Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to Whirlpool Corporation's Second Quarter 2023 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, Korey Thomas.

Korey Thomas

Thank you, and welcome to our second quarter 2023 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 in presentation Investors Our

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

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

the remind non-GAAP on they want not to our you We of measures Slide operations. results a in also presentation of the indicative our that be measures We includes exclude these ongoing detail outlined further X indicators may are business presentation. believe today's of from items important they as operations

baseline are reconciliation trends operations. items Relations for ongoing most business We the to posted website directed our for analyzing the of provide think also adjusted better measures in Listeners the supplemental of our Investor will directly in measures. non-GAAP information the section comparable package GAAP the a you to with

this a all listen-only mode. participants At are in time,

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

that ask As we ask questions. participants a two no more reminder, than

With turn that, Marc. the call over I'll to

Marc Bitzer

and everyone. good Korey, morning, Thanks,

we will which on sequential in noted you earnings post our full a our towards solid track As quarter another puts of improvement, release, was have it firmly and did quarter us guidance. year

do. our strong market did global demand, macro In is It The meaningful and performance, not to We improvement. product and we that would execution get told did innovations this we we cost environment. expected. we demand a drove drove but at improved help our able If consumer that was this look priorities our operational of from reductions, of short, consistent we we what you improved we a drivers chain, the our you was achieve disciplined supply exactly lot what share. instead frankly, industry gained down, of were

industry a U.S. our disproportionately, purchases. consumer half Even not discretionary we of towards demand will early, of us the which are sentiment though leaving market, XXXX, see we starting we still strengthening are looking second housing towards more pointing broader is yet signs to and cautious outlook are but As benefit unchanged. clear but

the We stabilized pre-pandemic improved environment, in. operating which to can environment we conditions that and seeing similar levels. is we create and essentially with a successfully also inventories, supply Frankly, an environment return is chains, to demonstrated pre-pandemic have are operate this promotional value

chains first quarter inventories low, historically Slide very half X, shift with promotions historically The overview inflation were saw second of is industry key and absent we the provide to second in world countries. unprecedented our today a different of Turning at half global XXXX, were levels. from I in In demand was an XXXX, declines results. of where are operating will we supply fragile, were largely

We trend continue in declines the the half experience mid-single to with first demand this into global of digits. XXXX,

quarter and year-over-year share first The expansion and ongoing revenue target full $XXX supply Second strong strong the and a quarter, takeout per our our of to year QX, strong delivered on quarter gain operating a second In basis represents $X.XX, million line of This versus million of $XXX million $XXX we cost to momentum impacting takeout, XXX points the are and actions. cost mix. improved gains the expectations. X% for actions lineup. with earnings share of from benefit, These in driven strong delivered pre-pandemic in track expectations. at delivered Yet, continue margin of by year-over-year year-over-year with chains negatively levels, year, line landscape promotional X.X%. with is in price product prior we normalizing to Americas declined our

X, to second our margin. on share EBIT quarter details Slide more I will turning Now

half second normalization year-over-year impact by impacted in a points. XX trends. the are now with XXXX Sequentially, points of price/mix of unfavorably was quarter basis by impacted historical second basis negatively promotions, reemerged margins and XXX The seasonal following of which

Our marketing Overall, strong delivering are second delivered both and cost takeout negatively EBIT actions expected, technology ongoing And XXX our margins. we of impacted currency pleased foreign with year-over-year. basis quarter X.X%. sequentially points, and performance, margin as

to to parts additional XX% improved transportation million $XXX parts can approximately the see cost since X, of $XXX by fewer million XXXX, and we chain supply takeout reduced of rates material cost reduce $XXX raw freight takeout reduced actions, costs. Turning and benefits, cost million driven complexity enhanced resiliency, to year-over-year and Slide $XXX of are you to $XXX including million track on deliver of million premium

Additionally, reduced aggregate, indirect discretionary X% we spending costs. with disciplined remain and have other by in our workforce salaried and

over quarters, past delivering the track took cost takeout are actions we our fully towards on we With cost targets.

not shows actions. by and note XXXX, the chart baseline cost reduction high to this in entirely driven the it QX, require While cost new in is additional will important year-over-year QX takeout that the second of is and half effects

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

Jim Peters

morning, Good everyone. Marc. Thanks,

actions decline. of sequential alongside the Turning InSinkErator. X% was continue offset resulting of EBIT to of revenue for and than to the increased by region America review double-digit region. InSinkErator more The gains margin delivered addition share expansion margins XX.X%, as decline in our industry strong XX, cost Slide and promotions, North I'll results integration gain X% our solid with Year-over-year takeout of traction

XXX-plus basis takeout region cost deliver We point actions. the margin expect quarter, expansion each strong to driven

our expect results, America strong and are our confident structural with to actions North the continue strength XX% deliver to margins. business EBIT XX% the of year to exiting We in

housing Turning to Slide XX, I'll around U.S. provide additional color the market.

currently and the we very market. on optimistic in and October Nothing view trends, changed, call of presented we XX% mid- our industry During about housing-driven representing long-term our total demand has housing are U.S. upbeat long-term XXXX, the of earnings demand.

lagged construction decade. a has New housing averages than significantly more for historical

XXXX level, of in housing. the the the perspective, U.S. history. XXXX million was XX under Great fewer to Much one between and new housing to supply we For below built. in the in In stock period X X only million this country's which than total, prior there were oldest estimate Recession the to years year million was X,X homes unit of leading

starts to While higher not housing supply reach million this near annually gap believe to the will to do do or fill expect in we units state the begin steady shortage. X.X to of starts to term, a we due housing increase housing

region, multiple Turning the two, to including strong and Slide one, we capture well positioned positions that XX% billion XX, the Whirlpool to drive not Whirlpool, brand with as rebounds, full that the one targets number of are value across this number have combination Maytag, portfolio consumers; new of builders. a national the builders. become you appliances. and final XX of serving the housing is surprising creation The to for can suite every brands, as top five product capabilities It an the see strongly mile the home new of: one trend innovative delivery having eight for market portfolio we with choice U.S. home our KitchenAid; $X best three, typically choice homebuilders,

XX, quarter due strong takeout year. actions, industry which sale expected countries. closes, was QX to expansion to until Middle each and Europe, Organic in is Slide cost alongside will I'll the benefits continued was down second continue by reduced accounting transaction for of across depreciation that driven EMEA held quarter our weakness driven results review for by key margin revenue XX%, our demand Turning East approximately region. Africa this

margins Latin for EBIT in resulting the saw resulting share volumes, X% demand Turning by to were Mexico of America higher Inflationary pressures year-over-year revenue The our region. in solid Slide in and I'll XX, gains, review a region results offset increase. improvement partially X.X%.

to Turning XX, Asia I'll Slide results for our review region.

X%, margins driven by our Sequential the first Excluding cost weakness. the share strong X.X%, XX% with approximately impact price/mix. compared revenue by EBIT delivered takeout declined increase quarter. region consumer actions revenue drove of offset of a gains The negative currency, demand to

Turning to guidance. I XX, full our will year Slide discuss

cash range are $XX, our guidance approximately $XX of million. We $XXX free ongoing reaffirming of flow to EPS and

to deliver expect increased expect margins the XX% reset. now deliver approximately anticipated. our of cost greater to our been earnings second continue as structure demand the and driven We EMEA in X.XX%, promotional to in full of slightly spend of has year than by weakness year, half EBIT has We

guidance year. to for effective Our for expectations XX% tax rate, includes the adjusted also our updated now XX%

tax progresses, will be As the which of the low our at end we Europe the has rate, to range. potential continue the adjusted assess to transaction

to expect continue We free cash deliver to flow. $XXX million of

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

All to unchanged. other a X.XX% We margin updated deliver impact, points levels. remain have our environment solid expectation price/mix XX a by of basis point drivers negative basis expect pre-pandemic the at margins for year. global to now We promotional of XXX reflecting

to year regional no see regional XX, change expectations. our we We Turning show guidance. to full our Slide industry

retailer by levels. sellout our were low-single driven consumer Therefore, stable shipments industry market rebound, retailer while digit America decline. with macro expectation, there demand in be North the assumptions by in largely uncertainty. And higher quarter some slightly the might relatively housing unchanged. consumer and second this The prior by was are driven be continues versus favorable inventory slightly consumer our impacted to region sentiment was a While restocking uptick

continued expansion, takeout with the normal levels. America, raw strong promotional environment full our pre-pandemic In is Overall, to cost a margin takeout partially we cost XX.X%, year of we deliver EBIT North that approximately region's expect as margins tailwinds. inflation expect by material actions offsetting driven actions well as strong at

lineup environment of with of by to positive approximately We product margins, introductions, consumer new share expect be We delivering impacted to strong soft mix, partially driven X.X% gains. sentiment. EMEA region impact now offset a promotional the year-over-year by as to deliver the expect continues the

America Latin for expectations Asia margin EBIT remain unchanged. Lastly, and

over to I Now, Marc. call turn the will

Marc Bitzer

Thanks, Jim.

to small several foundation me our company we've historic which a of company with double-digit on profile. XX, In higher-margin our changing a Whirlpool very today structural on based EBIT higher from profile, let portfolio an Slide and steps taken transformation. last margin pillars: very to appliances, growth, is a different mid- the labor our years, with business past. significant the five steps to Turning from commercial company different Whirlpool provide into update appliances, is the transform portfolio major three in digit appliances, high-single for

in we operating after structure segment are potential completion the we As look Europe forward, a of our change of anticipation transaction. reassessing

our During appliance our re-segmentation, specifically business. our share we domestic to more small earning future calls, expect about value-creating one strong and assessment of about information potential

they're Turning I an XX, our to InSinkErator strengthening how portfolio. provide Slide and update will on

completion launch InSinkErator rich InSinkErator's during after and presented well earnings NextGen, are and was I acquiring efforts call. the nearing brand's in which integration legacy, excited history about XXXX. QX strong our very last underway product we Our largest

to We EBIT approximately EBIT sustained points continue contributing XX%, to margins. with XX basis consolidated our be pleased approximately a margins of

and January, progressing to a executing into business ongoing and contribute our Europe Africa newly-formed Turning provide entity on In sell will we to Arcelik. Slide our domestic transaction Middle as business. our an update appliances regulatory East EMEA with major I The including XX, agreed to expected, and processes transaction. the agreement European are

We to continue Europe we products to best expect then, continue quarter EMEA delivering fourth Until in focus on to transaction XXXX. the close consumer the brands. and preferred the of will

me remind Let this you of benefits also of transaction.

will value with to million deliver We and new services, will a well consumers through product over consumer sustainable cost XX% billion own company, expected manufacturing, sales best-in-class to have be innovation, approximately to annual of of and synergies. over brands, €XXX positioned is €X which of attractive

to expect have to interest, cash value present agreement, creation through ability flows. year we long-term licensing net coupled a Whirlpool monetize future XX brand million with We a value our potential of minority unlock $XXX our

free by we basis margin. improvement ongoing expect incremental a post the $XXX EBIT our Additionally, creation metrics to million flows XXX of points closing, improve value in cash transaction and

in will Turning committed growth remain innovation and which and expect XX, Slide to funding expenditures over discuss research to to billion and our capital priorities, and $X invest development allocation year. this remain capital I We unchanged.

in returning we to flows. our the generate provides us cash balance dividends. cash shareholders. of support strong with sheet our of to are our Additionally, flexibility returned consecutive million coupled confident In to ability years $XXX nearly cash free XX first to half to representing with strength, in This, we XXXX, commitment shareholders,

let our investment-grade further rating. XX, commitment our me Slide to credit maintaining to discuss Turning strong

of which our leverage after Europe X our or on earlier, to well as target cash are delivering expect hand mentioned close below to that historical free strong of confident We on and $XXX towards are the we higher million with $X.X norms to and debt flow, transaction. way we cash be the billion below, times

approximately million We with paydown the term continue year. repayment $XXX loan of prioritize to by of expected debt end acquisition-related the

I flexibility XX, will debt ladder Slide and gives healthy and Turning our to review it de-risks sheet. balance our how

of We just at rate have weighted an with rate interest of our X.XX%, over attractive XX% average approximately fixed X%. debt a of held

due after solid deliver is maintain billion our returns investment-grade our This sheet Additionally, shareholder of rating. XXXX. balance to gives over flexibility $X debt and us a strong

environment, XX, delivered margin share on a Slide let to of and priorities, $XX another execution our in dynamic with and we track ongoing line to Despite results few flow. Through of remarks. expectations $XXX operational million our Turning with of sustained external $XX delivered free approximately me strong solid cash close expansion. of quarter to we per remain earnings deliver

and our our strong share of position demand recovery, to well serving year-over-year More we products the U.S. and is with positioned With importantly, is eight transformation. Whirlpool continue a from the to ongoing portfolio national of point builders, benefit our consumers of value brands as choice builders' number housing-driven one to and strength with gains. top unlock XX the resonating

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

Operator

Mike Rehaut JPMorgan. your of And comes from [Operator question Instructions] from the line first

is line Your open.

Mike Rehaut

thanks Thanks morning, the much. Great. and all Good detail. for so

to could. First if question, environment, I promotional I the wanted hit on

of the guess back reverted to expecting in the pre-pandemic higher I little how you of price perhaps the driver affects of it might half is of which from cost margin you terms beginning at year, this mentioned kind and the appears get were it's this 'XX. into outlook. maybe than levels, a I now You back was affect the in American reduced and hoping sense North to -- how

from also, year expecting I perspective America, last And at to end margin in roughly North quarter, XX%. believe, were you a the

of think additional how get 'XX. baseline in about sense that Just outside the how we for gains want business a changes to price/mix new the of should and

Marc Bitzer

of First morning. Mike, It's all, Marc. good

try So, fairly let to me question. answer wide that

you expected came the earlier we expect than it what with first, back that higher Honestly, a assumed QX. close expected. return QX, one to normal environment promotional always is -- to more I expected? at we promotion environment I came the than pre-pandemic the in probably about ask On and point, rather question where it levels. will we have that, basically, mean it And we call normality QX, would promotional would now,

one earlier. surprising not as The what in or happened two we've That's such, that's, promotional So a frankly is pre-pandemic. of depth just level not change. relative seen it surprise, the to only quarters

as see an overly So, I that concern. wouldn't

full want think But to you because on and the story, X in is that tells really a that context, what a and on margin in the remind that nothing both -- call Page walk of comparison everybody back very refer I I to see is presentation because sequentially. our the year-over-year helpful context,

in to If year-over-year alluded want But last you absent period a this is basically yes, the QX resume and from kind last first in decline was promotion any much a kind of start year-over-year. really It quarter, were price/mix on remind These Jim QX dark a comparison, to one promotion. I big you QX. year pretty everybody basically, and see, of and there promotions started earlier, a the perspective. QX marketplace of to

little this up. saw you So ramp

big, look that all are coming we that's back market. knew promotions year-over-year into yes, not such, the comparisons the So, but given as surprising

and towards the of over earnings this look. X.X in point share. last has Day perspective, the QX in Keep July points Sequentially, right we sequential is in mind, call, now relevant in more market the marketplace we QX, already Memorial The there. and X lost

it's little by heavy a than So more QX is. definition, promotional

overall when is to X.XX of more it took decline, Put price by measured to it we the picked cost out frankly, because that's for XX% margin So, reinvested call of of promotions. expanded points. wouldn't would approaching the sequentially, our and relevant we we market a you basically differently, norm. our call we approach us X Even a takeout, share worked I cost reasonable basically relative at and up out. that X.X cost -- very I marketplace look points takeout. And

back that have years, would in think and We as in consider we're that many very pre-pandemic to know context, promotion evidence put I all I over we operate the QX. So, yes, have we levels. in evidence environment, as to how environment successfully

to pre-pandemic American rate, margin this XX%. to be also North also to much margin America, American we had specifically run And margin, back margin around run on expect more the pandemic. was expect by and then pretty fully rate year-end that we it XX% a coming Now or to we was yes, around North that see can can that level XX% there and It expand into back to from coming XX%-plus where be in we on. we North

Mike Rehaut

No, you I Thank much. Great. appreciate that, Marc. very

I little contributing to a wanted color a more think to and on maybe also I addition outlook. Secondly, full And little of that, the think that's for business? notch year the what just on wanted or in in granularity get down I context is product more contribution InSinkErator hit how I launch the unfolding or that did to broadly, revenue you bit. to

I that to of drivers well. So, the understand as wanted

Marc Bitzer

me Mike, a on give InSinkErator. Yes, again, let context

First of up business. strongly. very all, we up It's The are that XX%-plus. very pleased with margins hold

EBIT-accretive more it's very We production team. There's One is business. So, factors. say, the We we quarters even appliance a as We revenue. the of InSinkErator business. like product the U.S. as housing housing soft the is before market this a first the would from broad half very, our And or always the It exposed year such, strong to like than like very efficiency. I is obviously two housing three somewhat fully be the business. will rebounds. expected, lineup. first the normal

element, of share perspective changed are So, but we where terms market a that in InSinkErator. on one is hasn't from

the The new introduction second particular, product on NextGen. in of part,

of stronger you the all, First NextGen rest line. need margins are which than carries of to know the that

product. the a going and you're what through, right So, inherently, it's now, And phase-out. phase-in margin-accretive call, we

July. in actually shipments first the started we So,

QX and we into up But very a now even new production, ongoing placement would inherent and the do the cost, which we're But phase-in, underway. in we is costs, capitalize, ramping product fully fully given margin we the the visible expect the we of product QX. take actually it's in in have of cost of slight that our burden and now in full and phase-out both it not is QX. that So NexGen a element term, attractive, the to process be sales short

Operator

the comes next MacGregor from Your Longbow of question from David line Research.

is open. line Your

David MacGregor

everyone. morning, good Yes,

Marc Bitzer

Good morning, David.

Jim Peters

David. morning, Good

David MacGregor

indicated sense I remarks right to the bit prepared wonder builder right demand of us just of to giving a mean, what volume if demand you could volume growing just I a yes, or demand better as way importance market wonder about in versus number which Marc that now. you're X seeing terms I obviously versus talk good morning, the trying to you any understanding unbundle little restock. there's for of had that the highlighted us growth. in of of you core the down. us just your we But -- guys. just now included some give you've replacement demand maybe is discretionary composition channel, a if

Marc Bitzer

David, good question. it's a very

pointed which in So colleagues still (ph) to QX. and which that and first I bit continues we of similar discretionary sentiment, to appliances, think now out, remain is we already domestic the uncertainty the what side demand, your is as little see of in territory. in still soft, the qualitatively of positive all, we not consumer demand The one appliances. impacted alluded it's it by see nature That's major a [almost a in in] discretionary to of small right

we initially were with sellout, to. industry, pretty what expected, slightly levels. which expected be line around you've consumer it X%, to put appliance, X, side, strong becomes in is industry, minus as were in replacement as numbers, this The weaker, we shipments very inventory said restocking more we and minus kind we drives holding replacement U.S. of of we and retailers much minus up because is the pretty X%, that the referring To difference shipments what the demand, is and guide were strong. I'm increased was seen think usage up industry it always to transparency, all in is low holding What pandemic

explains and So, that difference. in there, there's a element restocking the

out Now we there's because industry going forward, there. left unchanged, you still the know, uncertainty as assumption frankly,

is point, but housing about and And with the -- there in came what that's board. are recognized your to, builder morning, clear I'm big clear intake points signs mean, nationally number -- I a numbers, of data the probably a the very strong and up builder order Now referring across to recovery. this

into appliance house time You after when order an months an math to build shipments come it completed. house. know, XX just always last do X the in to anywhere the pick comes. appliance as And translates That's the being the takes order to you

So, how and But because it the the The really a know building have do now that are builders side. calendar will of intake. versus fall there's or into seven 'XX think much question come of orders we've real builder only significant we is will these 'XX. impressive on order momentum year seen six I

and update So, see we've some that again, the build, very there's right us. potentially shipment. for know and But is reluctant industry to momentum that's the side. discretionary into translate because, we But we been on news upside very, now, that on positive starting already it, could the to uncertainty housing still

David MacGregor

that. you coming the talk is that XXXX. And this comp. the well-defined as terms just at and a about takeout mentioned you in for XXXX And the does got of some What point? program, from cost that you for most follow-up, year-ago just benefit goals imply of carryover you've Thank very then

Jim Peters

I'd deliver $XXX is materials. you as Yes. is, And million, Jim. with we track what million with, seeing we're expected David, to and in first the are said, happy we raw $XXX this that extremely to what we're off, start on

any headcount XX% via we mean, to as point reduction. point year, into we've projects year, have of will that different year, reduction least also but or haven't costs cost throughout give implemented to we've and on as basis, as is won't the but look we've XX% are look and at over typically, actions, guidance attrition carry within obviously, in a you that on typical there carryover. these do next forward, Typically, XX%, at we as some think I least we that our to target of yet, -- if X.X next had take, look I reduced we year. give always said, X products we that forward

point time, this with from come at have some we expect do next we specific cost in number, into perspective. now, right don't strong a but tailwinds So, to year a

Operator

Goldman next Your from line from Maklari comes Sachs. question the of Susan

is open. line Your

Susan Maklari

everyone. morning, Good you. Thank

Marc Bitzer

Hi, Susan.

Susan Maklari

question saying My is mix. positively is changing the what has Are we're you that or that, you? shift around first having price/mix that been either within role for And that seeing? negatively that

Marc Bitzer

Marc. it's Susan,

So, big we I business, mix effect, down JennAir which look North think don't in are see particularly people performing some in the the business overall, America. detail, have you well. our referred and very would to, if Actually, KitchenAid our

couple So, feel we Maytag have the that, dish really washer, product like about introduction, we it. the lifting Coupled pretty [pad] mix. just which of are they're good with the -- (ph), a

a of going offset also -- and promotion So will major lever pressure. any mix be course, forward to

a and promotion for I mix, So, region, there's pretty been mix, the pause would also out for is again, true slight has of far North good guide by say most terms, the now at for a us. particular but innovation product that pressure so it's in in for offset But general America, right there.

Susan Maklari

and That's expect range, the fall $XXX imply materials for raw few half have million the over the the in year? Okay. that Can you're to could perhaps you million about where of months the what that talk within to any to And you last raws for then, year. of terms of some especially $XXX back as targeting the helpful. changes moved

Jim Peters

about what range Jim. as prices I kind you end at of of say this that Susan, were where we we thought would QX, at were talked end And is, is commodity remember lower the we the looking we the at as were. of QX, Yes, if in we

are probably look we the we're at we the range. happened commodity at that at slightly whether second midpoint the better And or the today we're where we're have quarter, and than point. what but prices within still as some, Now, within improved midpoint,

we're guided it now, for a thought. because what of us So, still impact what that within we against before, back range the guiding we have it's won't in that year significant half the

us. So, January big we I And in don't going next for it's a earlier, till of until year be won't I as XXXX. for mentioned think guiding to be impact later then

Operator

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

Your line open. is

Sam Darkatsh

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

Jim Peters

morning. Good Sam. Good,

Sam Darkatsh

A couple of questions.

North getting it America the specific in First don't half, around know, the to XX% off, half guiding, back in looks the so versus like margins, first back half somewhere XX% first second you're half. I versus or

think sequential back benefits we of really volumes. share can lot pricing. first you with specific moving market the cost There's But specifically see and into of thing in is I and we plans what volume and a The one RMI volume guess sequentially. takeout, can externally we pieces, production at your versus moving the expecting obviously, for half? can expectations around production, be to as you're half second the can't

Marc Bitzer

Sam, it's Marc.

we exit which said to on spot in to pre-pandemic XX.XX%, in again, the North essentially and First to expect with earlier, XX%, in back of all, we're we over yes, first margin. half America margins, half, now XX.X% in level our XX%

than you of part in mix bit of which, tend in a the half business, of there you half. as know, second to margin our the the our is first second And because particularly in back be more little element accretive, you KitchenAid, First know, One volume bit seasonal a as higher half. first of more is all, tends little is structurally, half. the a to ship related back seasonal is half

structural So these element. the are

down significantly we specifically rightfully year, take inventory we're it. The QX balanced. And the had now last think QX. trend right of out levels. Now a costly very do is much I question to we to feel coming I production to fairly you're our pointing I in and to production QX, manner would inventory, say level better right into about good about think now

some supply small items, is except very is very basically, Our smoothly. chain residual for running

the for undertake of QX in to So, draconian QX. see and I this had which we need this don't kind action

So, we similar pretty expect a as volume such, leveled QX. production to QX,

Sam Darkatsh

rate, least And in around due it how looks it the we a would Jim? where quarterly to maybe What below us that excluding drivers items, that? should And be hard and going overhead model to were overhead second primary run I corporate for question, it, came around $XX I'm was at a line or lot, that my $XX guessing of like to? that was model. bounces and was it then a thinking. the million around, million call so. imagine going it corporate And were was we items, forward, it's of number but what confluence considerably

Jim Peters

average, let's three between if year-to-date, kind say, of And in are should $XX $XX Yes, per you at Sam, take I million. than look like you and think years run do on we where if you that million, is line. back and or we're an typically, even think the just million actually that, we here's over million last, I $XX longer $XX what quarter historically

type number, be the So, closer to historical that there, bit to end takeout than doing that I cost you of some into our averages. should model lower think little obviously so lower of actions falling range continue maybe at because you'd of especially slightly we're a are

related to in certain related within to that resolving some Now into specific that can certain not be as the changes cases you I'm that them, out. we accruals expenses get that obviously, items of employee-related that close we're lot of a accruals there. drive to can or have legal going but EMEA be

range year, $XX quarter. of And between but quarters, of -- to so a million normal not for do be our fluctuations some $XX we just per million we full expect those average outside caused to

Marc Bitzer

or And actions. two alluding maybe kind again, what legal costs] Sam, expense one-timers, corporate one, of ongoing call the these structural to infrastructure to, (ph) the [either items. was Jim it, just adding the corporate, One other is base all has other cost. So,

course, one difficult the outs. and to important infrastructure. the also of always nature the that's But the model of So, underlying the little a bit ins because it's look to latter is corporate

Keep headquarter in very visible As our to workforce starting remarks to a X% we corporate salaried remarks, alluded mind, very, are That reposition corporate we also -- potential overall to a down number. is environment. post-Europe is our our our our basic significant in prepared expenses. that in And is year-over-year.

than lower ongoing And they measures. years were several our So, corporate as were such, ago. we took expenses proactive

of than So, structurally just this there structurally is also and was it couple before. lower which element years a is

Operator

from the Research. Bosshard next Cleveland of Eric Your question from comes line

is line Your open.

Eric Bosshard

Thank morning. you. Good

Marc Bitzer

Eric. morning, Good

Jim Peters

Good morning.

Eric Bosshard

than X%, the help I industry. looks guess, X%, better What was the understand and North I'm between a it gap curious, The question. dollar made you X%. revenue, all us down comment mix Can just volume could. units Jim, mechanics then growth? first if up just apparent understand you can questions, us organic the for your And your are price? I between stable. American is ex it's decline just housekeeping InSinkErator, the that Two was like help your unit -- that sounds like

Jim Peters

Yes.

you're positive. said, a So, and that within as environment, with said, would promotional as down up we the pick quarter, you would as negative. talked be year-over-year, so the share, then, say point industry was looking -- that's and -- a piece obviously Still incremental about so that last top slightly, many again, that off promotions be Marc that half that did there he first the earlier when And we at earlier, to highlighted of not in to in your it you year as time. the year-over-year, the were there have year, was of the just take

we an But it price/mix a and to then back of the for when the will as having year-over-year. impact this why is see have significant being you half that's average much less the where below walk it full year year-over-year. So quarter you impact year, get of that's

Marc Bitzer

or small keep in Canada comment KitchenAid, core pure North Eric, elements for business than than have was to last industry weak. mind other domestic in What is core showed we the QX there. better want years, business and an fairly business, was the in which couple you The year. The when appliance way prior America. hurt and small domestic appliance U.S. show And strong make Marc. but Canada kind the there perspective, like it's additional also of than was America has, we this is the business, when have InSinkErator, you softer years, a I U.S. number year you from -- is in North and the the softer year prior us very of was Canada

than see here. offsetting number items, was better the core So, business two but U.S. you these slightly were the

Eric Bosshard

is And you first half more curious I'm less guidance. strategic stable this, relative your standpoint, question, think and environment planning promotion should guess, we what first promotional focus the more to back I the the to then sharing? within are is is curious and from how guess, that secondly, then, Okay. how promotional a or on all, And for of on improving about you, Just Marc, -- focus half? market on maintaining intense a and your now participating share, your margin or I are. or which in thoughts than

Marc Bitzer

Yes, Eric.

normal, all, So environment it. will it's that efficiently, long as always we've participate to And the describe okay? sounds how and back but means we also creating. effectively environment, would they're operate know that's which we value first promotions pretty know boring, much I fairly to in that as in I said of promotional

share, expansion, an we've in of margin some of worked margin, well, but to overall -- share where we overall we balancing an to that will element is from savings there reinvest expanded very our that marketplace, win -- We kind margin. market to and expanded our of you the that going going want be for continue done act certainly all are the but course, us market And will have cost to and in Also, expand always be QX, we margins. of forward. the also

act. So that's balancing the

of cost kind all will a to know earlier, little in. right overall, very confident about takeout bit wouldn't just know levels that it's of marketplace, came not but be which again, of some and now it the not -- how feel to the we promotional it. reinvested the and which So in environment, but operate We

Operator

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

open. Your line is

Mike Dahl

few follow-up taking some where well, Good on in competitors have some cost RMI down of not and promotion just here years, extent and questions. tailwinds an your you soft, of are tailwinds sellout But of tailwinds. overall same and handicap just is maybe reinvesting leaning the some the morning. across of Thanks have environment you risk still not just Marc, into as a promotion risen How more do, back substantially to costs as half? the items for little my that. the given Presumably, company-specific your in the of competitors the do into a more some the industry. the past cost gross prices other

Marc Bitzer

Yes. Mike, I can only repeat what I said before.

yes, tailwinds. fair of or less of same that the most from probably benefit all, First materials, to the it's it's more people assume kind raw

couple worse raw particularly were the in Now years, than American that keep mind some the materials Asian last bad color, of with different of materials. North raw

an say So, to I the material North than you would production. gets a America slightly come right raw now, benefit production Asian period where more

differentiating one already element. is that So

I own would we before, is our cost company-specific I fairly that on ourselves, takeout say, takeout cost us. would half actions, than seen discrete okay? more our doing, I you've and numbers, we early and are of That's to mean, decisive. what actions the took pride

would So see than cost of some of competitors. our earlier and -- probably I these we see elements more reductions most

we've obviously, got see so. to Now,

relative don't in half July a to as We As now seen back QX. From what how we've change such, we and to we feel demonstrated the in know environment perspective, in promotional cost operate right X. I expect a takeout. around about that our confident evidenced

Mike Dahl

Got it.

the follow-up, in And just fairly inventory with mean, running was Okay. as lean. channel, respect to I then, inventory a

Is climbing that back where some sellout think off at characterized a toward levels How normal environment Is characterize now potentially You are now? little there's retail you back to are the it pockets out Or lean? still to restock. you called you inventory would relative there it still to too normal? much? any of

Marc Bitzer

up got the that's down, in that three seen couple Yes, of we've seen to mean, was years. and extreme on all, remind and years, of retail this us we've last what I levels. swings first manufacturer we last recognize the Michael, and and inventory effect bullwhip

now basically a there. that's required to we I back would took over this consider think inventories, which back at retailers of don't levels. -- I we one. trade last including And out advantage normal what to to the inventory fronts, environment we've year normal would excessive levels. on many But right we're seen, how now, And the inventories restocking see trade from took look basically, half

trade inventory. one there's carry who doesn't also know You customer

just it's So, this not levels, inventory out normalcy. there describe them basically inventories pointing out all normal see there're not Again, as I which environment retail are -- excessive there. and post-pandemic which we to would

Operator

of from Suzuki Liz Bank next from comes Your of the question line America.

Your line is open.

Liz Suzuki

you. Great. Thank

year, do beyond, quite year. this suppressed you think we on a giving just -- in tax XXXX ongoing as incorporate but we think kind going So, models? just I what our should as a normal not we the XXXX I is about forward, be obviously It's just rate think think know normalized mean, in you're you and mean, of any that guidance, what I But rate do level? and tax into

Jim Peters

Yes.

tax basis So period rate on historically, Liz, time. on would over have the basis an said and And ongoing Jim. we this of that an XXXX be the is closer we to thought extended rate a cash

tax Now already. paid is years of funded amount significant have assets incurred we've for a the over through go we and we say would and our losses what of I as divestiture that resulted there EMEA, that from have

utilize that our finding is really we're at go said, because And I continue as incur. to what like these are did we and more more through we we're many finding looking this utilize those. ability we're to And losses process, that those, to opportunity of

to going we And so range. that's similar year, why be year, in we're last XX% think, XX% to to this the

that to I a I could we a maybe a that XX% XX%. that's for rate to period the even think midterm, the XX% over or closer XX% of of was thing quoting see to XX% to time below closer least and at historical

the it's period will significant guidance, it transaction, us for And believe have over we've I we've as all we this better than some look get set benefits and then of of losses believe be we until we'll just already the we cash be historically. do the realize years longer-term to to that global look of we get incurred. to those utilize do amount that, I of able that but in addition remainder we we that hard the But and the give we have, through at footprint to of assets year, end a this at

Liz Suzuki

for you mean, follow-up the to in year is I'm a in the be pricing just of think just more into to I the easier tracking price/mix half half it And estimated year the most we on is how improvement sense. concentrated the about going it's get do guidance, -- versus as be comparisons? Or half. channel first that is makes That what curious the of of it. business retail? is think Got below the which back side by you back the homebuilder at.

Marc Bitzer

year, and back of the come no mind, last last Marc. you can had half. in second the I is half comments, have fully I earlier they Keep year. effects promotions take basically, in definition, to it. building were basically baseline This by first

easier element the the again, every comparisons where that's building. back promotions of the getting in a the because, lot So half have quarter, been

fundamentally when X.X year on be. I yes, environment in difference had So as expected from reflection originally kind a a earlier where a mean, of expected, to base, year-end baseline mind. versus promotional we but we full just one is, such, not quarter the just what this normal we and But we the quarter saw different

want So, which which to is opportunity pre-pandemic and thank we us good a heard quarter joining QX. to I mean a basis this pretty points today. I much the had, was the to question expansion, all It's for about up significant feel fully rates. the that you XXX margin -- take before, we as you last run that, and margin back Hopefully, very think step a we was I step-up. of with with

but industry, that provide point, You and good of they more year, also market positive about us one we at undeniable, start our for heard will, signals feel kind and demand environment see of it. we for towards the the end the -- seeing we or tailwinds on they're

at us joining earnings call. again Thanks QX, we feel good puts talk towards year QX that, in guidance, about for looking forward a our full with we track to are So, you the I'm reaffirming lot and on us. where to

Operator

Ladies conference and concludes call. that gentlemen, today's

now disconnect. You may

Whirlpool (WHR) 25 Jul 232023 Q2 Earnings call transcript