The paragraph is from Whirlpool Corporation's first quarter 2025 earnings call, where Scott Cartwright introduces the call and highlights that it includes forward-looking statements and non-GAAP measures. He advises that actual results may differ from these statements and directs listeners to supplemental information on their website. The call, which is in a listen-only mode initially, will open for analyst questions later. Marc Bitzer then begins his remarks by expressing satisfaction with the company's solid performance, noting a 2% organic growth and nearly 6% EBIT margins despite a challenging macro environment.

The paragraph discusses Whirlpool's strategic position amid new tariffs, highlighting their positive impact on the company as a domestic producer with significant US-based manufacturing. The tariffs address previous competitive disparities caused by Asian producers that had preloaded the US market before they took effect. Whirlpool has managed cost structures and pricing strategies, and their new product launches are expected to boost revenues and margins by late 2025. The paragraph also notes a 2% organic net sales growth in the first quarter, driven by strong performance in their SDA Global and MDA Asia sectors.

The paragraph discusses the company's financial performance, highlighting a 160 basis point increase in global EBIT margins due to pricing actions in MDA North America and Latin America, as well as cost reductions. The impact of a minority stake in Becker Europe BV was offset by an interest rate swap benefit. The company reported a $200 million improvement in free cash flow, maintaining earnings per share at $1.7 and a dividend of $1.75 for Q1 and Q2. With upcoming tariffs in July, they anticipate a more stable competitive environment, maximizing US production to achieve full-year margin guidance. Price mix improvements and cost efficiencies positively impacted margins, while raw material costs were stable and investments in marketing and technology had a slight negative impact.

In the first quarter, the Brazilian real depreciated by around 20%, causing a negative impact of 50 basis points on margins. However, a European transaction positively contributed 75 basis points, leading to an overall margin expansion of 160 basis points year over year despite market challenges. Jim Peters discusses the first quarter results for MDA North America, where net sales remained flat due to economic uncertainty and inventory loading of Asian imports before expected tariffs. Despite these issues, the segment achieved a 6.2% EBIT margin due to pricing actions and cost reductions. Significant changes to 30% of the product portfolio are planned, with positive trade responses expected in 2025. In MDA Latin America, net sales grew 2% year over year, excluding currency, with an EBIT margin of 6.6%, driven by pricing actions.

The paragraph discusses the financial performance and strategic outlook of two business segments: MDA Asia and SDA global. MDA Asia experienced a 16% increase in net sales in the first quarter, excluding currency effects, with a 7% EBIT margin, showing 240 basis points of margin expansion from cost efficiencies. SDA global reported a 10% growth in net sales, excluding currency, with an 18.5% EBIT margin, owing to strong direct-to-consumer sales and successful product launches. The segment is expected to maintain its EBIT margin in the first half, matching full-year guidance. The discussion then shifts to trade policies, with Marc Bitzer noting that the tariff landscape for U.S. imports is dynamic, which could impact the business outcomes.

The paragraph discusses the impact of trade policies, specifically Sections 232 and 301 tariffs, on Whirlpool as a domestic producer. Initially implemented in 2018 and modified over the years, these tariffs have historically put Whirlpool at a disadvantage due to the high cost of US-made steel and tariffs on Chinese components, compared to Asian competitors using cheaper Chinese steel and avoiding tariffs. Recent changes in trade policies in 2025 aim to address these disadvantages. Despite the unfavorable conditions since 2020, Whirlpool has managed the impact through pricing strategies and cost reductions.

Over the last two quarters, the US appliance industry has faced increased challenges from rising imports and retaliatory tariffs following the presidential election and tariff threats. Asian producers have significantly boosted imports into the US, exacerbating issues for domestic businesses. While these challenges persist, the current administration's trade policies are expected to benefit US producers by leveling the playing field through reciprocal tariffs and closing loopholes. A key disadvantage for US manufacturers is the high cost of domestic steel and components, which are cheaper for Asian producers who avoid tariffs. An example on Slide 15 highlights how identical products have varying costs due to these tariff discrepancies.

The paragraph discusses the challenges and strategies Whirlpool is employing to address a $70 cost disadvantage in producing appliances in the US versus importing from Asia, which can translate to a $150 retail price difference. Despite this disadvantage, Whirlpool remains competitive due to several actions they're taking: adjusting pricing strategies, increasing US production to reduce Asian dependency, and engaging with policymakers on tariff issues. As a result, Whirlpool is well-positioned to benefit from new tariff policies due to its substantial US-based manufacturing operations.

In the paragraph, Jim Peters reviews the company's unchanged 2025 guidance amid macroeconomic uncertainty. The 2024 baseline excludes certain European and Indian operations, resulting in a comparable 2024 net sales figure of $15.4 billion with an EBIT margin of 5.8%. For 2025, the company anticipates 3% organic growth, leading to $15.8 billion in net sales with an expanded EBIT margin of 6.8%. Free cash flow is projected at $500 to $600 million, and the adjusted effective tax rate will rise to 25%, affecting earnings per share, which are expected to be approximately $10. They aim to mitigate a 250 basis point impact from tariff changes, assuming no further changes in trade policy.

The paragraph outlines the company's strategic plans, focusing on cost-based pricing, supply sourcing changes, and capital allocation. Priorities include funding organic growth, launching new products, reducing debt by paying down $700 million in 2025 to reach a two times net debt leverage target, and maintaining a steady or increasing dividend for the seventieth year. The company plans to address upcoming debt maturities with $1.85 billion maturing this year and expects to refinance a portion of it. Anticipated cash from an India transaction in 2025 will support these efforts. The company has flexible debt management plans, with over 30% of its debt maturing beyond 2030.

The paragraph discusses the company's strategy to support organic growth through new product launches. Key products include the KitchenAid induction cooktop with a sleek design and easy-to-clean coating, the JennAir built-in wall oven with dual convection for even heat distribution and an intuitive interface, the Bras Tempe freestanding range in Latin America featuring an AirFryer Pro and safety features, and the KitchenAid blender with powerful blades and versatile design. These innovations highlight the company's commitment to offering modern and durable kitchen appliances.

The paragraph describes the highlights from the company's booth at the Kitchen and Bath Industry Show (KBIS), North America's largest trade show for kitchen and bath design. The booth featured innovative products from brands like Whirlpool, Maytag, KitchenAid, and JennAir. These innovations included KitchenAid's first product redesign in a decade, introducing customizable colors, finishes, and features like intelligent autofill in refrigerators and a built-in oven camera. JennAir showcased downdraft induction cooktops that improve kitchen ventilation without obstructing views. The booth received positive feedback and won seven awards, emphasizing the company's commitment to innovative home solutions. Despite a challenging macro environment, the team's achievements are commendable.

The company achieved organic growth and margin expansion in the first quarter despite facing cost disadvantages in North America due to US-based production. While they believe evolving trade policies will eventually support American manufacturing, they remain well-positioned to benefit from a future housing recovery in the US. They have a strong pipeline of new products and are taking measures to mitigate tariff impacts. Their Asia business is performing well with strong growth and margin expansion, while their Latin America business is effectively handling currency challenges through pricing strategies. They expect their global SDA business to continue growing and delivering strong EBIT margins. The company reiterates its full-year guidance and focuses on organic growth, debt reduction, and dividend payments in 2025. They are confident in their operational priorities and are monitoring the macro environment to position the business for success. The paragraph ends with the announcement of a Q&A session, starting with a question from Laura Champine of Loop Capital, who appreciates the detailed presentation on tariff impacts.

The paragraph features a conversation between Marc Bitzer and Laura Champine about the impact of tariffs on the market. Bitzer speculates that a reduction in tariffs from 145% to 10-20% wouldn't be sufficient to shift factory locations, as the intention to move factories requires more significant tariffs. The discussion also highlights that even at lower tariffs, changes in commercial behavior are visible in the marketplace. Additionally, Bitzer points out that beyond China, Southeast Asia benefits from cheap Chinese steel, suggesting that closing trade options from China wouldn't be entirely effective. Laura mentions press release notes about Asian competitors pre-shipping appliances to circumvent tariffs, impacting the U.S. market, with Asian imports up by 30% in the fourth quarter and early months of the year. However, they do not yet have March data to measure the continuing impact.

The paragraph discusses market dynamics and pricing strategies related to inventory and tariffs. The speaker mentions that preloading inventory into the marketplace will continue, and despite market disruptions, they managed it in Q1 and expect similar dynamics in Q2. They anticipate changes when tariffs fully take effect. In response to Sam Darkatsh's question, Marc Bitzer explains that an additional price increase is planned for April, building on previous increases to cover component cost impacts. He doesn't specify details by product group, but indicates that it is mostly to address component costs, with potential future supply chain solutions for microwaves. The cumulative pricing actions influence promotional depth and minimum advertised prices (MAP).

The paragraph discusses the impact of pricing and tariffs on market demand. It mentions that while there is confidence in achieving a price increase of 0.75% or more, potentially up to 2% due to pricing strategies, demand dynamics are mixed. Replacement demand, accounting for 65% of the market, remained strong in Q1, providing a stable base. However, discretionary demand weakened throughout the quarter, largely due to declining consumer confidence that began in February and March. This trend is expected to continue into Q2, leading to overall steady market demand.

The paragraph contains a discussion between Michael Rehaut from JPMorgan and Marc Bitzer regarding the impact of tariffs on costs in the context of consumer preloading and retail advertising. Michael Rehaut asks for clarification on Slide 15, which highlights cost differences between the company and its Asian competitors due to tariffs. He inquires whether these Asian competitors, particularly from South Korea, would face significantly higher tariff-related costs due to their overseas production, resulting in a greater disadvantage than the $70 currently attributed to the company. Marc Bitzer acknowledges the need for a detailed answer and notes that the company has provided extensive analysis this time, but this level of detail may not continue in the future.

The paragraph discusses the business production and sourcing strategy of a company, highlighting that 80% of its products sold in the U.S. are produced domestically, with most components, including 98% of steel, sourced within the U.S. This positions the company as primarily a U.S. producer compared to the rest of the industry, which largely relies on imports. The company faces challenges due to a preexisting tariff loophole that allows competitors to use cheaper foreign steel, creating a structural disadvantage. While the company cannot access cheaper Chinese steel or certain components domestically, competitors can import these without tariffs, affecting market competitiveness. However, the new administration is aware of the issue and is taking steps to address the loophole, and the company appreciates their efforts.

The paragraph discusses the potential impact of reciprocal tariffs on a company, emphasizing the anticipation that loopholes will be closed by the new administration. Jim Peters and Marc Bitzer highlight that a restructuring of tariffs could close existing gaps and potentially incentivize increased US production, thereby boosting factory volumes. They address how they plan to offset a $250 tariff cost headwind this year through adjustments in price and cost, suggesting a possible range of 100 to 200 basis points. There is also consideration of the timing of these tariff impacts and price increases, with the possibility of a timing-related tailwind if tariffs don’t take effect until July, while price increases are effective from April.

The paragraph discusses the impact of tariffs on business operations, noting that the effects are already being felt and are expected to worsen later in the year. The company has taken steps to mitigate the effects, such as holding component inventories and adjusting pricing strategies. Although a large portion of what the company sells in the U.S. is not sourced from China, there is still a need to rewire the supply chain to some extent. The company plans to address the tariff impacts through pricing adjustments and cost actions, with a focus on limited supply chain changes, given their position as a U.S. producer with minimal reliance on Chinese components.

In the conversation, the speakers discuss the anticipated financial impacts on North America's major domestic appliance (MDA) margins for the upcoming quarters. They note that despite headwinds from products introduced by Asian competitors and the timing of promotional periods, the benefits from pricing strategies and cost actions are expected to be more pronounced in the second half of the year. Jim Peters highlights that the second quarter will likely mirror the first in terms of margins, but projects a substantial improvement, approximately $200 million to $250 million, or over a 100 basis point increase, in the latter half of the year.

The paragraph discusses the company's strategy for the latter half of the year, focusing on the benefits of promotional pricing and new product launches, particularly in the KitchenAid line. They anticipate gaining about 75 basis points in net cost savings due to current and additional cost actions and expect volume leverage to contribute further. As products move through the market, they see an opportunity to increase market share, aiming for an additional 50 to 75 basis points. Susan Maklari asks about the Small Domestic Appliances (SDA) segment, which has shown strong initial momentum in 2025 due to product innovations like coffee makers, grain cookers, and wireless appliances. Marc Bitzer acknowledges the successful first quarter for SDA and attributes it to these innovations.

The paragraph reports a discussion between David MacGregor from Longbow Research and Marc Bitzer regarding the impact of tariffs on imported products in the U.S. market. David questions how much of their U.S. unit volume is affected by tariff-impacted imports, which he associates with the mass premium segment. Marc clarifies that the imports affected by tariffs are not limited to the mass premium segment but include a range of products such as private label and opening price point (OPP) products from countries like China, Thailand, and Korea. These imports affect various market segments and exert pressure on the entire product line.

The paragraph discusses the impact of Asian imports on the product lineup, particularly except for super-premium items, and then transitions to a discussion between David MacGregor and Marc Bitzer about the strength and growth of the direct-to-consumer (DTC) business model. Bitzer notes that the small domestic appliance (SDA) segment is more suited to online sales due to ease of shipping and lack of installation needs, compared to major domestic appliances (MDA). The SDA business has successfully leveraged the DTC model over recent years, fostering customer loyalty and follow-on sales, making it a core part of their business strategy.

The paragraph highlights a discussion between Jim Peters and Mike Dahl regarding the financial outlook for the company's North American operations. Jim expects the second quarter to have similar sales and margin performance as the first quarter, with a modest increase in margins later in the year. The company attributes current margin pressures to excess product in the marketplace but anticipates improvements due to cost actions, pricing, and volume growth. Marc Bitzer adds that tariffs will positively impact the North American business.

In the paragraph, Marc Bitzer emphasizes the positive reception of their new products showcased at KBIS, noting that these products, alongside tariff considerations, create a promising outlook for their North American business. Despite acknowledging shifts in the consumer landscape and ongoing pressures, including cost challenges and decreased consumer confidence, Bitzer stresses that the company is not relying on an immediate market improvement. Instead, they are focusing on internal strategies such as cost reductions, pricing actions, and the success of new product introductions to navigate the uncertain environment. Mike Dahl questions the decision to maintain guidance in such an uncertain context, expressing concerns over near-term pressures.

The paragraph discusses the company's strategy and outlook amidst challenges and uncertainties such as tariffs and competitive pressures. The speaker, Jim Peters, explains that despite these challenges, the company has maintained its full-year guidance due to multiple price increases and cost-saving actions. He suggests that while there is currently an influx of Asian-produced products affecting the market, this situation is not permanent and may stabilize in the latter half of the year. In response to a question from Rafe Jadrosich of Bank of America, Marc Bitzer acknowledges many uncertainties in the market, including demand elasticity and competitive pricing, but remains optimistic about the company's positioning due to their strategies.

The paragraph discusses the concept of price elasticity in consumer categories, emphasizing that while individual product prices might influence consumer choice in-store, the overall category demand, particularly for replacement items, remains relatively inelastic. This is because consumers will replace essential items like washers regardless of price changes, limiting the potential for profit from product mix changes. The text suggests that the introduction of tariffs could boost US production and market share, although the industry outlook for the near future is expected to remain flat. There is an optimistic long-term view linked to growth in the housing market, but no immediate changes are anticipated.

In the paragraph, Eric Bosshard asks about the impact of tariffs on their business, noting a figure of 250 basis points equating to roughly $400 million. Marc Bitzer explains that the tariff impact is mostly weighted towards the latter half of the year due to timing and accounting processes. Jim Peters adds that mitigation actions are in place, which may alter future impacts depending on where they source materials. Eric further inquires about the breakdown of this impact, questioning whether it results more from finished goods or components. Marc Bitzer clarifies that the majority of the impact comes from components, with some from finished goods.

The paragraph discusses challenges in sourcing components that are currently impacted by 232 tariffs and are not yet available from the US or Mexico. The company is working on restructuring their supply chain to mitigate these effects by 2026. Additionally, it mentions a tornado that damaged their Tulsa, Oklahoma factory in March, which employs 1,600 people. Despite the damage, no one was injured, and the team worked tirelessly to resume operations within four weeks. The speaker expresses gratitude towards the Oklahoma workforce and concludes by thanking listeners.

This summary was generated with AI and may contain some inaccuracies.