for XX, China. results review region. led region year-over-year I'll our Asia, first growth in our and gains Turning strong quarter net In the by delivered we

Additionally, we delivered continued China significant cost and go-to-market by led EBIT actions. and expansion across both India productivity

in as remains to surge uncertainty India. COVID-XX cases continue However,

Turning to full XXXX will to discuss XX, it Marc now guidance. year our will I Slide and begin. I Marc turn over revised to

Marc Bitzer

Jim. Thanks,

impact strong So sustained that environment will while the the uncertain, previously macroeconomic demand are of announced input rising constraints supply remains actions global consumer confident and offset cost costs. our based pricing we and

are for margin growth sales from EBIT approximately to X% now now and We XX%, guidance raising X% XX%. our to net from

earnings billion billion. deliver addition, of of free instead we now flow expect $X with to higher cash In approximately $X.XX

also guidance XX%. significantly increase our $XX.XX year-over-year to EPS raising to of a we're Finally, $XX.XX,

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

cost the basis we by previously in benefits XXX of to capture as driven our pricing price go-to-market disciplined mix, strategy our and continue expect points based announced of actions. We be expansion margin

resins to about steel program billion. cost our we basis carryover The impact as continue We business of particular, global the stakeout material will to benefits XXX ongoing by cost reduction inflation, points negatively $X favorably cost realize forecast margins initiative. costs XXXX and impact our in by and net in

technology XX our this the investments to expected confident track currency ability are quarter. Overall, cost EBIT and deliver unfavorable Latin expect in by in based approximately we're each. third America, Increased uncertain in primarily in environment peak our XX% on record, impact to navigate points marketing to margins increases We and and basis margin.

our highlight Jim regional to to margin industry over it and turn expectations. EBIT I'll Now

Jim Peters

Thanks, Marc.

EBIT year. the XX, and guidance updated Slide for Turning to we show industry regional our

global the our increased X%, to reflecting slightly have strength expectations industry North demand in America. We

the regions the for of continued and plus have XX.X% updated America pricing benefits to our actions strength. North EBIT to guidance reflect Latin Latin North brings America approximately We guidance EBIT and This America and of our to X%. demand America

partial offer Lastly, its Galanz Whirlpool stake for majority March China. launched tender formal in in

Our $XX of from would in EBIT China This months guidance EBIT EBIT Based Whirlpool for approximately Asia assumes is quarter. X the Galanz's offer to partial closed approximately region's loss. tender in we $XXX successfully see and million results. and approximately net of this revenue removed the sales second assumption, million is on expect

business, of Asia's EBIT in deconsolidation to an India our Whirlpool increase the X% of we With anticipate and China business margin plus. continuation profitable

and $XXX Turning the our million. discuss EBIT bottlenecks throughout stronger year and cash levels flow. From increased XXXX low XX, inventory With record our guidance the by our a will working in to Slide unlike we we build perspective, for earnings line compare in drivers against supply growth expectations capital top margins, we improved expect cash to as we see of XXXX, free chain.

of portfolio. expect long-term expect sales X.X% we of optimization to to million majority Lastly, the drive of cash the our Whirlpool flow we of now in line or in real $XXX our in now from continued approximately goal our X%. estate Overall, China, with sale of a shares free addition billion $X.XX of

on Turning capital allocation provide priorities for our update XXXX. to Slide XX, we an

development, our in $X in to and innovation future. expect billion to expenditures highlighting capital research invest to and over commitment continue driving the We and growth

share Additionally, clear program have with remaining for $X.X by we shareholders, to on returning levels Also, dividend to strong billion. buyback a year. increased cash our increased the focus consecutive billion, our of our $X bringing we ninth authorization

delivered our goal leverage have long-term debt we of Xx. on gross Lastly,

Now turn it messages. on Slide over I'll summarize to key Marc XX, our back to

Marc Bitzer

past over what Thanks, you minutes. Jim, just and few me let recap heard the

revenue, deliver ability challenging take right and in strong per demonstrated believe and results. the I conditions. cost our free confident the our earnings environment. to highly we mix is be in inflationary through consistently record increased flow. and place our actions constraint to in guidance for demonstrated our operating are results despite decisive which have significantly With firmly EBIT, agile, operating our actions QX manage we again protect market share once expectations, that We demand We’ve increased ability price to cash supply and margins,

in unwavering and cash shareholders. value strong shareholder to to remain return commitment we Lastly, drive our

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

Operator

[Operator from first Michael comes question Instructions] Rehaut Your from JPMorgan.

Your line is open.

Michael Rehaut

Good everyone congrats results. Thanks. on the morning, and

Marc Bitzer

Michael. lot, a Thanks

Michael Rehaut

a mix grew you could talk in you that But fact was excess market. the mean, obviously there's maybe volume a hoping obviously was talked allowing modest I you share had were improvements North the progress, First the about driving real and some on supply I to appears in perspective, I around gains. question component. that results price chain it of think, I for touch top from line impressive continued those a American the

industry now, So about talk And weeks, able right And think growth, an excess how maybe I quarter, you're the backlog, and number how number about growth. one, you X, that's of out -- say, that if progress able were by, if if fairly any given continued to extraordinary now still year if supply you X you your shipment if you of the and volume at about the was the match growth, challenges pushed chain you the that, think at backlog your a were to can elevated. thinking two, there. remains were end some roughly, make area this the AHAM in share let's

Marc Bitzer

Michael, it's Marc.

questions. try to me of your both let So answer

line, top growth we're and obviously, right pleased better narrow certainly XX% QX in than very, the very much run the and on QX rate, First, is it with QX.

QX. gained we be So moderate we To two have parameters, momentum. right we versus i.e., clear the share sequential, feel QX on

we to not However, have basis, on clear. gained just a year-over-year share, be

volumes We also component in why the unit of will healthy we show mix. for that with reason there's underlying we what there's growth. roughly But price said -- It's provide offer Having a also corporation. line there's XX%, don't a anymore.

part Now, TX with why stopped to reason the of communicating AHAM and volume. TX the was comparison or we AHAM

from into. are a about about both now that, in all, as we you in about volume we the quite of very year pretty on of where AHAM it's full a always bit said even know, noise sustain question right TX, two can growth confident base. revenue. a there's the to get market complicated numbers, good rate the and feel QX the TX, days, we're calendar run on relative to a And that we which Having is And TX. First

question of excess part second backlog. the the to on Now the

I we That's We're heard if the think are the resolving you answer. one you simple were from correctly, quarter I away backlog? not. saying

on we you that more me obviously and January. let this a think we X of bring to were do had track Now which perspective backlog of that felt or around yes, we're November earnings have weeks our last one. its year, X absolutely give then we qualified January peak waiting our quite because to And pretty for much In much October, slowly I that's referring want why started towards call, consumers we kind to really a down on moderate product. to bit, order

So things industry in grew. refer is shipments. or full when three stay on things. consumer One year in the numbers, And a to updated since, also industry. demand Keeping these happen it full did we that's are these expectation why actually actually year not certain strong, our constrained two we only mind industry way

think I will which well guide consumer X% be we unconstraint the right above demand now. the

or mitigating of semiconductor these which sourcing like because was by, strategy, the semiconductor hedge, the events can't QX, So storm, were the so. down one for it you bit impact any fire, actually a Texas chain. two petrochemical headache resins effects. factories different big a unfortunately you which largely Two, production have Two, major and our was supply chain, winter demand in we which one storm, Japan a slow winter our also the because which the I been And issue again, it also and which have, us. that little know have supply And already and escape on nature you QX, has got But didn't means amplified important there's the a, impacts major you subsequently of a part forever. you had of stronger. shortage of in Texas unfortunately we had two what industries for

what -- put plus time similar orders, a constrained expect it COVID a strong it. like now, on the consumer elevated I constrained a into right should looks elevated chain QX, right So forecast we we assume on And to this come. it's will difficult to plus for admittedly, now translates And very will one. QX would demand, it's and stress ultimately remain But be that see QX, right now some back residents you unfortunately, some semiconductors system. on against supply the should it moderation levels.

was on that in probably these answer, moving you helpful I a supply the long a bit all So perspective to but chain. parts give little think more it's

Operator

Darkatsh James. question from your from Sam come will next And Raymond

is line open. Your

Sam Darkatsh

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

Marc Bitzer

Very good. morning, Good Sam.

Jim Peters

Good morning, Sam.

Sam Darkatsh

the raw raws, questions regarding inflation material Two the actually guidance.

your don't all here have as commodities, The times. you, first ask are right on April, still just -- I'm industry would you And second versus what times lead would in the between be was the would remain RMI RMI the envision a I obviously about X.X then fiscal normally How but this spread price spread thinking RMI, QX and if points, and times would now. terrific I spread you the think these not question, first obviously difference that -- prices from in you extended. looks quarter, 'XX to as and would fiscal were continue. are obviously question, had you terrific 'XX are flat lead guess that and and a static X.XX%. what that do are what What X.XX% like QX normal to in perpetuity now? it

Just a you. Thank could. of how us if those two can metrics, give you you sense envision you

Marc Bitzer

It's morning. good Marc. Sam,

difference because Let and so the offer also raw me associated increases first uncertainties 'XX dynamics absolute raw with environment a the let honest seem also, can me then Jim with materials that be you much of that. first And his perspective of and But don't all, to start levels perspective. unfold. in on to maybe maybe emphasizing raw very the there's out year-over-year. materials big on of I how current is give our materials, far between start at

which QX increases we'll year-over-year, seem probably QX. The what refer we absolute still be moderation, in then And continued to from of we likely significantly however, in raw increases will a and largely QX that's level increase Also, a start there to I when will costs, on level moderating down. I So expect do and strong the of think peak increased. mean in material a increase also scenario. QX, right absolute on now. increases right we in will peaking, -- XX materials. hope appreciate best further that's our terms Again, has the 'XX. there's environment moderating But And think still I slightly, again, carry But now a being but don't a into I changed and stable of level. QX probably in increased, last in the QX world raw high Sam, very dramatically weeks, we're

Jim Peters

with we align see. on would pattern kind I the that Sam, And that's Yes. Marc of

number. right So that materials if think you will year-over-year, it obviously a part big in about of the cost we're the now seeing be inflation

what And a a why can't but this we, period so towards that's for And as guidance we will think look time. material remain give least do we higher we we any environment point, nor at price full on really would shown, of XXXX, at first from for you then of your guidance given QX listen, we we see aligns an question the the year. spread to quarter with overall -- the from the QX, perspective as kind on we've what mix

are says a lower it to and talked through, Marc the bit you go materials seasonality little what is, about. but still as that that's So

the flat be environment believe that's As offset we that promotional coming expect will the we year, and benefit, pricing will And but mix a throughout why hold bigger to we be down as price headwind be driver other. on more we'll of price that is a take go throughout two year. reduced each the of mix the year-over-year materials the a versus the that now a but

Marc Bitzer

of where note price I again. which assuming of everything. the Marc think core offset actually, can is your read I say, also, And the this morning it's you Sam, headline RMI,

assuming, that's so differentiation QX, full Again, will [indiscernible] been in we negative we RMI I points of have will. material points the X to we as opposed we and X And little and make forward. and a is, pricing. to in do offsetting going price I it's base year saying would think guided on why a

Operator

Goldman from Susan come from will next question Your Maklari Sachs.

Your line is open.

Susan Maklari

the And the Good just you. going of I can that. we there's point, you quarter. lot a inflation us end since the changed know heard of My you morning. work from back a quarter. is on first a to bit talk also great about Thank fourth what little at going hard question congratulations to into

from $XXX You million $X going $XXX up took to big billion. to a the the step million

there? how this that guide Just $X talk as also, us us How now? should the through through we in what's then given we that you've possibility changes you further And confident different think about are year? we move billion get the

Jim Peters

and about the the seen what's think we've as especially to few next issues around a some prices oil that rising about prices. increase chain the you resin seen you'll and space also. higher the of within many we've supply this Susan, kind causing confidence, is hear what and based that which now, we -- to our What a storms inflate that as resins now, in some rate was what at all first and we at say that, there the of first And or within best also what right your information obviously, on in of this is talked cost earlier, caused caused steel they've Texas our lack expect Marc a in we've your question, looking seen in. leads the And wouldn't we least back and And let Yes. of start Jim. within forward January updated terms see something best have. we'd I'll your the off I has till but that, now, from on see that of things think add but estimate the our of producers also talking weeks, is question is second about here, over Marc out to quarter significant

And that have biggest we about that. then resins all think components So of probably the may are steel the you and contain pieces drivers. two

So know, pretty throughout broad it's supply our you based portfolio.

Marc Bitzer

biggest is Yes, dramatic purchase what direct you are steel is look as and resin, X mean, to weeks Take of. saying, last levels up relate seen components has echo increase. in Susan, steel you unheard at our they two spot to a America, and the $X,XXX. just prices, These Jim just if the I know Steel, North okay? went

not do we shaped forever. trends Now, we but ultimately spot, contracts way up, the are buy can't spot escape our at

of which coming biggest reflection is see is you don't prices. and ultimately, so lead certainly one. two, our constraints And prices something this these to resin around they a higher out of Texas, And buy, obviously oil also second lower a,

So cascading put plus strategic for two the buy because together, our or steel etcetera. to have these subsequent then which on components, it impact pay has suppliers we also

that So to together led fairly you dramatic change. that all a put

regards with characterize right the Now as this that confidence estimate question or now characterize to it only I your point. very I about at our can wouldn't optimistic. extremely best level, pessimistic is

current I this now, which of $X world, last weeks. I think But it's right it's it's believe number saw mean, living well-balanced. a is always do to billion -- the the uncertainty. fair I year. assume mean, X I we're for in there's about course, we the a right But that

Operator

next Bosshard Your Cleveland question will come from Eric Research. from

Your line open is

Eric Bosshard

morning. Good

Marc Bitzer

morning, Good Eric.

Eric Bosshard

there, in seems not I'm increases like when peak like but is A little I to more each slope what promotion, interested could. the of benefit mix that's it Price clarity put of the like I'm began them looks price seems front you a curve all But North sense the what XQ bucket. you of of those American of in specifically of of us. sure in just get a and and it arrives if bit of know trying in the

larger that if could some through in little But quarter, just basis And first bucket in we the can about there's that than year. so you would Perhaps XXX work it little be those change the surprised I a the promotions feels that through expand like a that as three this the within contributors bit helpful. on assumption point in a get was year. assumptions

Marc Bitzer

always promotion, we breaking typically mix. Marc. much it's how how And all not of a Eric, combination three factors. is is much SKU much And as know, are it's and of you price/mix down it's really list how

And would this and crisis I from say positive -- got the X QX, reduction months of three pricing, out where of we mix, quarters that last got coming had at immediate in more more significant strong look the you also frankly, of mix both benefits. because If promotion the came we we investments.

getting of frankly, increasingly in QX, with already in price still But in promotion. now effect quite augmented reduction we which have increases, some effect that think bit the a of I have QX, markets. you of

where we benefit. of just will already go QX, doesn't that Now an with back coming you It effect. you less promotion, and we promotion mean have to slowed course, year, positive last year-over-year down don't have additional QX,

of that's increases when you into much more list impact will you QX, year. throughout As see go QX, price the

Eric Bosshard

for getting that promotions. you not but of where to what probably promotional might plans? where going the is on related what the the half just some that of back was like it then they what the and And Can plans? to back you reference are that billed year are the there's where year with Where last plans are What relative are look were, perspective Xth was sense, July and a it historically? -- going your retailer's give to

Marc Bitzer

future on we Eric perspective or give promotion. guidance as you a know, future don't a pricing

strongly on -- value, in had a earlier value this we two just, made is create a I would we comments the about When promotion we chain, was can coming don't. promote creation. We've the you which the which comment. as chain general, in make strategy, multiple promote. make be one can't products with It doesn't sense don't, supply which constrained. Michael now back our to produce. And to terms which think supply to will I Coupled years things for based we I

the we I an period. extended right supply plans plans. And aggressive think So think don't now, we're assuming always now, for very change. But we're such, as I time will have promotion again, constrained

Operator

next your Capital And from will question from come Markets. Mike RBC Dahl

open. is line Your

Mike Dahl

XXX logistics, to as thinking of lot net one point you've expectation a in around seen for net color the really My question so But for thanks and on basis about we've maintained inflation. provide well, of obviously is pieces cost Jim, costs. another transportation moving logistics far, tailwind, Marc, your helpful. terms

of underneath can cost find talk were to you able were productivity the incremental through changes additional you kind surface, offset there that that. So to or

of commentary you sort any there be Just quantitative could would Thanks. qualitative provide or great.

Jim Peters

is kind maybe with say we're I'll here logistics that this I we to you there. and is what like already And of Jim. do this many costs, start manufacturers increased and kind other think using of out Mike, Yes. see alluded

to advantage And different we've been buckets within cost, -- there. of However, P&L. also able take of other obviously opportunities within our a that certain bunch know areas is net whole cost you

level as And we revenue last very in we're the previously. we right is so, we the volumes benefit at of you able we we or year actions the retain, carryover saw look healthy, as to that cost now, the took at look that production is level amount and the above that say additionally, at see And today. our that obviously, what with are would of

-- is the environment. things which are is a of that a those So, kinds to using cost we're what logistics offset higher

Mike Dahl

Got it. Thanks.

Operator

your question come from Longbow from MacGregor Research. will David And next

open. is Your line

David MacGregor

of of a longer the on should progress not I Yes. ask lot I How and these guess, Good of to all terms progress with think and margin through a be margin of kind and margins, congratulations we steady my and normalized forward channel American for just visibility, here growing accomplish on American state for all trying North cost I the first everything to in and business. everything what's wanted issues. North about step term in to American question a little execution. but guess, steady a really sort It's else. supply moving about bit of parts normalized with thinking lot able morning, terms in your everyone about North business. think you'd and outs latest the impressive of kudos back with a just the state a And navigating

Marc Bitzer

years, X hit David, if back couple record new and a a that it its the in step stated question North were asked team push we last is our whenever has has peak. we Marc. and also pretty can demonstrated of in further. or margin mean, impressively about I little last years been And America that think I X America the we time bit North we for

the XX.X So be -- now to plus. demos I let increase time. demonstrate plus can guidance much margin team work And full the the we year how over and think

can -- guidance. have time state encouraged North expect which us to perspective Investor that next be your passes, guidance have in think be moving say with when you North with America. differently about margin to as long-term will has what meeting, steady it announce objective a what And then in margin of, years would we of a margins we long-term lot and America. certainly will steady of I I will will the would as said, the the parts for elements, big obviously, couple then we last state appropriate a progress give redefine is our But Now, of really

Jim Peters

in David, and our significant had have stayed loss XX% to to too, And think I just still would thing XXXX, that seen like there. you add above I that America we folks volume QX one to North is highlight that, a with for in margins the in

So that think can there to forward, healthy deal be point, now a of very to as volatility that the to contributor. other I we significant And Marc's business we the a we areas. with continue have in and volume expect many look shifts

David MacGregor

what of the listings a may progress light. seemed the the the just is and achieve the been just price over in incremental in and talk traction, thought Okay, little But to direction. are about recently you margins for increased some moving good. there And second margins terms overall, you new And forth. regard with and have certainly able so can me of on so I directionally, Europe. to right question

some you about elements talk can the there? your So progress just of of

Marc Bitzer

Yes.

but X.X%, a improvement. first year-over-year it years, -- is honest, profit level in Latin for the year-over-year be a seasonally profit we which line Europe. progress. with Keeping a nice last We Europe America, profit in what in perfectly showed made mind of in turnaround all Admittedly, that's QX America, for as over QX really in now. to mean, QX, make I the mind, impressive in had really it's the not and we a a all, guided Also, North same David, So, in X didn't it's again, we year, plan. is as our weakest quarter this

know demonstrates not driven, we had the is line not target. largely that mind that’s final good for it's also yes, plan. disciplined costs. turnaround exactly with Now, state, all That the in But our what is in end team we European the

also face in several almost the the got regaining America, but nice are same in not in We North key frankly, we it's as inflation the market exactly same. countries share And Europe progress we same in QX. magnitude, cost in maybe

Now, very but think market against strong we has even I been QX, grew the also market market, European share. strong in the

had always in bit but business we where in past, to is in regain around the years nice already Europe, we I -- need of to where repeatedly said I As of the kitchen continue really think progress to impressive progress QX a some biggest on business. longer market the share, couple next demonstrate building throughout takes element it wins the of the kitchen the

Operator

Ken from And question from Zener come your next will KeyBanc.

open. is line Your

Ken Zener

everybody. Good morning,

Marc Bitzer

Ken. Good morning,

Jim Peters

Ken. morning, Good

Ken Zener

Just North a lot America, there. hard work your margins amazing, in of so

freezer the this mono-brand. strong are AHAM, particular seeing things -- I America sales categories? versus of with have one we parsing more out of are but very the And know, pricing with your North backlog five You mean your supporting you up, things discussed like in clients persisting net you Are functions in in haven't they Could products, had brands some XX, their equity competitors been or in dramatic that still I outside, equity and U.S., levels with some just near of i.e., freezers business? that house? there as record a opposed Are translating on in home give to the you spending little types that. first I feel my mix XX your That's is shift mean in year us higher more? homeowners how to really having other question. is demand a I

Marc Bitzer

it's Ken, Marc. Hey,

So try answer. to let me

a of mix of QX QX of product, extend and at last in broader of demand, maybe we of and First fundamental mix of seeing. which we're comment product on year, saw all, The our course, then in the lot on okay? COVID products, nature home people into some are washer mix microwave, and down. broke continues mix in a product replacement income because our upgrading versus and emergency investing. shifted to small are disposable the investing people shift richer gradually or fridge, That the The has i.e., of toward a

next So in you the it's home. right The broader in to referring make investment the people out is I not the really if adequately buy well, don't structural the purchase get on think buy fixed what describes quote-unquote. adequate you you year, forward. asking appliance, want a implies to going And the thing of is demand amount see. see forward what's don't comment, past, It's were Frankly, a pull now in good a that's some I us not description. is pull year. years to pull That this forward because in COVID anymore, there you an

perspective mileage, so in year consumption. home, consumer from the terms how more cycles in much think think spending many you appliances, was need we in of use, what much out literally I higher, time how consumption appliance. with the people showed much And last get how to

So much at people what time happened so higher. and consumption what spending happens is year, the home, this last appliance the year

lot we time. pull expect, So drives demand an continue some quite for forward, use, accelerated also it's it's not and which a a of which

Ken Zener

that tailwind, clear, normalize, FY'XX domestically we you guidance sub-XX, margins I well. that did really is like helped Do last tried capacity what's where but in think at the in well in is or by in will that remains something home, margins promotional that return XX mean, uncertain. yourself terms as interesting really half happened any activity already because you are reason It's promotional seems that Right. But actions year's said, we're fixing I past. up that numbers really the given in comping is categories? it something the very which in in -- cost think, next the that's it draining in your or activity my you've quickly, there opinion the like competitors good. wouldn't into Is numbers. months a And wasn't last dishwasher, rather your something second year's reset seems it XXXX are I of added been It domestic in

Marc Bitzer

home. North the start going blip. other it's demand. days the investing consumer of similar general the is I'm So on home, but trend, will It's the can and regions. a a maybe particular, and in to it's seeing for demand What not And in We let more spend believe sustained demand in multi-year people a first me America, at up particularly strong -- referring right forward cycle. do America, also we're not now have is North trend you

in spend policies, about of think home. people with not higher at people couple which A flexible if think the age will market golden time will refer some years at the of and work the in to accelerated Housing demand home, of which will down ultimately use in housing. drives I next the of that U.S., Just the appliance investment home these all slow increase. housing all more couple

will before, in you And demand, you demand America. consumer trends call have been year most earnings probably North I've talk is mid multi-year by in the to obvious, heard be together, bullish demand consumer us long-term about that put U.S.. doing and So honest, strong about consumer and

I repeat not can consumer I'm a worried I'm I promotional demand. So environment. before. what said about only

on heard supply unchanged, and are everything before a competitors not We from will side. can't policy assume comment our right have owned we very our in aggressive is environment, policy speculation, our And promotion pure should but that doing. you've us you be from now I constrained what that's

Jim Peters

that just is strategy that make obviously, creating see has we sure out our and And said that changed. what to don't promotions a on mentioned step you to here changing And forward. echo their bit little not going to Marc value

to as we we're gotten And about just we've with forward -- in price better. at The exactly over deal what go them whether the of has other kinds different thing increases if is, you taken dynamics think XXXX can't can these based now. and that see recent XXXX, and cost it in actions took you as think I we things was taking you why that years our look predict and these them, years offset future and ability talked earlier whether about

demonstration to to maintain adjust and ability the just think still margins. our continued and I around environment of a expand us that's our

Operator

Curtis from Nagle come will of Bank question next from America. your And

is Your line open.

Curtis Nagle

shifted question. -- obviously, people my of the terms Thinking Maybe online. any I'll behavior lot kind just terms little how behavior, some kind taking in of of for in COVID of Thanks bit have about talked guess, buy a more about I pivot appliances Great. the stuff changes yet. a generally we haven't just

terms the I Lowe's, per ago think store, maybe the it’s of sort there. while buying in people or over to years past has a is of is, are purely journey and the that changed number Depot, for now, online, it's the buying visit don't you goes that appliances relative from how the now that who But a store do of where couple just whether , se of to been online, percentage kind year so? whatever think and of goes? What goes

Marc Bitzer

Yes. Curtis, it's Marc.

U.K almost the country perspective online, some in are U.S a around of last Obviously, terms different countries reaching XX%, online are obviously XX%. consumer versus buying in by like was okay? it's purely have You year So XX%, more been on has you already China, have multiyear vastly trends the increase. where country,

so increased, a simply less Now of of QX, transaction significantly say, countries. markets. is in our and pure And online retailers in a the And because other pre-buy that's between QX, online much anyhow online to every reflection been remained has to big at course, and many in because also purchase not open, particular, clarify, I kind in U.S., but pure than which has same the mix would goes difference the pretty there consumers pre-information.

little a pre-COVID not entirely. I levels? say to would So, I bit think, will that settle back

but in terms broad percentage you buy structural how will point of I would is purely people online. -- change think many a COVID just

So COVID next may it's going of not in see the -- not to peak in pre-COVID. we certainly online sales back but go will over a the terms forward mid-term,

the this transaction already XX% year. but not I the So you of again, the one U.S., -- and of if ballpark this in to in online I not dust be would pure surprised think see online settled, XX% coming out has

Curtis Nagle

Thanks good much, luck Okay. and Marc, the for rest of year. very the

Marc Bitzer

Okay.

Jim Peters

Thank you.

Marc Bitzer

Thanks, Curtis.

marks pretty of much I questions. So the end think, that our

me $XX.XX these $X.XX, you let close we repeat just I'm as of to you midpoint the you that keep repeat when maybe because our going more short to and confidence said. you you saw close actually calls pretty from kinds So, everything usually increased than and before guidance here part, $X.XX.

confident. you're do not don't that if You

actually real, want employees a hope bit -- and adequately little with We to rather here use the you this color. so. to we oxygen hour last ran are and our is out I always normal hospital about. down our I real. to we To throughout We but of confident, or we the we shut industrial to COVID Manaus, are because world. in I just give expressed And factory these our close with we thank which have that of we to talked know, from -- expect top challenges, is and very it committing now we very beyond have employees. on and because woods local had a delivering in U.S where picture lot it's of extraordinary. you out the is But a the are on little employees COVID what is have slowly, constraints that, I real right the give bit still What is mean oxygen. they give still getting a

have being employees COVID We hit fully we India. and have India in the by several wave thousand

have of who've in -- We April positively month got the colleagues XXX diagnosed.

pain real, employees. is it our for that lot of a lot and anxiety of and So very means

what constraints. we and easily amount puts time, hard so on to casually It's organization. an and that supply of same express what chain describe the stress as at While

put is I organization extraordinary Bye. guess the being and -- to our And tell here, Thank I our and I you, marks do recognize end delivering, Q&A. the one it's sitting into I'm thanks. just that my just employees, lost. express want everybody. want So efforts our certainly and We not of I to this

Operator

Thank you conclude This will conference everyone. today’s call.

may You disconnect. now

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