WHIRLPOOL CORP /DE/ — Call Transcript 2025

Good morning and welcome to Whirlpool Corporation second quarter 2025 earnings call. Today's call is being recorded. Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer, and Jim Peters, our Chief Financial and Administrative Officer. Our remarks today track with a presentation available on the Investor section of our website at whirlpoolcorp.com. Before we begin, I want to remind you that as we conduct this call, we will be making forward-looking statements to assist you in better understanding Whirlpool Corporation's future expectations. Our actual results could differ materially from these statements due to many factors discussed in our latest 10-K, 10-Q, and other periodic reports. We also want to remind you that today's presentation includes the non-GAAP measures outlined in further detail at the beginning of our earnings presentation. We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the Investor Relations section of our website for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. At this time, all participants are in listen-only mode. Following our prepared remarks, the call will be open for analyst questions. As a reminder, we ask that participants ask no more than two questions. With that, I'll turn the call over to Marc. Thanks, Scott, and good morning, everyone. As expected, we navigated the challenging second quarter and continue to operate in an increasingly complex external environment. The macroeconomic uncertainty, marked by elevated interest rates and evolving trade policies, negatively impacted consumer sentiment. In particular, weakness of consumer sentiment not only suppressed demand, but also impacted itself as we continue to see consumers choosing to mix into lower end products. Furthermore, with recent delays in tariff implementation, Asian competitors are not yet experiencing the full cost of tariffs and have continued to increase their imports ahead of the tariffs. In fact, we estimate that during the first half of this year, the amount of Asian appliance imports will approach the highest level on record. Needless to say, this preloading has created significant short-term disruption, adding to the promotional intensity throughout the second quarter. We are well-positioned to win over time and are confident these effects are temporary in nature. However, it has become clear that they will extend well into the third quarter, putting pressure on short-term margin expansion. Despite these macro challenges, we still delivered sequential net sales growth across all segments in the second quarter and very strong results in our SDA Global business driven by our exciting new products. Given the prolonged loading impact by competitors and the lack of consumer confidence in the marketplace, we are updating our full-year guidance. As we expect the full impact of tariffs to kick in later this year and these temporary negative effects to subside, we are confident that we will see meaningful improvement in the MDA North American business heading into next year. Our perspective has not changed, but Whirlpool will be a net beneficiary from these new tariff policies. We are structurally positioned to win in this environment and believe we are operating from a position of strength driven by a strong domestic footprint. Irrespective of the external challenges, we will stay focused on what we control. We successfully implemented pricing actions, we structurally drove cost out of our business, and we strengthened our balance sheet with our recent debt refinancing. Putting it all together, our investment case remains as strong as ever and we see a credible pathway for improvement in our results. One, we are excited about the extensive portfolio of new products we're introducing this year, the largest number in more than a decade. Two, we are a clear beneficiary of structural shifts in trade policy, and three, our leadership position with U.S. home builders and our deep relationship with national accounts position us to benefit from eventual recovery in the U.S. housing market. Whirlpool is well-positioned to deliver sustained long term value, and we have every confidence we will do so. Turning to slide six, I will provide an overview of our second quarter results. Negative consumer sentiment that impacted global industry demand in the second quarter led to a 3% decline in net sales excluding currency. Despite the challenging demand environment, we continue to see strong growth in our SDA Global business. Global EBIT margins held steady year-over-year at 5.3% despite significant currency headwinds, primarily from a weakening Brazilian real. Our free cash flow was unfavorable versus prior year by approximately $140 million, driven by the seasonal inventory build. Ultimately, we delivered ongoing EPS of $1.34, which was negatively impacted by approximately $0.35 from a non-cash loss associated with our minority interest in Beko Europe B.V., b.v. Turning to slide seven, I will provide an overview of our second quarter ongoing EBIT margin drivers. Price mix favorably impacted margin by 25 basis points. This was slightly below our expectations as the preloading of Asian imports sustained an intense promotional environment. Additionally, weakened consumer confidence pushed mix down further in an environment that was already largely replacement driven. As expected, our cost takeout actions delivered margin expansion of 100 basis points year-over-year, led by our continued manufacturing and supply chain efficiencies and our organizational simplification actions. As expected, raw materials were essentially flat. In the second quarter, we began to experience the increased cost associated with tariff implementation at approximately 50 basis points. While overall marketing and technology was flat versus prior year, we have continued to invest in our new products. In the second quarter, the Brazilian real and Mexican peso depreciated compared to prior year, resulting in an unfavorable margin impact of 50 basis points. We also experienced approximately $90 million of unfavorable non-cash impact from our minority stake in Beko Europe B.V.. Ultimately, we maintained flat margins year-over-year despite the challenging global macroeconomic environment. I will now turn it over to Jim to review the second quarter segment results. Thanks, Marc. Good morning, everyone. Turning to slide eight, I'll review the second quarter results for our MDA North America business. Net sales were down 5% year-over-year as we continue to experience a challenging macroeconomic environment. In the U.S., consumer sentiment remains weak as a result of the economic uncertainty and evolving tariff policies. As Marc stated, the significant preloading of Asian imports from foreign competitors due to the delay in tariff implementation caused the promotional intensity to persist. In the first half, we saw Asian imports up over 20% while the industry was down despite being propped up by the inventory loading. All this is effectively delaying the impact of tariffs on appliances being imported by our foreign competitors well into the second half of this year. Despite these challenges, MDA North America delivered an EBIT margin of approximately 6% with strong cost takeout actions offset by lower volume and unfavorable product mix. While we continue to experience a choppy macroeconomic environment, we are confident in our growth potential for North America. Turning to slide nine, I'll review the results for our MDA Latin America business. In the second quarter, MDA Latin America experienced a net sales decline of 1% year-over-year excluding currency, with implemented pricing actions offset by double-digit negative consumer demand. In Mexico, the segment delivered a solid EBIT margin of 6% with favorable price mix and cost actions driving approximately 20 basis points of expansion year-over-year. Turning to slide 10, I'll review the results for our MDA Asia business. In the second quarter, MDA Asia saw a net sales decline of 4% year-over-year excluding currency, driven by industry decline partially offset by continued strong share gains. The segment delivered over 7% EBIT margin in the quarter with 90 basis points of year-over-year margin expansion from continued cost takeout actions. Our Asia business continues to operate well, overcoming the geopolitical tensions in the second quarter and delivering substantial margin expansion and share gains. Turning to slide 11, I'll review the results of our SDA Global business. The segment delivered another strong quarter with net sales growth of 8% year-over-year driven by direct-to-consumer sales growth. Despite a declining industry in North America, we continue to see growth and margin expansion from our recent product launches in high-growth categories including our semi- and fully-automatic espresso machines. The SDA Global business is well-positioned to continue to deliver significant growth in the second half of the year, which typically accounts for two-thirds of annual demand. Now I will turn the call over to Marc to provide an overview of North America's growth catalysts. Thanks, Jim. Turning to slide 13, we outline why North America is well-positioned to unlock significant value creation. As mentioned before, there are three fundamental components that serve as catalysts for growth of our North America business. First, we strengthen our leading brand and product portfolio with over 30% of our North American products transitioning to new products in 2025. For context, this is our largest product portfolio refresh in over a decade. Our trade customers have responded very positively to the new product innovations we're launching this year, resulting in gaining a significant number of new floor spots. While the new product launches are taking place throughout 2025, we expect to see the biggest impact from our new KitchenAid suite launch, which starts shipping late September. Secondly, our strong U.S.-based manufacturing footprint positions us as net winners of our new tariff and trade policies. In an industry where most competitors are largely importers of major domestic appliances, eight in 10 products Whirlpool sells in the U.S. are made in the U.S. Furthermore, the majority of our raw materials and components are also domestically sourced, with over 96% of the steel used in our U.S. factories sourced from us. With our larger domestic production footprint, we are uniquely positioned in the appliance industry and the current economic landscape. Based on the announcements in effect as of today, we expect that foreign competitors will begin to experience the full implications of tariffs in appliances as they sell down their preloaded inventory in the back half of 2025. Lastly, turning to the U.S. housing market, we continue to see strong underlying fundamentals that point to a likely multi-year recovery. The industry has been experiencing multi-decade lows in existing home sales as mortgage rates have remained elevated. This is also shaping the profile of major appliance demand, which has seen discretionary demand contract by 10 points as existing home sales tend to be the primary driver of discretionary demand. While we're not assuming a housing market recovery in 2025, we believe in the mid to long term fundamentals and our position to capitalize on missed opportunity. Simply put, there is no company better positioned to benefit from eventual housing market recovery than Whirlpool. Now, turning to slide 14, I would like to highlight some of the exciting new product launches. Let me start with our innovative downdraft induction cooktops from JennAir. As you might know, the downdraft cooktop is the heritage product of a JennAir super premium brand. What is new is the unique combination of induction technology with the most advanced and most powerful downdraft system, which we developed jointly with a leading European downdraft company. Apart from the obvious benefits of a downdraft like faster, more effective extraction and an unobstructed view, this product can be installed without a duct, which offers a great replacement demand opportunity. Based on what we learned from Europe, that this product is leading in the marketplace by value, we believe there's significant growth opportunity in the U.S. as well. On slide 15, you see a picture of our all new KitchenAid suite, which starts shipping end of September. To put this in context, the last time we introduced an all new KitchenAid suite was in 2015, and this line of products represents over $1 billion of business. Beyond the modern and advanced design, this line will be unique in its personalization opportunity. The personalization comes from a combination of interchangeable colors, handles, and knobs, which actually can be changed at the customer's home. We introduced this new line to the design and builder community a few months ago, and the response has been remarkably strong with hundreds of new floor spots gained. Lastly, on slide 16, we show you our new Maytag Pet Top Load laundry. You might recall that our Pet Pro technology has been hugely successful in the top load agitator segment. We're now bringing this innovation also to the impeller top load machines, which tend to be more in the premium segment of the marketplace. It is an industry first technology, and the Maytag brand has all the credibility in getting the top job done to launch this innovation. Turning to slide 17, we'll discuss the tariff landscape for appliance importers into the U.S. This slide summarizes the relevant tariff actions taken by the administration and illustrates the estimated tariff rates as a percentage of total product value. Assuming rates as of today and the August 1 reciprocal tariffs, you can see in the table how the various tariffs, including Section 232 in steel content, Section 301 specific components and finished goods, and the reciprocal IIPA tariffs from various countries, impact appliance imports while the overall tariff picture is still fluid. A 44% tariff on Chinese products and a 16% tariff on finished goods from other Asian countries should substantially impact competitors and in turn benefit American manufacturers. Slide 18 clearly shows why we believe that no matter how you look at the U.S. appliance industry, there is no other company better positioned than Whirlpool with our U.S. manufacturing footprint to navigate the straight landscape. As you can see, 80% of our MDA North American products sold in the U.S. are produced in the U.S. This compares to the rest of the industry excluding Whirlpool, which has only about 25% domestic production. We're proud to be invested in U.S. manufacturing and we will continue to invest in the U.S. as we have for over a century. As we are one of the only primarily domestic producers compared to our major competitors who are largely importers, we're confident that this is a new competitive advantage for Whirlpool in the new tariff landscape. Turning to slide 19, let me review how our North American business is well-positioned to benefit from an overdue housing market recovery. In the U.S., appliance demand is broken down into three main categories: discretionary demand, which is highly correlated to existing home sales, new home construction, and replacement demand driven by the rest purchases. The U.S. housing industry has slowed in recent years as interest rates have risen sharply, drastically impacting discretionary demand. Notably, the size of these demand drivers has shifted significantly in this time frame with replacement demand becoming a bigger portion of overall demand. While replacement demand has continued to be strong, this comes with a weaker mix relative to discretionary demand. Return of discretionary demand will bring a much stronger appliance mix. Turning to slide 20, we show how discretionary demand is impacted by existing home sales. As mentioned earlier, there is a strong correlation between discretionary demand and existing home sales. In 2022, the rapid increase in mortgage rates slowed home sales significantly to the lowest level in 30 years. As mortgage rates begin to moderate off the peak, we expect existing home sales to improve. Discretionary demand has a richer mix with more built-in products and full kitchen suite sales. We expect existing home sales will unlock in the midterm and improve discretionary demand. On slide 21, we discuss U.S. new home construction which has been under supplied since the financial crisis and creates long-term upside potential for Whirlpool. There is an undersupply of U.S. housing of approximately 3 million-4 million homes, along with the rising median age of U.S. homes to over 40 years, which is the oldest housing stock in U.S. history. Given the favorable demographics in the U.S., a multi-year improvement in new housing starts is needed to address the undersupply gap. Turning to slide 22, we highlight how our leading builder business is positioned to benefit from the overdue housing recovery. A few years ago, we made the conscious choice to invest in the U.S. Builder business and significantly strengthen our position in this part of the segment. As a result, today we're proud to hold the number one position with national builders, approaching 60% share. We also do business with eight of the top 10 builders in the U.S. Our final mile delivery capabilities, along with the breadth of our products and brand portfolio, allow us to directly serve our builders and meet their needs. A truly differentiated capability. Putting it all together, you see that we are at an inflection point in terms of our performance and our position to win in this environment. To wrap up this section, let me repeat our three catalysts for structural long-term growth in our North American business: with new products strengthening our leading brand portfolio, a unique domestic footprint which positions us as a winner in the new trade policy, and our number one position among builders which will provide sizable upside in the eventual housing market recovery. Now I will turn it over to Jim to review our 2025 guidance and capital allocation priorities. Thanks, Marc. Turning to slide 24, I will review our updated guidance for 2025. As Marc highlighted, there continues to be considerable uncertainty in the macroeconomic environment along with short-term headwinds from the preloading of Asian appliance imports. As a result, we are updating our full-year guidance to reflect this uncertainty and the timing in which we expect some of these headwinds to subside. We now target the India transaction to close around year-end and therefore have included the India results from July through December 2024 back into the baseline for comparison purposes. The reset baseline excludes approximately $800 million in net sales and an approximately $9 million EBIT loss, creating a like-for-like comparison for 2025 guidance. On a like-for-like basis, 2024 net sales were approximately $15.8 billion with an ongoing EBIT margin of approximately 5.7%. We expect approximately flat net sales of $15.8 billion in 2025, reflecting our strong pipeline of new products offset by the worsening global consumer sentiment impacting demand and unfavorable currency. On a like-for-like basis, we expect an approximately flat ongoing EBIT margin of 5.7%. Free cash flow is expected to deliver approximately $400 million. As a reminder, the adjusted effective tax rate is expected to be 20%-25% in 2025. We still expect the cash tax rate to be significantly lower. We expect full-year ongoing EPS of $6-$8. Turning to slide 25, we show the drivers of our updated full-year ongoing EBIT margin guidance. We have updated our expectation of price mix to 25 basis points to reflect the weakening consumer sentiment impacting mix and the delays in tariff implementation prolonging the promotional pressure beyond what we previously anticipated. Net cost takeout reflects the expectation of delivering approximately $200 million. Transaction impacts reflect our most recent expectations on the non-cash impact of equity from affiliates related to Beko Europe, lowered by 25 basis points. We lowered the expected impact of incremental tariffs from 250-150 basis points to reflect the most current proposed tariff rates. The biggest adjustment from previous expectations is most notably from China's tariff rates. We expect to offset these impacts through the cost-based pricing actions announced in the second quarter and by continuing to assess our supply sourcing strategy. It is important to reiterate that these impacts represent currently announced tariffs and do not factor in any future or potential changes in trade policy. Turning to slide 26, I will review our updated segment expectations. Globally, we now expect the total industry to be approximately flat to down 3% in MDA North America. With the worsening consumer sentiment and pressure on discretionary demand, we expect the industry to be flat to down 3%. MDA Latin America has seen significant deterioration in Mexico and a deceleration in Brazil, therefore, we now expect industry to be flat to down 5%. We continue to see demand improvement in India. However, behind initial expectations due to geopolitical tensions and an unusually cool summer selling season in the second quarter, we have adjusted the MDA Asia industry flat to up 3%. Finally, SDA Global continues to be impacted by discretionary demand weakness in the U.S. and Europe, resulting in the expected industry for the year to be flat to down 3%. It is important to note that we continue to expect to deliver incremental sales growth through our new product introductions. Despite the unfavorable industry, we have adjusted EBIT margin in North America to reflect the prolonged effect of tariff uncertainty and the competitor preloading negatively impacting the promotional intensity. We expect a full year MDA North America margin of 6%-6.5%. With unfavorable currency impacts and weakening consumer demand in Latin America, we now expect EBIT margin of approximately 7%. We now expect MDA Asia EBIT margin of approximately 5% driven by India consolidated results now being included in the full year guidance. With the strength of SDA Global's direct to consumer growth and previous new product introductions, we now expect an increase in EBIT margin to 15.5%. Turning to slide 27, I will review our free cash flow guidance. We've updated our cash earnings and other operating accounts consistent with full year EBIT guidance. We have not changed our expectations for capital expenditures and continue to focus on delivering product excellence and investing in our U.S. manufacturing footprint. We expect to sustain our low working capital levels and do not expect a material impact. Finally, we've updated the restructuring expectations of the previously announced organizational simplification actions to approximately $50 million. Overall, we expect free cash flow of approximately $400 million for the year. Turning to slide 28, I will review our capital allocation priorities. Investing in innovative products that meet our consumers' needs is critical to driving our organic growth. We are very excited about the 100+ new products we are launching this year. Secondly, we are committed to reducing debt levels. We continue to expect to pay down $700 million of debt in 2025, taking a significant step towards our long-term target of 2x net debt leverage. Lastly, we are committed to returning cash to shareholders by funding a healthy dividend. We are confident our business is well-positioned for growth. However, the volatile macroeconomic environment and prolonged suppressed housing cycle have impacted our short-term results. After careful consideration with focus on our long-term value creation, we are recommending to adjust the annual dividend rate to $3.60 per share starting in the third quarter. While this decision was not taken lightly, it is critical to ensure we create the capacity on our balance sheet for future investments in the U.S. and continued focus on debt repayment. As a reminder, the dividend is approved quarterly by the Board of Directors. Turning to slide 29, we continue to strengthen our balance sheet and operate with ample liquidity. We proactively refinanced $1.2 billion of debt with five and eight year notes at very favorable rates with a weighted average rate of 6.3%. We still expect to pay down approximately $700 million of debt this year and the cash generation from the anticipated India transaction, which has generated significant interest from large third-party investors, is targeted around the end of 2025. As a reminder, we have ample liquidity for our operations and financing needs as we have access to a $3.5 billion revolving credit facility. Turning to slide 30, let me review what you heard today. While we are operating in a challenging macro cycle, we are encouraged by our progress. We continue to reduce costs from our business, launch record numbers of new products, and execute previously announced pricing actions in North America. We're very well-positioned for growth driven by our new product innovation, significant domestic manufacturing footprint, and housing demand fundamentals that suggest a multi-year recovery is on the horizon. We continue to expect the aministration's tariff policies will help level the playing field for U.S.-based producers and in effect make Whirlpool a net winner. Our SDA Global segment delivers strong value creation as it delivers continued top line and margin expansion. As we move into the second half, we remain focused on the execution of what is within our control, driving structural cost takeout, implementing previously announced pricing actions, and executing on our capital allocation priorities including organic growth, debt reduction, and funding a healthy dividend. With the right operational priorities in place, we are confident in our strategy and our ability to create long term value. Now we will end our formal remarks and open it up for questions. At this time, I would like to remind everyone in order to ask a question, press Star, then the number one on your telephone keypad. Your first question comes from the line of David MacGregor from Longbow Research. Your line is open. Yes, good morning everyone. Marc, what's your best estimate of the quantity of pulled forward tariff-free imported product currently on the ground, and how long will it take to move that through retail? David, first of all it's difficult to exactly give an estimate, but let me give you a couple data points. As you've seen, the market overall on a sell-in base, on a registered sell-in base was slightly down in Q2, while at the same time the appliance imports from Asia, if you take the year-to-date numbers, they are significantly up. I mean we're talking particularly if you exclude China, more than 20% up. There's a significant imbalance between the officially declared sell-in and what has been shipped from Asia. I would argue even with declared sell-in is slightly above the actual sell-out. We also, and we referred to this one earlier, what has been declared as a shipment may include some consignment stock from competitors. It's very difficult to calibrate. We don't have a June official import date. I'm referring to the May 1. As of end of May I would have expected there's probably easily 60-90 days of inventory from the excess Asian imports in there that hopefully will flow through a system and I think hopefully will become every month less as the tariffs are taking really effect. It has been a significant additional loading happening throughout May. Okay, thanks for that. As a follow up, I just wanted to ask you about the promotional calendar, and I guess at this point all the manufacturers are out with their promotional plans for the second half. What are you hearing in the way of how second half might look different from the first half? It seems as though manufacturers are backing off PMAPs, support for house offers, shifting to more kind of buy more, save more type of promotional programs. Is the problem that your competitors' promotional focus has shifted to more premium products and that's cutting more into your margins? Just talk about how the second half should play out. Yeah. David, as you know we're kind of typically don't give forward looking statement on promotion and pricing. Let me just more kind of wisdom of hindsight including July 4th and then you can try to read whatever into this one. First of all, as you've seen in Q2 we significantly reduced our promotional efforts both in duration and depth of promotion. Frankly, in Q2 we're probably quite a bit ahead of our competitors in terms of being a little bit more or less aggressive, if you want to say so. That was simply a result we saw. Also, we're impacted by tariff costs and we had to adjust it. More importantly, simply in a strong replacement driven market, the lift you get from these promotional investment is just very little. If you really look at the math of some of these promotions, the lift you get is to some extent even pulled forward. You start wondering does it purely economically make sense to have these deep investment promotion periods when the lift is just very little? That's ultimately why we curtailed our promotional depth and duration Q2. Right now again we don't give forward looking statements. Right now I would not expect completely different behavior from us. We saw in the industry July 4th was still deep for the industry. That is a large result. There's excess inventory build up in the system and probably people had to sell it off and that's just what it is. We saw post July 4th call it a normalization post promotion. There was a move up but it's hard to yet predict what it really means. For what you probably refer to Labor Day and Black Friday, I would overall expect probably a more muted environment than in the past. That's right now pure speculation from my side. Your next question comes from a line of Mike Dahl from RBC Capital Markets. Your line is open. Hi, thanks for taking my questions, Marc. I just want to follow up on. The import dynamic, because I think, you know, on the last call the inventory was characterized as maybe a number of weeks. Now it's extending through 3Q, which is kind of many, many months, going back to the April comments now through September. Understanding that some of the data that we can all see is lagged, how much visibility do you actually have to make those kind of calculations around how much is in warehouses or how much is at, you know, city, whether it's warehouses at ports or warehouses from your retailers? Just trying to figure out the, especially as China seems to be on. the verge of, you know, those tariffs getting delayed again, how you gauge the visibility of that level of imports. Yeah, Michael, let me maybe give you a little bit longer answer to your question. Of course, it's more calibration as opposed to absolute facts because obviously we don't have precise inventory data by our competitors. Let me context first of all, when we had our last earnings call, that was April, that was pretty much post or just a few weeks post the Liberation Day announcements. I also want to be very clear, of course we 100% support what the administration is trying to do and we ultimately will be a net beneficiary of this one. You also have seen that since then there have been a number of delays and frankly we're still operating in an environment where there's uncertainty about what happens around August 1, what happens with country tariffs. As much as we strongly applaud what the administration is doing, of course we all live in an environment where tariffs have been delayed or postponed. Now, you can also imagine when you send a message to our competitors that the tariffs are delayed, like an invitation to ship a little bit more for the next couple of weeks. That's what we've seen throughout the entire second quarter. By the way, the interesting data point you just need to look at is if you look at the container rates in terms of how they spike up, that's always a signal there's more demand for shipments. We've seen that with every tariff delay there is another round of additional loading. Now, to calibrate it, yes, we know what the official sell-in data is. We know what the appliance imports are as of end of May. June numbers will come out mid-August. What you've seen, and this may be a little bit of sign of encouragement, but China shipments started leveling out a little bit. We saw already a little bit of moderation in May and that's probably a logical result of the China tariffs kicked in fairly significantly, but the other Asian countries were just significantly increased. I would expect this with the 232 coming to effect and the additional country tariffs coming to effect, we would expect to see the same development also in the non-China Asian countries. Again, we expect and of course there's a lot of decision making happening by the administration and we've got to see what's happening the next couple of weeks. With the data points of sell-in data, industry sell-in, and where we have a pretty good understanding of overall sellout, we expect that. That's why I said earlier we would expect a significant amount of preloaded inventory. Certainly as of early June, we think there's quite a bit of inventory which was sold through July 4th. Of course, by definition, there's still quite a bit of inventory sitting out there. That's why we also said in Q3 we expect a similar but gradually improving environment and dynamics to what we experienced in Q2. Again, similar from a starting point, but with every month passing by and the tariffs becoming effective, we will see more of a normalization happening around us. Okay, yeah, that's really helpful color. Thank you, Marc. The second question I have is related in terms of the North America major margins. It seems like the new guide is kind of flatter. I think, I don't know if your comment about similar in 3Q just referenced the margin cadence. I think the prior guide was, you know, for a step up in the back half. I'm assuming the new guide is largely a function of this kind of preloading effect, but maybe you can just break down that change in the margin guidance and the implied back half cadence in North America. That would be great. Thanks, Michael. First of all, what you described is spot on. Yes, ultimately the adjustment of guidance is a direct reflection of continued delay for tariffs. Nothing has changed in fundamentals. We will be a net winner for tariffs. We introduce the largest amount of new products ever, and in the mid to long-term we will win in the housing environment. That has not changed. It's just all the positive effects from these free catalysts are delayed or slightly delayed. Of course, that is a drag on our margin. Certainly, Q3 and Q4 we got a theme. That's why you also see is we've given what I would call an unusual wide range of outcomes in the guidance. That's exactly because we can't right now foresee how rational the competitors will behave based on these tariff costs. I think even though Q3 is pretty, I mean we have a pretty good sense about where it's coming out, but the tell sign will be really what do we see in the market in September, October, and how Q4 turns out. Again, I want to reemphasize it's a delay, it's not a change of a fundamental investment story. The three reasons which I mentioned earlier I strongly, more passionately than ever before, believe in them. There are three fundamental critical catalysts for our growth in North America. Unfortunately, we're delayed more than we had originally in mind. Yeah. Just to add to that, Michael, I think obviously, as we've talked about with the additional imported inventory, it obviously has had an impact on the promotional environment, but also what that's impacted from our volume perspective is the leverage we get in our factories. As that eventually makes its way through, the system subsides, it allows us then to get better leverage in our factories. I'd say today the cost actions we're taking, we're seeing the benefits of, we're seeing benefits of many of the pricing actions we've taken. We're operating in an environment where the volumes are just under pressure with all the product that's been imported into the U.S. recently. Your next question comes from a line of Susan Maklari from Goldman Sachs. Your line is open. Thank you. Good morning, everyone. Good morning. My first question is looking at the SDA business, which had some really nice performance this quarter despite all the headwinds that you're facing there. Can you talk a bit about what has driven that and how you're thinking about the back half performance there, especially in terms of that segment margin? Yeah, Susan, it's Marc. First of all, obviously we're very pleased with the SDA performance year to date. We had a very strong Q1, we had a very strong Q2, and right now it looks like we will also have a very strong Q3. We feel very good about it. We have good momentum in the business. The two fundamental drivers are twofold. One is we're really benefiting from a new product, which we talked quite a bit here about Q4 last year and Q1, be it coffee makers, be it the rice and grain cooker, be it the portable appliances. We have really, really good momentum coming from a new product. Frankly, even our, call it, bread and butter stand mixer business is doing well despite a market which is not really growing. With new colors, new accessories, new bowls, it's a good business and we drive very strong product mixture. The second part is our direct to consumer business has been growing really nicely. This is, I would say, a business which is because everybody knows stand mixer and many other products, which is almost geared towards a direct consumer business. We've seen very strong growth in particular in North America, but also in Europe, where we already have a very significant portion of our business as direct to consumer business. These were the two fundamental catalysts for the strong first half. The reason why we're still, you know, it's the SDA nature is SDA is very back half loaded by definition. There's a significant amount of revenues just concentrated on Q3 and Q4, more so than in the majors business. That's why right now I take these first two quarters with a smile and let's see how the rest turns out. We still know we still have a big mountain to climb, just given the seasonality. I mean, I think, Susan, also just the margins that we have in that business right now really speak to the strength of the brand and the products. Obviously we're very excited about it. They've also had an impact of tariffs, whether it's exporting to other countries outside the U.S. stand mixers or products that they've brought in from Asia. Again, despite that, you look at that business and the margins are completely on track. I think that just goes back to tell you how strong that business really is. Yeah, okay, that's very helpful color. Maybe turning to capital allocation and the decision to recommend the board reduce the dividend. Can you just talk about how you're thinking of shareholder returns in this environment, how that factors into your priorities and maybe the path from here as you do start to delever the balance sheet further. Yes, Susan, I'll start off with that. First off, we remain committed to return cash to shareholders and we remain committed to our dividend and we also remain confident in our business. I think that's critical to really say, and this, as you heard in the prepared remarks, this was a deliberate action. We didn't take this in terms of a short term decision. We really looked at where we are, what our capital allocation priorities are, where we want to invest, that we want to continue to deleverage, but we also want to invest in our U.S. business because as you heard from Marc's comments, we really believe strongly in the U.S. housing market and that there will be a recovery here. Part of what we had to do is we had to look at not just the short term, but also what we want to invest for the long term. We felt at this time that reducing the dividend down to $3.60 on an annual basis is the right level. That's also very comparable to where we were in a pre-COVID environment on similar types of earnings. We feel it's the right level of return and we want to continue to return cash to shareholders. We also feel it fits best with where the business is right now and where our priorities are. Susan, maybe just smart from my perspective. Obviously, whenever you make the recommendation of a board to take the annual dividend back to pre-COVID level, it's not an easy decision. Ultimately, it comes down to we see a clear path to pre-COVID margins on the respective views, and that's what we've reflected. Keep in mind the existing annual dividend was set at the peak of COVID. Right now, we don't see a short-term path to COVID type of peak margins. Even more important, ultimately it's a decision for, it's not because the funding, as you heard from Jim before, we are well funded and I'm very pleased that we have this $1.2 billion funding behind us. It is ultimately about we want to create the financial capacity going forward. We're very confident about our business, but I want to have, frankly, I want to have capacity paying down debt. Frankly, also with the U.S. market shaping up the way we described earlier, next year will be very attractive to invest in the U.S., and we just want to create the capacity in our balance sheet. That is ultimately the key driver for the decision. Your next question comes from the line of Rafe Jadrosich from Bank of America.Your line is open. Hi, good morning. Thanks for taking my question. Morning Rafe. Morning Rafe. Can you talk about the sellout you saw in North America MDA in the second quarter and 3Q today, and maybe talk about Whirlpool versus the broader industry. It's Marc, let me just. Of course, as you know, there is no one data source in sellout. We have sellout data from our customers, and we have a pretty good sense for our balance of sale. That's how we try to calibrate it. In Q2, I would describe sellout to be at best flat, but it's probably more like -2%, -3%. In particular, we lost some share in April, May when we went ahead of promotion and price adjustments, probably ahead of our competitors, and we picked it up a little bit more towards the end of the quarter. Coming into July, we feel pretty good about where we are. The sellout in July, and again it's too early to say so far, is a positive one for us. We don't know exactly where the rest of competition sits, but right now it's in a market where certainly from a volume perspective it's probably best to still assume 0%-3%. That's how we also adjusted the industry guidance. There's one big caveat. Keep in mind the market may look reasonably okay from a unit perspective. The mix in the market is not a healthy one. It's a very strongly replacement-driven demand, and consumer sentiment just weighs on behalf of a mix of a product. That's why it's so critical that we launch all these new products because that's the ultimate lever how, despite a negative market mix trend, we can make a difference with a mix in our new products. Again, volume is one side. The mix which comes with volume is just not where we want to have it, and that's ultimately a reflection of a broader consumer sentiment and the existing home sales, which are just very low. Thank you, that's helpful. Can you just give an update on the India sale in terms of what the potential timing is, proceeds. Has the structure of it changed? What are you guys exploring there? Yeah, and Rafe, this is Jim and I'd say listen, from the last call till now there's been no significant change. We still anticipate the proceeds to be in the $550 million-$600 million type of range. We still expect to close by around the end of this year. We're in the middle of the process and we continue to narrow down the number of participants in the process just as a normal process would work and work with those potential purchasers. Right now we believe it's on track and nothing's really changed. We just continue to execute the process and hopefully by the next call we'll be able to give a further update around where that is and talking more about the possible closure. I think just for one additional point is on this one. The change has been about the expected closing of a transaction. The transaction as such, we're highly confident that it will materialize. Right now, in the updated guidance, we assume that the close would likely not technically happen in 2025 but would fall into 2026. We expect getting clarity on the transaction a lot earlier. Your next question comes from the line of Eric Bosshard from Cleveland Research.Your line is open. Thanks. Two things, if I could. The first one in the deck include a data point where the impact of tariffs you expect to offset with, I think, mostly price. I'm curious what you're seeing so far that gives you confidence that you'll be able to get the level of price that you're outlining to offset those tariffs. Yeah. So Eric, basically we largely already implemented the necessary pricing action with our promotion price increase and some list price increases in Q2. That's what I was referring to earlier. What needed to be done to offset the tariffs we technically put in place right now is somewhat matched by that positive impact because we lost some mix in Q2. The mix has been very unhealthy. You have two offsetting items. One, we see a positive impact from all the actions which we've done in promotional price adjustments and list price increases. The negative is a little bit of a downside mix. Again, in terms of the actions that need to be done, we largely factored in and basically executed or are executing what needs to be done in Q2. This is also in the context of still a globally uncertain final tariff outcome. This does not mean that we might not have to take action down the road, but right now we feel good about where we are from pricing actions. I think on top of that too is to highlight it's not just pricing that we're taking to offset that. We're taking cost actions, we're looking at supply sourcing and other things. We're going back to our suppliers with an expectation to be able to find solutions to these increased tariff costs. Okay. I understand you've talked a lot about the noise of preloading and the impact that has. I guess excluding the impact of tariffs. Which seems like it's not really in place right now. Your North American share is contracting. I guess the protection of the tariffs are coming. Excluding that or in advance of that, why is your share not performing better? Why is your share performing like it is? Eric, first of all, as I alluded to earlier, we lost in Q2 in April, May, some share. Just to put in context, that's less than a point of share, which we lost. At the end of June, we kind of rebalanced and we're stabilizing. Of course, we absolutely do not want to lose share and we will not lose share on a full-year based period. We're very confident that largely the confidence also comes not only because of tariffs, but because of all the new products. We feel very good about the tools which we have in place. By definition, you have a huge amount of preloaded inventory which puts a lot of promotion pressure. As we said before, we will not participate in every promotion and there have been a number of promotions out there that, there's no question in my mind, did not create value for the retailer or the respective competitor, period. We will not participate in that. If somebody wins a little bit of temporary share, I look at it more like, for lack of a better expression, I look at it more, yeah, we're built on quicksand. I don't need quicksand. We need structural market share which comes with good and healthy brands and products. That's what we focus on. Your next question comes from the line of Michael Rehaut from JPMorgan. Your line is open. Hi, good morning. This is Alex Isaac on from Mike, thanks for taking my questions. First thing, on the demand side, with the revision downward of your demand expectations, can you sort of give some more granular details into what's driving those across regions and how should we see this trending into the rest of the year and into 2016? Do you feel it's more transitory or are these more longer term demand headwinds? Yeah, Alex, our revision on the industry guidance, which by the use has different reasons, I would say in North America it's largely driven by consumer sentiment. You look at any data source out there, consumer sentiment is just not in a good place. Consumers like investors don't like uncertainty, unpredictability and various possible outcomes. That is right now weighing heavily on consumer mind. The good thing is, and that's why this could change, we've seen in other periods consumer sentiment moves a lot faster than many other dynamics. Consumer sentiment can move in two or three months significantly. A lot will depend on the macro news, which people will see. We should not lose sight of consumer sit on a lot of home equity. That's a fact. The home equity, which still makes up a lot of consumer wealth, is in a good state. Consumers would have the wealth and the equity to invest more in the home. Right now we're holding a little bit back. I'm not trying to be overly optimistic, but these things change faster than many other macroeconomic. The other region is slightly different, I think within LAR and Latin America we've seen more broader slowdown. The economy both in Brazil, but to some extent Mexico. That is not just consumer sentiment. It's just a broader slowdown, not a bad environment, it's just slowing down. In Asia, to Jim's earlier point, particularly India, it's so much driven by the seasonal patterns of weather. You had last year very strong Q2 from pure weather perspective. This year turned out very differently. That's why we're kind of a little bit cautious more on the Asia outlook. It's more completely different dynamics. I know it sounds trivial but it's Beverly related and how hot it gets that has a big impact on that outlook. Small domestic appliance are a little bit on their own in terms of a macroeconomic perspective. I would say in general terms, more than any other category, are strongly driven by consumer sentiment because it's ultimately, yes, there's some replacement demand, but it's a very strongly discretionary demand-driven cycle. Here, we're a little bit more cautious. Also, the same applies to what I said earlier: the big seasonal SDA is coming, and it will be very important to see how consumer sentiment does around the September-October timeline because that will shape the industry perspective to a very large extent. Thanks. Appreciate all the color on that. To dig in on SDA, I just wanted to know if you could share some more details on direct to consumer and what percentage of that is made up of SDA, and then also how the margin profile varies between direct to consumer sales versus the overall segment? Yeah. Alex, we typically don't publish or communicate the details of a D2C business versus the rest. Let me help you calibrate a little bit. As a company, our direct-to-consumer business is in the mid to high single-digits, but with big differences across the different segments by a long shot. The highest direct-to-consumer business we have is in our Latin America business and small domestic appliances. You should ballpark getting probably close to a quarter of the business, so it's very healthy. It will never replace our business with good and established retailers. Frankly, we know there's a segment of consumers who just like to buy directly from a manufacturer. This is not in competition with our retailers. We respect our retailers. We need our retailers. It is a complement and a supplement, in particular on the products where most people know stand mixer, so it's perfect for this one. The margin structure is not completely different, but let me put, it's an attractive business for us largely also. It comes by definition with a higher revenue base, and it's still a pretty healthy margin level. As you all understand the mechanics of a direct-to-consumer business, you have quite a bit of fixed cost which comes with consumer search and buying from search. The higher revenue base, the more profitable it becomes. Your final question comes from the line of Josh Wilson from Raymond James.Your line is open. Good morning. Filling in for Sam Darkatsh. Thanks for taking my question. Squeezing me in. Good morning, Josh. Morning. For my first question, could you talk a little more about your assumptions for North American market share and how that's changed from a quarter ago. I know you were expecting to gain share in the second half, and now with the delays in channel inventory headwinds, does that mean like flattish share in the third quarter and bigger gains in the fourth quarter, or how are you calibrating the cadence there, Josh? In general terms, we expect the same. That is, we expect a healthy share level in the second half driven largely by the new product introductions. Keep in mind, every quarter we have more products, new products being floored. The second point is, as I mentioned earlier, we took the necessary pricing action, promotion levels in Q2. Some competitors didn't do it. They will have to catch up at one point to deal with the cost. I think that will create more of a level playing field and allows us to kind of pick up some market share. We feel good about plans for second half market share and we have no intention whatsoever to concede market share easily. As it relates to the dividend change, could you talk about what? Has changed either in your plans or the environment that catalyzed you to make the decision now versus three, six months ago? Yeah, and this is Jim and I would say, you know, Josh, again, probably three, six months ago, we really looked at the environment. We said there was a lot to it that we still wanted to see and understand better. We wanted to see how the tariffs rolled out. We wanted to see the impact it would have on volumes. Again, as I said, we remain confident in the business, remain committed to the dividend, but we just thought it was very prudent to really understand the environment better and then make the right appropriate, deliberate capital allocation decision. As we said, this is as much about us looking at wanting to increase the capacity within our balance sheet, but also to create the ability to invest further in our U.S. manufacturing footprint. We really do believe, based on what Marc said earlier, in the actions that the administration is taking, this can set us up to win. We wanted to create that additional capacity and we felt this was the right time. I think with that we come to the end of a Q&A session. First of all, I want to thank you all for joining us today. Obviously, you heard a lot of details today. I think the important thing really as a key takeaway is, of course, a company like ours, we don't take an adjustment of our guidance easily. I'm the first one to admit it. At the same time, hopefully you heard all today we are very confident and nothing has changed about the investment thesis. It's not just relying on the fact that we will be net winners of a tariff environment. It is largely coming from a confidence and feedback we get on our new products. Nothing has changed in our mid to long term perspective on housing markets. If you want to say so, the investment thesis is as strong as ever, but we felt it appropriate and prudent to adjust the guidance to reflect the delays of certain effects which positively impact our business. With that, again, thank you all and we will talk to each other during the next earnings call. Thanks a lot. Ladies and gentlemen, that concludes today's conference call. You may now disconnect.

Speaker 10: Good morning and welcome to Whirlpool Corporation second quarter 2025 earnings call. Today's call is being recorded. Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer, and Jim Peters, our Chief Financial and Administrative Officer. Our remarks today track with a presentation available on the Investor section of our website at whirlpoolcorp.com. Before we begin, I want to remind you that as we conduct this call, we will be making forward-looking statements to assist you in better understanding Whirlpool Corporation's future expectations. Our actual results could differ materially from these statements due to many factors discussed in our latest 10-K, 10-Q, and other periodic reports. We also want to remind you that today's presentation includes the non-GAAP measures outlined in further detail at the beginning of our earnings presentation. Good morning and welcome to Whirlpool Corporation second quarter 2025 earnings call. good morning and welcome to whirlpool corporation second quarter 2025 earnings call Today's call is being recorded. today's call is being recorded Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer, and Jim Peters, our Chief Financial and Administrative Officer. joining me today are marc bitzer our chairman and chief executive officer and jim peters our chief financial and administrative officer Our remarks today track with a presentation available on the Investor section of our website at whirlpoolcorp.com. our remarks today track with a presentation available on the investor section of our website at whirlpoolcorp.com Before we begin, I want to remind you that as we conduct this call, we will be making forward-looking statements to assist you in better understanding Whirlpool Corporation's future expectations. before we begin i want to remind you that as we conduct this call we will be making forward-looking statements to assist you in better understanding whirlpool corporation's future expectations Our actual results could differ materially from these statements due to many factors discussed in our latest 10-K, 10-Q, and other periodic reports. our actual results could differ materially from these statements due to many factors discussed in our latest 10-k 10-q and other periodic reports We also want to remind you that today's presentation includes the non-GAAP measures outlined in further detail at the beginning of our earnings presentation. we also want to remind you that today's presentation includes the non-gaap measures outlined in further detail at the beginning of our earnings presentation We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the Investor Relations section of our website for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. At this time, all participants are in listen-only mode. Following our prepared remarks, the call will be open for analyst questions. As a reminder, we ask that participants ask no more than two questions. With that, I'll turn the call over to Marc. We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. we believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations We also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations. we also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations Listeners are directed to the supplemental information package posted on the Investor Relations section of our website for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. listeners are directed to the supplemental information package posted on the investor relations section of our website for the reconciliation of non-gaap items to the most directly comparable gaap measures At this time, all participants are in listen-only mode. at this time all participants are in listen-only mode Following our prepared remarks, the call will be open for analyst questions. following our prepared remarks the call will be open for analyst questions As a reminder, we ask that participants ask no more than two questions. as a reminder we ask that participants ask no more than two questions With that, I'll turn the call over to Marc. with that i'll turn the call over to marc

Speaker 2: Thanks, Scott, and good morning, everyone. As expected, we navigated the challenging second quarter and continue to operate in an increasingly complex external environment. The macroeconomic uncertainty, marked by elevated interest rates and evolving trade policies, negatively impacted consumer sentiment. In particular, weakness of consumer sentiment not only suppressed demand, but also impacted itself as we continue to see consumers choosing to mix into lower end products. Furthermore, with recent delays in tariff implementation, Asian competitors are not yet experiencing the full cost of tariffs and have continued to increase their imports ahead of the tariffs. In fact, we estimate that during the first half of this year, the amount of Asian appliance imports will approach the highest level on record. Needless to say, this preloading has created significant short-term disruption, adding to the promotional intensity throughout the second quarter. Thanks, Scott, and good morning, everyone. thanks scott and good morning everyone As expected, we navigated the challenging second quarter and continue to operate in an increasingly complex external environment. as expected we navigated the challenging second quarter and continue to operate in an increasingly complex external environment The macroeconomic uncertainty, marked by elevated interest rates and evolving trade policies, negatively impacted consumer sentiment. the macroeconomic uncertainty marked by elevated interest rates and evolving trade policies negatively impacted consumer sentiment In particular, weakness of consumer sentiment not only suppressed demand, but also impacted itself as we continue to see consumers choosing to mix into lower end products. in particular weakness of consumer sentiment not only suppressed demand but also impacted itself as we continue to see consumers choosing to mix into lower end products Furthermore, with recent delays in tariff implementation, Asian competitors are not yet experiencing the full cost of tariffs and have continued to increase their imports ahead of the tariffs. furthermore with recent delays in tariff implementation asian competitors are not yet experiencing the full cost of tariffs and have continued to increase their imports ahead of the tariffs In fact, we estimate that during the first half of this year, the amount of Asian appliance imports will approach the highest level on record. in fact we estimate that during the first half of this year the amount of asian appliance imports will approach the highest level on record Needless to say, this preloading has created significant short-term disruption, adding to the promotional intensity throughout the second quarter. needless to say this preloading has created significant short-term disruption adding to the promotional intensity throughout the second quarter We are well-positioned to win over time and are confident these effects are temporary in nature. However, it has become clear that they will extend well into the third quarter, putting pressure on short-term margin expansion. Despite these macro challenges, we still delivered sequential net sales growth across all segments in the second quarter and very strong results in our SDA Global business driven by our exciting new products. Given the prolonged loading impact by competitors and the lack of consumer confidence in the marketplace, we are updating our full-year guidance. As we expect the full impact of tariffs to kick in later this year and these temporary negative effects to subside, we are confident that we will see meaningful improvement in the MDA North American business heading into next year. Our perspective has not changed, but Whirlpool will be a net beneficiary from these new tariff policies. We are well-positioned to win over time and are confident these effects are temporary in nature. we are well-positioned to win over time and are confident these effects are temporary in nature However, it has become clear that they will extend well into the third quarter, putting pressure on short-term margin expansion. however it has become clear that they will extend well into the third quarter putting pressure on short-term margin expansion Despite these macro challenges, we still delivered sequential net sales growth across all segments in the second quarter and very strong results in our SDA Global business driven by our exciting new products. despite these macro challenges we still delivered sequential net sales growth across all segments in the second quarter and very strong results in our sda global business driven by our exciting new products Given the prolonged loading impact by competitors and the lack of consumer confidence in the marketplace, we are updating our full-year guidance. given the prolonged loading impact by competitors and the lack of consumer confidence in the marketplace we are updating our full-year guidance As we expect the full impact of tariffs to kick in later this year and these temporary negative effects to subside, we are confident that we will see meaningful improvement in the MDA North American business heading into next year. as we expect the full impact of tariffs to kick in later this year and these temporary negative effects to subside we are confident that we will see meaningful improvement in the mda north american business heading into next year Our perspective has not changed, but Whirlpool will be a net beneficiary from these new tariff policies. our perspective has not changed but whirlpool will be a net beneficiary from these new tariff policies We are structurally positioned to win in this environment and believe we are operating from a position of strength driven by a strong domestic footprint. Irrespective of the external challenges, we will stay focused on what we control. We successfully implemented pricing actions, we structurally drove cost out of our business, and we strengthened our balance sheet with our recent debt refinancing. Putting it all together, our investment case remains as strong as ever and we see a credible pathway for improvement in our results. One, we are excited about the extensive portfolio of new products we're introducing this year, the largest number in more than a decade. Two, we are a clear beneficiary of structural shifts in trade policy, and three, our leadership position with U.S. home builders and our deep relationship with national accounts position us to benefit from eventual recovery in the U.S. housing market. We are structurally positioned to win in this environment and believe we are operating from a position of strength driven by a strong domestic footprint. we are structurally positioned to win in this environment and believe we are operating from a position of strength driven by a strong domestic footprint Irrespective of the external challenges, we will stay focused on what we control. irrespective of the external challenges we will stay focused on what we control We successfully implemented pricing actions, we structurally drove cost out of our business, and we strengthened our balance sheet with our recent debt refinancing. we successfully implemented pricing actions we structurally drove cost out of our business and we strengthened our balance sheet with our recent debt refinancing Putting it all together, our investment case remains as strong as ever and we see a credible pathway for improvement in our results. putting it all together our investment case remains as strong as ever and we see a credible pathway for improvement in our results One, we are excited about the extensive portfolio of new products we're introducing this year, the largest number in more than a decade. one, we are excited about the extensive portfolio of new products we're introducing this year the largest number in more than a decade Two, we are a clear beneficiary of structural shifts in trade policy, and three, our leadership position with U.S. home builders and our deep relationship with national accounts position us to benefit from eventual recovery in the U.S. housing market. two we are a clear beneficiary of structural shifts in trade policy and three our leadership position with u.s home builders and our deep relationship with national accounts position us to benefit from eventual recovery in the u.s housing market Whirlpool is well-positioned to deliver sustained long term value, and we have every confidence we will do so. Turning to slide six, I will provide an overview of our second quarter results. Negative consumer sentiment that impacted global industry demand in the second quarter led to a 3% decline in net sales excluding currency. Despite the challenging demand environment, we continue to see strong growth in our SDA Global business. Global EBIT margins held steady year-over-year at 5.3% despite significant currency headwinds, primarily from a weakening Brazilian real. Our free cash flow was unfavorable versus prior year by approximately $140 million, driven by the seasonal inventory build. Ultimately, we delivered ongoing EPS of $1.34, which was negatively impacted by approximately $0.35 from a non-cash loss associated with our minority interest in Beko Europe B.V., b.v. Whirlpool is well- positioned to deliver sustained long term value, and we have every confidence we will do so. whirlpool is well- positioned to deliver sustained long term value and we have every confidence we will do so Turning to slide six, I will provide an overview of our second quarter results. turning to slide six i will provide an overview of our second quarter results Negative consumer sentiment that impacted global industry demand in the second quarter led to a 3% decline in net sales excluding currency. negative consumer sentiment that impacted global industry demand in the second quarter led to a 3% decline in net sales excluding currency Despite the challenging demand environment, we continue to see strong growth in our SDA Global business. despite the challenging demand environment we continue to see strong growth in our sda global business Global EBIT margins held steady year-over-year at 5.3% despite significant currency headwinds, primarily from a weakening Brazilian real. global ebit margins held steady year-over-year at 5.3% despite significant currency headwinds primarily from a weakening brazilian real Our free cash flow was unfavorable versus prior year by approximately $140 million, driven by the seasonal inventory build. our free cash flow was unfavorable versus prior year by approximately $140 million driven by the seasonal inventory build Ultimately, we delivered ongoing EPS of $1.34, which was negatively impacted by approximately $0.35 from a non-cash loss associated with our minority interest in Beko Europe B.V., b.v. ultimately we delivered ongoing eps of $1.34 which was negatively impacted by approximately $0.35 from a non-cash loss associated with our minority interest in beko europe b.v., b.v Turning to slide seven, I will provide an overview of our second quarter ongoing EBIT margin drivers. Price mix favorably impacted margin by 25 basis points. This was slightly below our expectations as the preloading of Asian imports sustained an intense promotional environment. Additionally, weakened consumer confidence pushed mix down further in an environment that was already largely replacement driven. As expected, our cost takeout actions delivered margin expansion of 100 basis points year-over-year, led by our continued manufacturing and supply chain efficiencies and our organizational simplification actions. As expected, raw materials were essentially flat. In the second quarter, we began to experience the increased cost associated with tariff implementation at approximately 50 basis points. While overall marketing and technology was flat versus prior year, we have continued to invest in our new products. Turning to slide seven, I will provide an overview of our second quarter ongoing EBIT margin drivers. turning to slide seven i will provide an overview of our second quarter ongoing ebit margin drivers Price mix favorably impacted margin by 25 basis points. price mix favorably impacted margin by 25 basis points This was slightly below our expectations as the preloading of Asian imports sustained an intense promotional environment. this was slightly below our expectations as the preloading of asian imports sustained an intense promotional environment Additionally, weakened consumer confidence pushed mix down further in an environment that was already largely replacement driven. additionally weakened consumer confidence pushed mix down further in an environment that was already largely replacement driven As expected, our cost takeout actions delivered margin expansion of 100 basis points year-over-year, led by our continued manufacturing and supply chain efficiencies and our organizational simplification actions. as expected our cost takeout actions delivered margin expansion of 100 basis points year-over-year led by our continued manufacturing and supply chain efficiencies and our organizational simplification actions As expected, raw materials were essentially flat. as expected raw materials were essentially flat In the second quarter, we began to experience the increased cost associated with tariff implementation at approximately 50 basis points. in the second quarter we began to experience the increased cost associated with tariff implementation at approximately 50 basis points While overall marketing and technology was flat versus prior year, we have continued to invest in our new products. while overall marketing and technology was flat versus prior year we have continued to invest in our new products In the second quarter, the Brazilian real and Mexican peso depreciated compared to prior year, resulting in an unfavorable margin impact of 50 basis points. We also experienced approximately $90 million of unfavorable non-cash impact from our minority stake in Beko Europe B.V.. Ultimately, we maintained flat margins year-over-year despite the challenging global macroeconomic environment. I will now turn it over to Jim to review the second quarter segment results. In the second quarter, the Brazilian real and Mexican peso depreciated compared to prior year, resulting in an unfavorable margin impact of 50 basis points. in the second quarter the brazilian real and mexican peso depreciated compared to prior year resulting in an unfavorable margin impact of 50 basis points We also experienced approximately $90 million of unfavorable non-cash impact from our minority stake in Beko Europe B.V.. we also experienced approximately $90 million of unfavorable non-cash impact from our minority stake in beko europe b.v Ultimately, we maintained flat margins year-over-year despite the challenging global macroeconomic environment. ultimately we maintained flat margins year-over-year despite the challenging global macroeconomic environment I will now turn it over to Jim to review the second quarter segment results. i will now turn it over to jim to review the second quarter segment results

Speaker 5: Thanks, Marc. Good morning, everyone. Turning to slide eight, I'll review the second quarter results for our MDA North America business. Net sales were down 5% year-over-year as we continue to experience a challenging macroeconomic environment. In the U.S., consumer sentiment remains weak as a result of the economic uncertainty and evolving tariff policies. As Marc stated, the significant preloading of Asian imports from foreign competitors due to the delay in tariff implementation caused the promotional intensity to persist. In the first half, we saw Asian imports up over 20% while the industry was down despite being propped up by the inventory loading. All this is effectively delaying the impact of tariffs on appliances being imported by our foreign competitors well into the second half of this year. Thanks, Marc. thanks marc Good morning, everyone. good morning everyone Turning to slide eight, I'll review the second quarter results for our MDA North America business. turning to slide eight i'll review the second quarter results for our mda north america business Net sales were down 5% year-over-year as we continue to experience a challenging macroeconomic environment. net sales were down 5% year-over-year as we continue to experience a challenging macroeconomic environment In the U.S., consumer sentiment remains weak as a result of the economic uncertainty and evolving tariff policies. in the u.s consumer sentiment remains weak as a result of the economic uncertainty and evolving tariff policies As Marc stated, the significant preloading of Asian imports from foreign competitors due to the delay in tariff implementation caused the promotional intensity to persist. as marc stated the significant preloading of asian imports from foreign competitors due to the delay in tariff implementation caused the promotional intensity to persist In the first half, we saw Asian imports up over 20% while the industry was down despite being propped up by the inventory loading. in the first half we saw asian imports up over 20% while the industry was down despite being propped up by the inventory loading All this is effectively delaying the impact of tariffs on appliances being imported by our foreign competitors well into the second half of this year. all this is effectively delaying the impact of tariffs on appliances being imported by our foreign competitors well into the second half of this year Despite these challenges, MDA North America delivered an EBIT margin of approximately 6% with strong cost takeout actions offset by lower volume and unfavorable product mix. While we continue to experience a choppy macroeconomic environment, we are confident in our growth potential for North America. Turning to slide nine, I'll review the results for our MDA Latin America business. In the second quarter, MDA Latin America experienced a net sales decline of 1% year-over-year excluding currency, with implemented pricing actions offset by double-digit negative consumer demand. In Mexico, the segment delivered a solid EBIT margin of 6% with favorable price mix and cost actions driving approximately 20 basis points of expansion year-over-year. Turning to slide 10, I'll review the results for our MDA Asia business. Despite these challenges, MDA North America delivered an EBIT margin of approximately 6% with strong cost takeout actions offset by lower volume and unfavorable product mix. despite these challenges mda north america delivered an ebit margin of approximately 6% with strong cost takeout actions offset by lower volume and unfavorable product mix While we continue to experience a choppy macroeconomic environment, we are confident in our growth potential for North America. while we continue to experience a choppy macroeconomic environment we are confident in our growth potential for north america Turning to slide nine, I'll review the results for our MDA Latin America business. turning to slide nine i'll review the results for our mda latin america business In the second quarter, MDA Latin America experienced a net sales decline of 1% year-over-year excluding currency, with implemented pricing actions offset by double-digit negative consumer demand. in the second quarter mda latin america experienced a net sales decline of 1% year-over-year excluding currency with implemented pricing actions offset by double-digit negative consumer demand In Mexico, the segment delivered a solid EBIT margin of 6% with favorable price mix and cost actions driving approximately 20 basis points of expansion year-over-year. in mexico the segment delivered a solid ebit margin of 6% with favorable price mix and cost actions driving approximately 20 basis points of expansion year-over-year Turning to slide 10, I'll review the results for our MDA Asia business. turning to slide 10 i'll review the results for our mda asia business In the second quarter, MDA Asia saw a net sales decline of 4% year-over-year excluding currency, driven by industry decline partially offset by continued strong share gains. The segment delivered over 7% EBIT margin in the quarter with 90 basis points of year-over-year margin expansion from continued cost takeout actions. Our Asia business continues to operate well, overcoming the geopolitical tensions in the second quarter and delivering substantial margin expansion and share gains. Turning to slide 11, I'll review the results of our SDA Global business. The segment delivered another strong quarter with net sales growth of 8% year-over-year driven by direct-to-consumer sales growth. Despite a declining industry in North America, we continue to see growth and margin expansion from our recent product launches in high-growth categories including our semi- and fully-automatic espresso machines. In the second quarter, MDA Asia saw a net sales decline of 4% year-over-year excluding currency, driven by industry decline partially offset by continued strong share gains. in the second quarter mda asia saw a net sales decline of 4% year-over-year excluding currency driven by industry decline partially offset by continued strong share gains The segment delivered over 7% EBIT margin in the quarter with 90 basis points of year-over-year margin expansion from continued cost takeout actions. the segment delivered over 7% ebit margin in the quarter with 90 basis points of year-over-year margin expansion from continued cost takeout actions Our Asia business continues to operate well, overcoming the geopolitical tensions in the second quarter and delivering substantial margin expansion and share gains. our asia business continues to operate well overcoming the geopolitical tensions in the second quarter and delivering substantial margin expansion and share gains Turning to slide 11, I'll review the results of our SDA Global business. turning to slide 11 i'll review the results of our sda global business The segment delivered another strong quarter with net sales growth of 8% year-over-year driven by direct-to-consumer sales growth. the segment delivered another strong quarter with net sales growth of 8% year-over-year driven by direct-to-consumer sales growth Despite a declining industry in North America, we continue to see growth and margin expansion from our recent product launches in high-growth categories including our semi- and fully-automatic espresso machines. despite a declining industry in north america we continue to see growth and margin expansion from our recent product launches in high-growth categories including our semi- and fully-automatic espresso machines The SDA Global business is well-positioned to continue to deliver significant growth in the second half of the year, which typically accounts for two-thirds of annual demand. Now I will turn the call over to Marc to provide an overview of North America's growth catalysts. The SDA Global business is well-positioned to continue to deliver significant growth in the second half of the year, which typically accounts for two-thirds of annual demand. the sda global business is well-positioned to continue to deliver significant growth in the second half of the year which typically accounts for two-thirds of annual demand Now I will turn the call over to Marc to provide an overview of North America's growth catalysts. now i will turn the call over to marc to provide an overview of north america's growth catalysts

Speaker 2: Thanks, Jim. Turning to slide 13, we outline why North America is well-positioned to unlock significant value creation. As mentioned before, there are three fundamental components that serve as catalysts for growth of our North America business. First, we strengthen our leading brand and product portfolio with over 30% of our North American products transitioning to new products in 2025. For context, this is our largest product portfolio refresh in over a decade. Our trade customers have responded very positively to the new product innovations we're launching this year, resulting in gaining a significant number of new floor spots. While the new product launches are taking place throughout 2025, we expect to see the biggest impact from our new KitchenAid suite launch, which starts shipping late September. Secondly, our strong U.S.-based manufacturing footprint positions us as net winners of our new tariff and trade policies. Thanks, Jim. thanks jim Turning to slide 13, we outline why North America is well-positioned to unlock significant value creation. turning to slide 13 we outline why north america is well-positioned to unlock significant value creation As mentioned before, there are three fundamental components that serve as catalysts for growth of our North America business. as mentioned before there are three fundamental components that serve as catalysts for growth of our north america business First, we strengthen our leading brand and product portfolio with over 30% of our North American products transitioning to new products in 2025. first we strengthen our leading brand and product portfolio with over 30% of our north american products transitioning to new products in 2025 For context, this is our largest product portfolio refresh in over a decade. for context this is our largest product portfolio refresh in over a decade Our trade customers have responded very positively to the new product innovations we're launching this year, resulting in gaining a significant number of new floor spots. our trade customers have responded very positively to the new product innovations we're launching this year resulting in gaining a significant number of new floor spots While the new product launches are taking place throughout 2025, we expect to see the biggest impact from our new KitchenAid suite launch, which starts shipping late September. while the new product launches are taking place throughout 2025 we expect to see the biggest impact from our new kitchenaid suite launch which starts shipping late september Secondly, our strong U.S.-based manufacturing footprint positions us as net winners of our new tariff and trade policies. secondly our strong u.s.-based manufacturing footprint positions us as net winners of our new tariff and trade policies In an industry where most competitors are largely importers of major domestic appliances, eight in 10 products Whirlpool sells in the U.S. are made in the U.S. Furthermore, the majority of our raw materials and components are also domestically sourced, with over 96% of the steel used in our U.S. factories sourced from us. With our larger domestic production footprint, we are uniquely positioned in the appliance industry and the current economic landscape. Based on the announcements in effect as of today, we expect that foreign competitors will begin to experience the full implications of tariffs in appliances as they sell down their preloaded inventory in the back half of 2025. Lastly, turning to the U.S. housing market, we continue to see strong underlying fundamentals that point to a likely multi-year recovery. The industry has been experiencing multi-decade lows in existing home sales as mortgage rates have remained elevated. In an industry where most competitors are largely importers of major domestic appliances, eight in 10 products Whirlpool sells in the U.S. are made in the U.S. in an industry where most competitors are largely importers of major domestic appliances eight in 10 products whirlpool sells in the u.s are made in the u.s Furthermore, the majority of our raw materials and components are also domestically sourced, with over 96% of the steel used in our U.S. factories sourced from us. furthermore the majority of our raw materials and components are also domestically sourced with over 96% of the steel used in our u.s factories sourced from us With our larger domestic production footprint, we are uniquely positioned in the appliance industry and the current economic landscape. with our larger domestic production footprint we are uniquely positioned in the appliance industry and the current economic landscape Based on the announcements in effect as of today, we expect that foreign competitors will begin to experience the full implications of tariffs in appliances as they sell down their preloaded inventory in the back half of 2025. based on the announcements in effect as of today we expect that foreign competitors will begin to experience the full implications of tariffs in appliances as they sell down their preloaded inventory in the back half of 2025 Lastly, turning to the U.S. housing market, we continue to see strong underlying fundamentals that point to a likely multi-year recovery. lastly turning to the u.s housing market we continue to see strong underlying fundamentals that point to a likely multi-year recovery The industry has been experiencing multi-decade lows in existing home sales as mortgage rates have remained elevated. the industry has been experiencing multi-decade lows in existing home sales as mortgage rates have remained elevated This is also shaping the profile of major appliance demand, which has seen discretionary demand contract by 10 points as existing home sales tend to be the primary driver of discretionary demand. While we're not assuming a housing market recovery in 2025, we believe in the mid to long term fundamentals and our position to capitalize on missed opportunity. Simply put, there is no company better positioned to benefit from eventual housing market recovery than Whirlpool. Now, turning to slide 14, I would like to highlight some of the exciting new product launches. Let me start with our innovative downdraft induction cooktops from JennAir. As you might know, the downdraft cooktop is the heritage product of a JennAir super premium brand. What is new is the unique combination of induction technology with the most advanced and most powerful downdraft system, which we developed jointly with a leading European downdraft company. This is also shaping the profile of major appliance demand, which has seen discretionary demand contract by 10 points as existing home sales tend to be the primary driver of discretionary demand. this is also shaping the profile of major appliance demand which has seen discretionary demand contract by 10 points as existing home sales tend to be the primary driver of discretionary demand While we're not assuming a housing market recovery in 2025, we believe in the mid to long term fundamentals and our position to capitalize on missed opportunity. while we're not assuming a housing market recovery in 2025 we believe in the mid to long term fundamentals and our position to capitalize on missed opportunity Simply put, there is no company better positioned to benefit from eventual housing market recovery than Whirlpool. simply put there is no company better positioned to benefit from eventual housing market recovery than whirlpool Now, turning to slide 14, I would like to highlight some of the exciting new product launches. now turning to slide 14 i would like to highlight some of the exciting new product launches Let me start with our innovative downdraft induction cooktops from JennAir. let me start with our innovative downdraft induction cooktops from jennair As you might know, the downdraft cooktop is the heritage product of a JennAir super premium brand. as you might know the downdraft cooktop is the heritage product of a jennair super premium brand What is new is the unique combination of induction technology with the most advanced and most powerful downdraft system, which we developed jointly with a leading European downdraft company. what is new is the unique combination of induction technology with the most advanced and most powerful downdraft system which we developed jointly with a leading european downdraft company Apart from the obvious benefits of a downdraft like faster, more effective extraction and an unobstructed view, this product can be installed without a duct, which offers a great replacement demand opportunity. Based on what we learned from Europe, that this product is leading in the marketplace by value, we believe there's significant growth opportunity in the U.S. as well. On slide 15, you see a picture of our all new KitchenAid suite, which starts shipping end of September. To put this in context, the last time we introduced an all new KitchenAid suite was in 2015, and this line of products represents over $1 billion of business. Beyond the modern and advanced design, this line will be unique in its personalization opportunity. The personalization comes from a combination of interchangeable colors, handles, and knobs, which actually can be changed at the customer's home. Apart from the obvious benefits of a downdraft like faster, more effective extraction and an unobstructed view, this product can be installed without a duct, which offers a great replacement demand opportunity. apart from the obvious benefits of a downdraft like faster more effective extraction and an unobstructed view this product can be installed without a duct which offers a great replacement demand opportunity Based on what we learned from Europe, that this product is leading in the marketplace by value, we believe there's significant growth opportunity in the U.S. as well. based on what we learned from europe that this product is leading in the marketplace by value we believe there's significant growth opportunity in the u.s as well On slide 15, you see a picture of our all new KitchenAid suite, which starts shipping end of September. on slide 15 you see a picture of our all new kitchenaid suite which starts shipping end of september To put this in context, the last time we introduced an all new KitchenAid suite was in 2015, and this line of products represents over $1 billion of business. to put this in context the last time we introduced an all new kitchenaid suite was in 2015 and this line of products represents over $1 billion of business Beyond the modern and advanced design, this line will be unique in its personalization opportunity. beyond the modern and advanced design this line will be unique in its personalization opportunity The personalization comes from a combination of interchangeable colors, handles, and knobs, which actually can be changed at the customer's home. the personalization comes from a combination of interchangeable colors handles and knobs which actually can be changed at the customer's home We introduced this new line to the design and builder community a few months ago, and the response has been remarkably strong with hundreds of new floor spots gained. Lastly, on slide 16, we show you our new Maytag Pet Top Load laundry. You might recall that our Pet Pro technology has been hugely successful in the top load agitator segment. We're now bringing this innovation also to the impeller top load machines, which tend to be more in the premium segment of the marketplace. It is an industry first technology, and the Maytag brand has all the credibility in getting the top job done to launch this innovation. Turning to slide 17, we'll discuss the tariff landscape for appliance importers into the U.S. This slide summarizes the relevant tariff actions taken by the administration and illustrates the estimated tariff rates as a percentage of total product value. We introduced this new line to the design and builder community a few months ago, and the response has been remarkably strong with hundreds of new floor spots gained. we introduced this new line to the design and builder community a few months ago and the response has been remarkably strong with hundreds of new floor spots gained Lastly, on slide 16, we show you our new Maytag Pet Top Load laundry. lastly on slide 16 we show you our new maytag pet top load laundry You might recall that our Pet Pro technology has been hugely successful in the top load agitator segment. you might recall that our pet pro technology has been hugely successful in the top load agitator segment We're now bringing this innovation also to the impeller top load machines, which tend to be more in the premium segment of the marketplace. we're now bringing this innovation also to the impeller top load machines which tend to be more in the premium segment of the marketplace It is an industry first technology, and the Maytag brand has all the credibility in getting the top job done to launch this innovation. it is an industry first technology and the maytag brand has all the credibility in getting the top job done to launch this innovation Turning to slide 17, we'll discuss the tariff landscape for appliance importers into the U.S. turning to slide 17 we'll discuss the tariff landscape for appliance importers into the u.s This slide summarizes the relevant tariff actions taken by the administration and illustrates the estimated tariff rates as a percentage of total product value. this slide summarizes the relevant tariff actions taken by the administration and illustrates the estimated tariff rates as a percentage of total product value Assuming rates as of today and the August 1 reciprocal tariffs, you can see in the table how the various tariffs, including Section 232 in steel content, Section 301 specific components and finished goods, and the reciprocal IIPA tariffs from various countries, impact appliance imports while the overall tariff picture is still fluid. A 44% tariff on Chinese products and a 16% tariff on finished goods from other Asian countries should substantially impact competitors and in turn benefit American manufacturers. Slide 18 clearly shows why we believe that no matter how you look at the U.S. appliance industry, there is no other company better positioned than Whirlpool with our U.S. manufacturing footprint to navigate the straight landscape. As you can see, 80% of our MDA North American products sold in the U.S. are produced in the U.S. Assuming rates as of today and the August 1 reciprocal tariffs, you can see in the table how the various tariffs, including Section 232 in steel content, Section 301 specific components and finished goods, and the reciprocal IIPA tariffs from various countries, impact appliance imports while the overall tariff picture is still fluid. assuming rates as of today and the august 1 reciprocal tariffs you can see in the table how the various tariffs including section 232 in steel content section 301 specific components and finished goods and the reciprocal iipa tariffs from various countries impact appliance imports while the overall tariff picture is still fluid A 44% tariff on Chinese products and a 16% tariff on finished goods from other Asian countries should substantially impact competitors and in turn benefit American manufacturers. Slide 18 clearly shows why we believe that no matter how you look at the U.S. appliance industry, there is no other company better positioned than Whirlpool with our U.S. manufacturing footprint to navigate the straight landscape. a 44% tariff on chinese products and a 16% tariff on finished goods from other asian countries should substantially impact competitors and in turn benefit american manufacturers. slide 18 clearly shows why we believe that no matter how you look at the u.s appliance industry there is no other company better positioned than whirlpool with our u.s manufacturing footprint to navigate the straight landscape As you can see, 80% of our MDA North American products sold in the U.S. are produced in the U.S. as you can see 80% of our mda north american products sold in the u.s are produced in the u.s This compares to the rest of the industry excluding Whirlpool, which has only about 25% domestic production. We're proud to be invested in U.S. manufacturing and we will continue to invest in the U.S. as we have for over a century. As we are one of the only primarily domestic producers compared to our major competitors who are largely importers, we're confident that this is a new competitive advantage for Whirlpool in the new tariff landscape. Turning to slide 19, let me review how our North American business is well-positioned to benefit from an overdue housing market recovery. In the U.S., appliance demand is broken down into three main categories: discretionary demand, which is highly correlated to existing home sales, new home construction, and replacement demand driven by the rest purchases. This compares to the rest of the industry excluding Whirlpool, which has only about 25% domestic production. this compares to the rest of the industry excluding whirlpool which has only about 25% domestic production We're proud to be invested in U.S. manufacturing and we will continue to invest in the U.S. as we have for over a century. we're proud to be invested in u.s manufacturing and we will continue to invest in the u.s as we have for over a century As we are one of the only primarily domestic producers compared to our major competitors who are largely importers, we're confident that this is a new competitive advantage for Whirlpool in the new tariff landscape. as we are one of the only primarily domestic producers compared to our major competitors who are largely importers we're confident that this is a new competitive advantage for whirlpool in the new tariff landscape Turning to slide 19, let me review how our North American business is well-positioned to benefit from an overdue housing market recovery. turning to slide 19 let me review how our north american business is well-positioned to benefit from an overdue housing market recovery In the U.S., appliance demand is broken down into three main categories: discretionary demand, which is highly correlated to existing home sales, new home construction, and replacement demand driven by the rest purchases. in the u.s appliance demand is broken down into three main categories discretionary demand which is highly correlated to existing home sales new home construction and replacement demand driven by the rest purchases The U.S. housing industry has slowed in recent years as interest rates have risen sharply, drastically impacting discretionary demand. Notably, the size of these demand drivers has shifted significantly in this time frame with replacement demand becoming a bigger portion of overall demand. While replacement demand has continued to be strong, this comes with a weaker mix relative to discretionary demand. Return of discretionary demand will bring a much stronger appliance mix. Turning to slide 20, we show how discretionary demand is impacted by existing home sales. As mentioned earlier, there is a strong correlation between discretionary demand and existing home sales. In 2022, the rapid increase in mortgage rates slowed home sales significantly to the lowest level in 30 years. As mortgage rates begin to moderate off the peak, we expect existing home sales to improve. Discretionary demand has a richer mix with more built-in products and full kitchen suite sales. The U.S. housing industry has slowed in recent years as interest rates have risen sharply, drastically impacting discretionary demand. the u.s housing industry has slowed in recent years as interest rates have risen sharply drastically impacting discretionary demand Notably, the size of these demand drivers has shifted significantly in this time frame with replacement demand becoming a bigger portion of overall demand. notably the size of these demand drivers has shifted significantly in this time frame with replacement demand becoming a bigger portion of overall demand While replacement demand has continued to be strong, this comes with a weaker mix relative to discretionary demand. while replacement demand has continued to be strong this comes with a weaker mix relative to discretionary demand Return of discretionary demand will bring a much stronger appliance mix. return of discretionary demand will bring a much stronger appliance mix Turning to slide 20, we show how discretionary demand is impacted by existing home sales. turning to slide 20 we show how discretionary demand is impacted by existing home sales As mentioned earlier, there is a strong correlation between discretionary demand and existing home sales. as mentioned earlier there is a strong correlation between discretionary demand and existing home sales In 2022, the rapid increase in mortgage rates slowed home sales significantly to the lowest level in 30 years. in 2022 the rapid increase in mortgage rates slowed home sales significantly to the lowest level in 30 years As mortgage rates begin to moderate off the peak, we expect existing home sales to improve. as mortgage rates begin to moderate off the peak we expect existing home sales to improve Discretionary demand has a richer mix with more built-in products and full kitchen suite sales. discretionary demand has a richer mix with more built-in products and full kitchen suite sales We expect existing home sales will unlock in the midterm and improve discretionary demand. On slide 21, we discuss U.S. new home construction which has been under supplied since the financial crisis and creates long-term upside potential for Whirlpool. There is an undersupply of U.S. housing of approximately 3 million-4 million homes, along with the rising median age of U.S. homes to over 40 years, which is the oldest housing stock in U.S. history. Given the favorable demographics in the U.S., a multi-year improvement in new housing starts is needed to address the undersupply gap. Turning to slide 22, we highlight how our leading builder business is positioned to benefit from the overdue housing recovery. A few years ago, we made the conscious choice to invest in the U.S. Builder business and significantly strengthen our position in this part of the segment. We expect existing home sales will unlock in the midterm and improve discretionary demand. we expect existing home sales will unlock in the midterm and improve discretionary demand On slide 21, we discuss U.S. new home construction which has been under supplied since the financial crisis and creates long-term upside potential for Whirlpool. on slide 21 we discuss u.s new home construction which has been under supplied since the financial crisis and creates long-term upside potential for whirlpool There is an undersupply of U.S. housing of approximately 3 million- 4 million homes, along with the rising median age of U.S. homes to over 40 years, which is the oldest housing stock in U.S. history. there is an undersupply of u.s housing of approximately 3 million- 4 million homes along with the rising median age of u.s homes to over 40 years which is the oldest housing stock in u.s history Given the favorable demographics in the U.S., a multi-year improvement in new housing starts is needed to address the undersupply gap. given the favorable demographics in the u.s a multi-year improvement in new housing starts is needed to address the undersupply gap Turning to slide 22, we highlight how our leading builder business is positioned to benefit from the overdue housing recovery. turning to slide 22 we highlight how our leading builder business is positioned to benefit from the overdue housing recovery A few years ago, we made the conscious choice to invest in the U.S. a few years ago we made the conscious choice to invest in the u.s Builder business and significantly strengthen our position in this part of the segment. builder business and significantly strengthen our position in this part of the segment As a result, today we're proud to hold the number one position with national builders, approaching 60% share. We also do business with eight of the top 10 builders in the U.S. Our final mile delivery capabilities, along with the breadth of our products and brand portfolio, allow us to directly serve our builders and meet their needs. A truly differentiated capability. Putting it all together, you see that we are at an inflection point in terms of our performance and our position to win in this environment. To wrap up this section, let me repeat our three catalysts for structural long-term growth in our North American business: with new products strengthening our leading brand portfolio, a unique domestic footprint which positions us as a winner in the new trade policy, and our number one position among builders which will provide sizable upside in the eventual housing market recovery. As a result, today we're proud to hold the number one position with national builders, approaching 60% share. as a result today we're proud to hold the number one position with national builders approaching 60% share We also do business with eight of the top 10 builders in the U.S. we also do business with eight of the top 10 builders in the u.s Our final mile delivery capabilities, along with the breadth of our products and brand portfolio, allow us to directly serve our builders and meet their needs. our final mile delivery capabilities along with the breadth of our products and brand portfolio allow us to directly serve our builders and meet their needs A truly differentiated capability. a truly differentiated capability Putting it all together, you see that we are at an inflection point in terms of our performance and our position to win in this environment. putting it all together you see that we are at an inflection point in terms of our performance and our position to win in this environment To wrap up this section, let me repeat our three catalysts for structural long-term growth in our North American business: with new products strengthening our leading brand portfolio, a unique domestic footprint which positions us as a winner in the new trade policy, and our number one position among builders which will provide sizable upside in the eventual housing market recovery. to wrap up this section let me repeat our three catalysts for structural long-term growth in our north american business with new products strengthening our leading brand portfolio a unique domestic footprint which positions us as a winner in the new trade policy and our number one position among builders which will provide sizable upside in the eventual housing market recovery Now I will turn it over to Jim to review our 2025 guidance and capital allocation priorities. Now I will turn it over to Jim to review our 2025 guidance and capital allocation priorities. now i will turn it over to jim to review our 2025 guidance and capital allocation priorities

Speaker 5: Thanks, Marc. Turning to slide 24, I will review our updated guidance for 2025. As Marc highlighted, there continues to be considerable uncertainty in the macroeconomic environment along with short-term headwinds from the preloading of Asian appliance imports. As a result, we are updating our full-year guidance to reflect this uncertainty and the timing in which we expect some of these headwinds to subside. We now target the India transaction to close around year-end and therefore have included the India results from July through December 2024 back into the baseline for comparison purposes. The reset baseline excludes approximately $800 million in net sales and an approximately $9 million EBIT loss, creating a like-for-like comparison for 2025 guidance. On a like-for-like basis, 2024 net sales were approximately $15.8 billion with an ongoing EBIT margin of approximately 5.7%. Thanks, Marc. thanks marc Turning to slide 24, I will review our updated guidance for 2025. turning to slide 24 i will review our updated guidance for 2025 As Marc highlighted, there continues to be considerable uncertainty in the macroeconomic environment along with short-term headwinds from the preloading of Asian appliance imports. as marc highlighted there continues to be considerable uncertainty in the macroeconomic environment along with short-term headwinds from the preloading of asian appliance imports As a result, we are updating our full-year guidance to reflect this uncertainty and the timing in which we expect some of these headwinds to subside. as a result we are updating our full-year guidance to reflect this uncertainty and the timing in which we expect some of these headwinds to subside We now target the India transaction to close around year-end and therefore have included the India results from July through December 2024 back into the baseline for comparison purposes. we now target the india transaction to close around year-end and therefore have included the india results from july through december 2024 back into the baseline for comparison purposes The reset baseline excludes approximately $800 million in net sales and an approximately $9 million EBIT loss, creating a like-for-like comparison for 2025 guidance. the reset baseline excludes approximately $800 million in net sales and an approximately $9 million ebit loss creating a like-for-like comparison for 2025 guidance On a like-for-like basis, 2024 net sales were approximately $15.8 billion with an ongoing EBIT margin of approximately 5.7%. on a like-for-like basis 2024 net sales were approximately $15.8 billion with an ongoing ebit margin of approximately 5.7% We expect approximately flat net sales of $15.8 billion in 2025, reflecting our strong pipeline of new products offset by the worsening global consumer sentiment impacting demand and unfavorable currency. On a like-for-like basis, we expect an approximately flat ongoing EBIT margin of 5.7%. Free cash flow is expected to deliver approximately $400 million. As a reminder, the adjusted effective tax rate is expected to be 20%-25% in 2025. We still expect the cash tax rate to be significantly lower. We expect full-year ongoing EPS of $6-$8. Turning to slide 25, we show the drivers of our updated full-year ongoing EBIT margin guidance. We have updated our expectation of price mix to 25 basis points to reflect the weakening consumer sentiment impacting mix and the delays in tariff implementation prolonging the promotional pressure beyond what we previously anticipated. We expect approximately flat net sales of $15.8 billion in 2025, reflecting our strong pipeline of new products offset by the worsening global consumer sentiment impacting demand and unfavorable currency. we expect approximately flat net sales of $15.8 billion in 2025 reflecting our strong pipeline of new products offset by the worsening global consumer sentiment impacting demand and unfavorable currency On a like-for-like basis, we expect an approximately flat ongoing EBIT margin of 5.7%. on a like-for-like basis we expect an approximately flat ongoing ebit margin of 5.7% Free cash flow is expected to deliver approximately $400 million. free cash flow is expected to deliver approximately $400 million As a reminder, the adjusted effective tax rate is expected to be 20%- 25% in 2025. as a reminder the adjusted effective tax rate is expected to be 20%- 25% in 2025 We still expect the cash tax rate to be significantly lower. we still expect the cash tax rate to be significantly lower We expect full-year ongoing EPS of $6- $8. we expect full-year ongoing eps of $6- $8 Turning to slide 25, we show the drivers of our updated full-year ongoing EBIT margin guidance. turning to slide 25 we show the drivers of our updated full-year ongoing ebit margin guidance We have updated our expectation of price mix to 25 basis points to reflect the weakening consumer sentiment impacting mix and the delays in tariff implementation prolonging the promotional pressure beyond what we previously anticipated. we have updated our expectation of price mix to 25 basis points to reflect the weakening consumer sentiment impacting mix and the delays in tariff implementation prolonging the promotional pressure beyond what we previously anticipated Net cost takeout reflects the expectation of delivering approximately $200 million. Transaction impacts reflect our most recent expectations on the non-cash impact of equity from affiliates related to Beko Europe, lowered by 25 basis points. We lowered the expected impact of incremental tariffs from 250-150 basis points to reflect the most current proposed tariff rates. The biggest adjustment from previous expectations is most notably from China's tariff rates. We expect to offset these impacts through the cost-based pricing actions announced in the second quarter and by continuing to assess our supply sourcing strategy. It is important to reiterate that these impacts represent currently announced tariffs and do not factor in any future or potential changes in trade policy. Turning to slide 26, I will review our updated segment expectations. Globally, we now expect the total industry to be approximately flat to down 3% in MDA North America. Net cost takeout reflects the expectation of delivering approximately $200 million. net cost takeout reflects the expectation of delivering approximately $200 million Transaction impacts reflect our most recent expectations on the non-cash impact of equity from affiliates related to Beko Europe, lowered by 25 basis points. transaction impacts reflect our most recent expectations on the non-cash impact of equity from affiliates related to beko europe lowered by 25 basis points We lowered the expected impact of incremental tariffs from 250- 150 basis points to reflect the most current proposed tariff rates. we lowered the expected impact of incremental tariffs from 250- 150 basis points to reflect the most current proposed tariff rates The biggest adjustment from previous expectations is most notably from China's tariff rates. the biggest adjustment from previous expectations is most notably from china's tariff rates We expect to offset these impacts through the cost-based pricing actions announced in the second quarter and by continuing to assess our supply sourcing strategy. we expect to offset these impacts through the cost-based pricing actions announced in the second quarter and by continuing to assess our supply sourcing strategy It is important to reiterate that these impacts represent currently announced tariffs and do not factor in any future or potential changes in trade policy. it is important to reiterate that these impacts represent currently announced tariffs and do not factor in any future or potential changes in trade policy Turning to slide 26, I will review our updated segment expectations. turning to slide 26 i will review our updated segment expectations Globally, we now expect the total industry to be approximately flat to down 3% in MDA North America. globally we now expect the total industry to be approximately flat to down 3% in mda north america With the worsening consumer sentiment and pressure on discretionary demand, we expect the industry to be flat to down 3%. MDA Latin America has seen significant deterioration in Mexico and a deceleration in Brazil, therefore, we now expect industry to be flat to down 5%. We continue to see demand improvement in India. However, behind initial expectations due to geopolitical tensions and an unusually cool summer selling season in the second quarter, we have adjusted the MDA Asia industry flat to up 3%. Finally, SDA Global continues to be impacted by discretionary demand weakness in the U.S. and Europe, resulting in the expected industry for the year to be flat to down 3%. It is important to note that we continue to expect to deliver incremental sales growth through our new product introductions. With the worsening consumer sentiment and pressure on discretionary demand, we expect the industry to be flat to down 3%. with the worsening consumer sentiment and pressure on discretionary demand we expect the industry to be flat to down 3% MDA Latin America has seen significant deterioration in Mexico and a deceleration in Brazil, therefore, we now expect industry to be flat to down 5%. mda latin america has seen significant deterioration in mexico and a deceleration in brazil therefore we now expect industry to be flat to down 5% We continue to see demand improvement in India. we continue to see demand improvement in india However, behind initial expectations due to geopolitical tensions and an unusually cool summer selling season in the second quarter, we have adjusted the MDA Asia industry flat to up 3%. however behind initial expectations due to geopolitical tensions and an unusually cool summer selling season in the second quarter we have adjusted the mda asia industry flat to up 3% Finally, SDA Global continues to be impacted by discretionary demand weakness in the U.S. and Europe, resulting in the expected industry for the year to be flat to down 3%. finally sda global continues to be impacted by discretionary demand weakness in the u.s and europe resulting in the expected industry for the year to be flat to down 3% It is important to note that we continue to expect to deliver incremental sales growth through our new product introductions. it is important to note that we continue to expect to deliver incremental sales growth through our new product introductions Despite the unfavorable industry, we have adjusted EBIT margin in North America to reflect the prolonged effect of tariff uncertainty and the competitor preloading negatively impacting the promotional intensity. We expect a full year MDA North America margin of 6%-6.5%. With unfavorable currency impacts and weakening consumer demand in Latin America, we now expect EBIT margin of approximately 7%. We now expect MDA Asia EBIT margin of approximately 5% driven by India consolidated results now being included in the full year guidance. With the strength of SDA Global's direct to consumer growth and previous new product introductions, we now expect an increase in EBIT margin to 15.5%. Turning to slide 27, I will review our free cash flow guidance. We've updated our cash earnings and other operating accounts consistent with full year EBIT guidance. Despite the unfavorable industry, we have adjusted EBIT margin in North America to reflect the prolonged effect of tariff uncertainty and the competitor preloading negatively impacting the promotional intensity. despite the unfavorable industry we have adjusted ebit margin in north america to reflect the prolonged effect of tariff uncertainty and the competitor preloading negatively impacting the promotional intensity We expect a full year MDA North America margin of 6%- 6.5%. we expect a full year mda north america margin of 6%- 6.5% With unfavorable currency impacts and weakening consumer demand in Latin America, we now expect EBIT margin of approximately 7%. with unfavorable currency impacts and weakening consumer demand in latin america we now expect ebit margin of approximately 7% We now expect MDA Asia EBIT margin of approximately 5% driven by India consolidated results now being included in the full year guidance. we now expect mda asia ebit margin of approximately 5% driven by india consolidated results now being included in the full year guidance With the strength of SDA Global's direct to consumer growth and previous new product introductions, we now expect an increase in EBIT margin to 15.5%. with the strength of sda global's direct to consumer growth and previous new product introductions we now expect an increase in ebit margin to 15.5% Turning to slide 27, I will review our free cash flow guidance. turning to slide 27 i will review our free cash flow guidance We've updated our cash earnings and other operating accounts consistent with full year EBIT guidance. we've updated our cash earnings and other operating accounts consistent with full year ebit guidance We have not changed our expectations for capital expenditures and continue to focus on delivering product excellence and investing in our U.S. manufacturing footprint. We expect to sustain our low working capital levels and do not expect a material impact. Finally, we've updated the restructuring expectations of the previously announced organizational simplification actions to approximately $50 million. Overall, we expect free cash flow of approximately $400 million for the year. Turning to slide 28, I will review our capital allocation priorities. Investing in innovative products that meet our consumers' needs is critical to driving our organic growth. We are very excited about the 100+ new products we are launching this year. Secondly, we are committed to reducing debt levels. We continue to expect to pay down $700 million of debt in 2025, taking a significant step towards our long-term target of 2x net debt leverage. We have not changed our expectations for capital expenditures and continue to focus on delivering product excellence and investing in our U.S. manufacturing footprint. we have not changed our expectations for capital expenditures and continue to focus on delivering product excellence and investing in our u.s manufacturing footprint We expect to sustain our low working capital levels and do not expect a material impact. we expect to sustain our low working capital levels and do not expect a material impact Finally, we've updated the restructuring expectations of the previously announced organizational simplification actions to approximately $50 million. finally we've updated the restructuring expectations of the previously announced organizational simplification actions to approximately $50 million Overall, we expect free cash flow of approximately $400 million for the year. overall we expect free cash flow of approximately $400 million for the year Turning to slide 28, I will review our capital allocation priorities. turning to slide 28 i will review our capital allocation priorities Investing in innovative products that meet our consumers' needs is critical to driving our organic growth. investing in innovative products that meet our consumers' needs is critical to driving our organic growth We are very excited about the 100+ new products we are launching this year. we are very excited about the 100+ new products we are launching this year Secondly, we are committed to reducing debt levels. secondly we are committed to reducing debt levels We continue to expect to pay down $700 million of debt in 2025, taking a significant step towards our long-term target of 2x net debt leverage. we continue to expect to pay down $700 million of debt in 2025 taking a significant step towards our long-term target of 2x net debt leverage Lastly, we are committed to returning cash to shareholders by funding a healthy dividend. We are confident our business is well-positioned for growth. However, the volatile macroeconomic environment and prolonged suppressed housing cycle have impacted our short-term results. After careful consideration with focus on our long-term value creation, we are recommending to adjust the annual dividend rate to $3.60 per share starting in the third quarter. While this decision was not taken lightly, it is critical to ensure we create the capacity on our balance sheet for future investments in the U.S. and continued focus on debt repayment. As a reminder, the dividend is approved quarterly by the Board of Directors. Turning to slide 29, we continue to strengthen our balance sheet and operate with ample liquidity. Lastly, we are committed to returning cash to shareholders by funding a healthy dividend. lastly we are committed to returning cash to shareholders by funding a healthy dividend We are confident our business is well-positioned for growth. we are confident our business is well-positioned for growth However, the volatile macroeconomic environment and prolonged suppressed housing cycle have impacted our short-term results. however the volatile macroeconomic environment and prolonged suppressed housing cycle have impacted our short-term results After careful consideration with focus on our long-term value creation, we are recommending to adjust the annual dividend rate to $3.60 per share starting in the third quarter. after careful consideration with focus on our long-term value creation we are recommending to adjust the annual dividend rate to $3.60 per share starting in the third quarter While this decision was not taken lightly, it is critical to ensure we create the capacity on our balance sheet for future investments in the U.S. and continued focus on debt repayment. while this decision was not taken lightly it is critical to ensure we create the capacity on our balance sheet for future investments in the u.s and continued focus on debt repayment As a reminder, the dividend is approved quarterly by the Board of Directors. as a reminder the dividend is approved quarterly by the board of directors Turning to slide 29, we continue to strengthen our balance sheet and operate with ample liquidity. turning to slide 29 we continue to strengthen our balance sheet and operate with ample liquidity We proactively refinanced $1.2 billion of debt with five and eight year notes at very favorable rates with a weighted average rate of 6.3%. We still expect to pay down approximately $700 million of debt this year and the cash generation from the anticipated India transaction, which has generated significant interest from large third-party investors, is targeted around the end of 2025. As a reminder, we have ample liquidity for our operations and financing needs as we have access to a $3.5 billion revolving credit facility. Turning to slide 30, let me review what you heard today. While we are operating in a challenging macro cycle, we are encouraged by our progress. We continue to reduce costs from our business, launch record numbers of new products, and execute previously announced pricing actions in North America. We proactively refinanced $1.2 billion of debt with five and eight year notes at very favorable rates with a weighted average rate of 6.3%. we proactively refinanced $1.2 billion of debt with five and eight year notes at very favorable rates with a weighted average rate of 6.3% We still expect to pay down approximately $700 million of debt this year and the cash generation from the anticipated India transaction, which has generated significant interest from large third-party investors, is targeted around the end of 2025. we still expect to pay down approximately $700 million of debt this year and the cash generation from the anticipated india transaction which has generated significant interest from large third-party investors is targeted around the end of 2025 As a reminder, we have ample liquidity for our operations and financing needs as we have access to a $3.5 billion revolving credit facility. as a reminder we have ample liquidity for our operations and financing needs as we have access to a $3.5 billion revolving credit facility Turning to slide 30, let me review what you heard today. turning to slide 30 let me review what you heard today While we are operating in a challenging macro cycle, we are encouraged by our progress. while we are operating in a challenging macro cycle we are encouraged by our progress We continue to reduce costs from our business, launch record numbers of new products, and execute previously announced pricing actions in North America. we continue to reduce costs from our business launch record numbers of new products and execute previously announced pricing actions in north america We're very well-positioned for growth driven by our new product innovation, significant domestic manufacturing footprint, and housing demand fundamentals that suggest a multi-year recovery is on the horizon. We continue to expect the aministration's tariff policies will help level the playing field for U.S.-based producers and in effect make Whirlpool a net winner. Our SDA Global segment delivers strong value creation as it delivers continued top line and margin expansion. As we move into the second half, we remain focused on the execution of what is within our control, driving structural cost takeout, implementing previously announced pricing actions, and executing on our capital allocation priorities including organic growth, debt reduction, and funding a healthy dividend. With the right operational priorities in place, we are confident in our strategy and our ability to create long term value. Now we will end our formal remarks and open it up for questions. We're very well-positioned for growth driven by our new product innovation, significant domestic manufacturing footprint, and housing demand fundamentals that suggest a multi-year recovery is on the horizon. we're very well-positioned for growth driven by our new product innovation significant domestic manufacturing footprint and housing demand fundamentals that suggest a multi-year recovery is on the horizon We continue to expect the aministration's tariff policies will help level the playing field for U.S.-based producers and in effect make Whirlpool a net winner. we continue to expect the aministration's tariff policies will help level the playing field for u.s.-based producers and in effect make whirlpool a net winner Our SDA Global segment delivers strong value creation as it delivers continued top line and margin expansion. our sda global segment delivers strong value creation as it delivers continued top line and margin expansion As we move into the second half, we remain focused on the execution of what is within our control, driving structural cost takeout, implementing previously announced pricing actions, and executing on our capital allocation priorities including organic growth, debt reduction, and funding a healthy dividend. as we move into the second half we remain focused on the execution of what is within our control driving structural cost takeout implementing previously announced pricing actions and executing on our capital allocation priorities including organic growth debt reduction and funding a healthy dividend With the right operational priorities in place, we are confident in our strategy and our ability to create long term value. with the right operational priorities in place we are confident in our strategy and our ability to create long term value Now we will end our formal remarks and open it up for questions. now we will end our formal remarks and open it up for questions

Speaker 3: At this time, I would like to remind everyone in order to ask a question, press Star, then the number one on your telephone keypad. Your first question comes from the line of David MacGregor from Longbow Research. Your line is open. At this time, I would like to r emind everyone in order to ask a question, press Star, then the number one on your telephone keypad. at this time i would like to r emind everyone in order to ask a question press star then the number one on your telephone keypad Your first question comes from the line of David MacGregor from Longbow Research. your first question comes from the line of david macgregor from longbow research Your line is open. your line is open

Speaker 1: Yes, good morning everyone. Marc, what's your best estimate of the quantity of pulled forward tariff-free imported product currently on the ground, and how long will it take to move that through retail? Yes, good morning everyone. yes good morning everyone Marc, what's your best estimate of the quantity of pulled forward tariff-free imported product currently on the ground, and how long will it take to move that through retail? marc what's your best estimate of the quantity of pulled forward tariff-free imported product currently on the ground and how long will it take to move that through retail

Speaker 2: David, first of all it's difficult to exactly give an estimate, but let me give you a couple data points. As you've seen, the market overall on a sell-in base, on a registered sell-in base was slightly down in Q2, while at the same time the appliance imports from Asia, if you take the year-to-date numbers, they are significantly up. I mean we're talking particularly if you exclude China, more than 20% up. There's a significant imbalance between the officially declared sell-in and what has been shipped from Asia. I would argue even with declared sell-in is slightly above the actual sell-out. We also, and we referred to this one earlier, what has been declared as a shipment may include some consignment stock from competitors. It's very difficult to calibrate. We don't have a June official import date. I'm referring to the May 1. David, first of all it's difficult to exactly give an estimate, but let me give you a couple data points. david first of all it's difficult to exactly give an estimate but let me give you a couple data points As you've seen, the market overall on a sell-in base, on a registered sell-in base was slightly down in Q2, while at the same time the appliance imports from Asia, if you take the year-to-date numbers, they are significantly up. as you've seen the market overall on a sell-in base on a registered sell-in base was slightly down in q2 while at the same time the appliance imports from asia if you take the year-to-date numbers they are significantly up I mean we're talking particularly if you exclude China, more than 20% up. i mean we're talking particularly if you exclude china more than 20% up There's a significant imbalance between the officially declared sell-in and what has been shipped from Asia. there's a significant imbalance between the officially declared sell-in and what has been shipped from asia I would argue even with declared sell-in is slightly above the actual sell-out. i would argue even with declared sell-in is slightly above the actual sell-out We also, and we referred to this one earlier, what has been declared as a shipment may include some consignment stock from competitors. we also and we referred to this one earlier what has been declared as a shipment may include some consignment stock from competitors It's very difficult to calibrate. it's very difficult to calibrate We don't have a June official import date. we don't have a june official import date I'm referring to the May 1. i'm referring to the may 1 As of end of May I would have expected there's probably easily 60-90 days of inventory from the excess Asian imports in there that hopefully will flow through a system and I think hopefully will become every month less as the tariffs are taking really effect. It has been a significant additional loading happening throughout May. As of end of May I would have expected there's probably easily 60- 90 days of inventory from the excess Asian imports in there that hopefully will flow through a system and I think hopefully will become every month less as the tariffs are taking really effect. as of end of may i would have expected there's probably easily 60- 90 days of inventory from the excess asian imports in there that hopefully will flow through a system and i think hopefully will become every month less as the tariffs are taking really effect It has been a significant additional loading happening throughout May. it has been a significant additional loading happening throughout may

Speaker 1: Okay, thanks for that. As a follow up, I just wanted to ask you about the promotional calendar, and I guess at this point all the manufacturers are out with their promotional plans for the second half. What are you hearing in the way of how second half might look different from the first half? It seems as though manufacturers are backing off PMAPs, support for house offers, shifting to more kind of buy more, save more type of promotional programs. Is the problem that your competitors' promotional focus has shifted to more premium products and that's cutting more into your margins? Just talk about how the second half should play out. Okay, thanks for that. okay thanks for that As a follow up, I just wanted to ask you about the promotional calendar, and I guess at this point all the manufacturers are out with their promotional plans for the second half. as a follow up i just wanted to ask you about the promotional calendar and i guess at this point all the manufacturers are out with their promotional plans for the second half What are you hearing in the way o f how second half might look different from the first half? what are you hearing in the way o f how second half might look different from the first half It seems as though manufacturers are backing off PMAPs, support for house offers, shifting to more kind of buy more, save more type of promotional programs. it seems as though manufacturers are backing off pmaps support for house offers shifting to more kind of buy more save more type of promotional programs Is the problem that your competitors' promotional focus has shifted to more premium products and that's cutting more into your margins? is the problem that your competitors' promotional focus has shifted to more premium products and that's cutting more into your margins Just talk about how the second half should play out. just talk about how the second half should play out

Speaker 2: Yeah. David, as you know we're kind of typically don't give forward looking statement on promotion and pricing. Let me just more kind of wisdom of hindsight including July 4th and then you can try to read whatever into this one. First of all, as you've seen in Q2 we significantly reduced our promotional efforts both in duration and depth of promotion. Frankly, in Q2 we're probably quite a bit ahead of our competitors in terms of being a little bit more or less aggressive, if you want to say so. That was simply a result we saw. Also, we're impacted by tariff costs and we had to adjust it. More importantly, simply in a strong replacement driven market, the lift you get from these promotional investment is just very little. Yeah. yeah David, as you know we're kind of typically don't give forward looking statement on promotion and pricing. david as you know we're kind of typically don't give forward looking statement on promotion and pricing Let me just more kind of wisdom of hindsight including July 4th and then you can try to read whatever into this one. let me just more kind of wisdom of hindsight including july 4th and then you can try to read whatever into this one First of all, as you've seen in Q2 we significantly reduced our promotional efforts both in duration and depth of promotion. first of all as you've seen in q2 we significantly reduced our promotional efforts both in duration and depth of promotion Frankly, in Q2 we're probably quite a bit ahead of our competitors in terms of being a little bit more or less aggressive, if you want to say so. frankly in q2 we're probably quite a bit ahead of our competitors in terms of being a little bit more or less aggressive if you want to say so That was simply a result we saw. that was simply a result we saw Also, we're impacted by tariff costs and we had to adjust it. also we're impacted by tariff costs and we had to adjust it More importantly, simply in a strong replacement driven market, the lift you get from these promotional investment is just very little. more importantly simply in a strong replacement driven market the lift you get from these promotional investment is just very little If you really look at the math of some of these promotions, the lift you get is to some extent even pulled forward. You start wondering does it purely economically make sense to have these deep investment promotion periods when the lift is just very little? That's ultimately why we curtailed our promotional depth and duration Q2. Right now again we don't give forward looking statements. Right now I would not expect completely different behavior from us. We saw in the industry July 4th was still deep for the industry. That is a large result. There's excess inventory build up in the system and probably people had to sell it off and that's just what it is. We saw post July 4th call it a normalization post promotion. There was a move up but it's hard to yet predict what it really means. If you really look at the math of some of these promotions, the lift you get is to some extent even pulled forward. if you really look at the math of some of these promotions the lift you get is to some extent even pulled forward You start wondering does it purely economically make sense to have these deep investment promotion periods when the lift is just very little? you start wondering does it purely economically make sense to have these deep investment promotion periods when the lift is just very little That's ultimately why we curtailed our promotional depth and duration Q2. that's ultimately why we curtailed our promotional depth and duration q2 Right now again we don't give forward looking statements. right now again we don't give forward looking statements Right now I would not expect completely different behavior from us. right now i would not expect completely different behavior from us We saw in the industry July 4th was still deep for the industry. we saw in the industry july 4th was still deep for the industry That is a large result. that is a large result There's excess inventory build up in the system and probably people had to sell it off and that's just what it is. there's excess inventory build up in the system and probably people had to sell it off and that's just what it is We saw post July 4th call it a normalization post promotion. we saw post july 4th call it a normalization post promotion There was a move up but it's hard to yet predict what it really means. there was a move up but it's hard to yet predict what it really means For what you probably refer to Labor Day and Black Friday, I would overall expect probably a more muted environment than in the past. That's right now pure speculation from my side. For what you probably refer to Labor Day and Black Friday, I would overall expect probably a more muted environment than in the past. for what you probably refer to labor day and black friday i would overall expect probably a more muted environment than in the past That's right now pure speculation from my side. that's right now pure speculation from my side

Speaker 3: Your next question comes from a line of Mike Dahl from RBC Capital Markets. Your line is open. Your next question comes from a line of Mike Dahl from RBC Capital Markets. your next question comes from a line of mike dahl from rbc capital markets Your line is open. your line is open

Speaker 11: Hi, thanks for taking my questions, Marc. I just want to follow up on. The import dynamic, because I think, you know, on the last call the inventory was characterized as maybe a number of weeks. Now it's extending through 3Q, which is kind of many, many months, going back to the April comments now through September. Understanding that some of the data that we can all see is lagged, how much visibility do you actually have to make those kind of calculations around how much is in warehouses or how much is at, you know, city, whether it's warehouses at ports or warehouses from your retailers? Just trying to figure out the, especially as China seems to be on. the verge of, you know, those tariffs getting delayed again, how you gauge the visibility of that level of imports. Hi, thanks for taking my questions, Marc. hi thanks for taking my questions marc I just want to follow up on. i just want to follow up on The import dynamic, because I think, you know, on the last call the inventory was characterized as maybe a number of weeks. the import dynamic because i think you know on the last call the inventory was characterized as maybe a number of weeks Now it's extending through 3Q, which is kind of many, many months, going back to the April comments now through September. now it's extending through 3q which is kind of many many months going back to the april comments now through september Understanding that some of the data that we can all see is lagged, how much visibility do you actually have to make those kind of calculations around how much is in warehouses or how much is at, you know, city, whether it's warehouses at ports or warehouses from your retailers? understanding that some of the data that we can all see is lagged how much visibility do you actually have to make those kind of calculations around how much is in warehouses or how much is at you know city whether it's warehouses at ports or warehouses from your retailers Just trying to figure out the, e specially as China seems to be on. the verge of, you know, those tariffs getting delayed again, how you gauge the visibility of that level of imports. just trying to figure out the, e specially as china seems to be on the verge of you know those tariffs getting delayed again how you gauge the visibility of that level of imports

Speaker 2: Yeah, Michael, let me maybe give you a little bit longer answer to your question. Of course, it's more calibration as opposed to absolute facts because obviously we don't have precise inventory data by our competitors. Let me context first of all, when we had our last earnings call, that was April, that was pretty much post or just a few weeks post the Liberation Day announcements. I also want to be very clear, of course we 100% support what the administration is trying to do and we ultimately will be a net beneficiary of this one. You also have seen that since then there have been a number of delays and frankly we're still operating in an environment where there's uncertainty about what happens around August 1, what happens with country tariffs. Yeah, Michael, let me maybe give you a little bit longer answer to your question. yeah michael let me maybe give you a little bit longer answer to your question Of course, it's more calibration as opposed to absolute facts because obviously we don't have precise inventory data by our competitors. of course it's more calibration as opposed to absolute facts because obviously we don't have precise inventory data by our competitors Let me context first of all, when we had our last earnings call, that was April, that was pretty much post or just a few weeks post the Liberation Day announcements. let me context first of all when we had our last earnings call that was april that was pretty much post or just a few weeks post the liberation day announcements I also want to be very clear, of course we 100% support what the administration is trying to do and we ultimately will be a net beneficiary of this one. i also want to be very clear of course we 100% support what the administration is trying to do and we ultimately will be a net beneficiary of this one You also have seen that since then there have been a number of delays and frankly we're still operating in an environment where there's uncertainty about what happens around August 1, what happens with country tariffs. you also have seen that since then there have been a number of delays and frankly we're still operating in an environment where there's uncertainty about what happens around august 1 what happens with country tariffs As much as we strongly applaud what the administration is doing, of course we all live in an environment where tariffs have been delayed or postponed. Now, you can also imagine when you send a message to our competitors that the tariffs are delayed, like an invitation to ship a little bit more for the next couple of weeks. That's what we've seen throughout the entire second quarter. By the way, the interesting data point you just need to look at is if you look at the container rates in terms of how they spike up, that's always a signal there's more demand for shipments. We've seen that with every tariff delay there is another round of additional loading. Now, to calibrate it, yes, we know what the official sell-in data is. We know what the appliance imports are as of end of May. June numbers will come out mid-August. As much as we strongly applaud what the administration is doing, of course we all live in an environment where tariffs have been delayed or postponed. as much as we strongly applaud what the administration is doing of course we all live in an environment where tariffs have been delayed or postponed Now, you can also imagine when you send a message to our competitors that the tariffs are delayed, like an invitation to ship a little bit more for the next couple of weeks. now you can also imagine when you send a message to our competitors that the tariffs are delayed like an invitation to ship a little bit more for the next couple of weeks That's what we've seen throughout the entire second quarter. that's what we've seen throughout the entire second quarter By the way, the interesting data point you just need to look at is if you look at the container rates in terms of how they spike up, that's always a signal there's more demand for shipments. by the way the interesting data point you just need to look at is if you look at the container rates in terms of how they spike up that's always a signal there's more demand for shipments We've seen that with every tariff delay there is another round of additional loading. we've seen that with every tariff delay there is another round of additional loading Now, to calibrate it, yes, we know what the official sell-in data is. now to calibrate it yes we know what the official sell-in data is We know what the appliance imports are as of end of May. we know what the appliance imports are as of end of may June numbers will come out mid-August. june numbers will come out mid-august What you've seen, and this may be a little bit of sign of encouragement, but China shipments started leveling out a little bit. We saw already a little bit of moderation in May and that's probably a logical result of the China tariffs kicked in fairly significantly, but the other Asian countries were just significantly increased. I would expect this with the 232 coming to effect and the additional country tariffs coming to effect, we would expect to see the same development also in the non-China Asian countries. Again, we expect and of course there's a lot of decision making happening by the administration and we've got to see what's happening the next couple of weeks. With the data points of sell-in data, industry sell-in, and where we have a pretty good understanding of overall sellout, we expect that. What you've seen, and this may be a little bit of sign of encouragement, but China shipments started leveling out a little bit. what you've seen and this may be a little bit of sign of encouragement but china shipments started leveling out a little bit We saw already a little bit of moderation in May and that's probably a logical result of the China tariffs kicked in fairly significantly, but the other Asian countries were just significantly increased. we saw already a little bit of moderation in may and that's probably a logical result of the china tariffs kicked in fairly significantly but the other asian countries were just significantly increased I would expect this with the 232 coming to effect and the additional country tariffs coming to effect, we would expect to see the same development also in the non-China Asian countries. i would expect this with the 232 coming to effect and the additional country tariffs coming to effect we would expect to see the same development also in the non-china asian countries Again, we expect and of course there's a lot of decision making happening by the administration and we've got to see what's happening the next couple of weeks. again we expect and of course there's a lot of decision making happening by the administration and we've got to see what's happening the next couple of weeks With the data points of sell-in data, industry sell-in, and where we have a pretty good understanding of overall sellout, we expect that. with the data points of sell-in data industry sell-in and where we have a pretty good understanding of overall sellout we expect that That's why I said earlier we would expect a significant amount of preloaded inventory. Certainly as of early June, we think there's quite a bit of inventory which was sold through July 4th. Of course, by definition, there's still quite a bit of inventory sitting out there. That's why we also said in Q3 we expect a similar but gradually improving environment and dynamics to what we experienced in Q2. Again, similar from a starting point, but with every month passing by and the tariffs becoming effective, we will see more of a normalization happening around us. That's why I said earlier we would expect a significant amount of preloaded inventory. that's why i said earlier we would expect a significant amount of preloaded inventory Certainly as of early June, we think there's quite a bit of inventory which was sold through July 4th. certainly as of early june we think there's quite a bit of inventory which was sold through july 4th Of course, by definition, there's still quite a bit of inventory sitting out there. of course by definition there's still quite a bit of inventory sitting out there That's why we also said in Q3 we expect a similar but gradually improving environment and dynamics to what we experienced in Q2. that's why we also said in q3 we expect a similar but gradually improving environment and dynamics to what we experienced in q2 Again, similar from a starting point, but with every month passing by and the tariffs becoming effective, we will see more of a normalization happening around us. again similar from a starting point but with every month passing by and the tariffs becoming effective we will see more of a normalization happening around us

Speaker 11: Okay, yeah, that's really helpful color. Thank you, Marc. The second question I have is related in terms of the North America major margins. It seems like the new guide is kind of flatter. I think, I don't know if your comment about similar in 3Q just referenced the margin cadence. I think the prior guide was, you know, for a step up in the back half. I'm assuming the new guide is largely a function of this kind of preloading effect, but maybe you can just break down that change in the margin guidance and the implied back half cadence in North America. That would be great. Okay, yeah, that's really helpful color. okay yeah that's really helpful color Thank you, Marc. thank you marc The second question I have is related in terms of the North America major margins. the second question i have is related in terms of the north america major margins It seems like the new guide is kind of flatter. it seems like the new guide is kind of flatter I think, I don't know if your comment about similar in 3Q just referenced the margin cadence. i think i don't know if your comment about similar in 3q just referenced the margin cadence I think the prior guide was, you know, for a step up in the back half. i think the prior guide was you know for a step up in the back half I'm assuming the new guide is largely a function of this kind of p reloading effect, but maybe you can just break down that change in the margin guidance and the implied back half cadence in North America. i'm assuming the new guide is largely a function of this kind of p reloading effect but maybe you can just break down that change in the margin guidance and the implied back half cadence in north america That would be great. that would be great

Speaker 2: Thanks, Michael. First of all, what you described is spot on. Yes, ultimately the adjustment of guidance is a direct reflection of continued delay for tariffs. Nothing has changed in fundamentals. We will be a net winner for tariffs. We introduce the largest amount of new products ever, and in the mid to long-term we will win in the housing environment. That has not changed. It's just all the positive effects from these free catalysts are delayed or slightly delayed. Of course, that is a drag on our margin. Certainly, Q3 and Q4 we got a theme. That's why you also see is we've given what I would call an unusual wide range of outcomes in the guidance. That's exactly because we can't right now foresee how rational the competitors will behave based on these tariff costs. Thanks, Michael. thanks michael First of all, what you described is spot on. first of all what you described is spot on Yes, ultimately the adjustment of guidance is a direct reflection of continued delay for tariffs. yes ultimately the adjustment of guidance is a direct reflection of continued delay for tariffs Nothing has changed in fundamentals. nothing has changed in fundamentals We will be a net winner for tariffs. we will be a net winner for tariffs We introduce the largest amount of new products ever, and in the mid to long- term we will win in the housing environment. we introduce the largest amount of new products ever and in the mid to long- term we will win in the housing environment That has not changed. that has not changed It's just all the positive effects from these free catalysts are delayed or slightly delayed. it's just all the positive effects from these free catalysts are delayed or slightly delayed Of course, that is a drag on our margin. of course that is a drag on our margin Certainly, Q3 and Q4 we got a theme. certainly q3 and q4 we got a theme That's why you also see is we've given what I would call an unusual wide range of outcomes in the guidance. that's why you also see is we've given what i would call an unusual wide range of outcomes in the guidance That's exactly because we can't right now foresee how rational the competitors will behave based on these tariff costs. that's exactly because we can't right now foresee how rational the competitors will behave based on these tariff costs I think even though Q3 is pretty, I mean we have a pretty good sense about where it's coming out, but the tell sign will be really what do we see in the market in September, October, and how Q4 turns out. Again, I want to reemphasize it's a delay, it's not a change of a fundamental investment story. The three reasons which I mentioned earlier I strongly, more passionately than ever before, believe in them. There are three fundamental critical catalysts for our growth in North America. Unfortunately, we're delayed more than we had originally in mind. I think even though Q3 is pretty, I mean we have a pretty good sense about where it's coming out, but the tell sign will be really what do we see in the market in September, October, and how Q4 turns out. i think even though q3 is pretty i mean we have a pretty good sense about where it's coming out but the tell sign will be really what do we see in the market in september october and how q4 turns out Again, I want to reemphasize it's a delay, it's not a change of a fundamental investment story. again i want to reemphasize it's a delay it's not a change of a fundamental investment story The three reasons which I mentioned earlier I strongly, more passionately than ever before, believe in them. the three reasons which i mentioned earlier i strongly more passionately than ever before believe in them There are three fundamental critical catalysts for our growth in North America. there are three fundamental critical catalysts for our growth in north america Unfortunately, we're delayed more than we had originally in mind. unfortunately we're delayed more than we had originally in mind

Speaker 5: Yeah. Just to add to that, Michael, I think obviously, as we've talked about with the additional imported inventory, it obviously has had an impact on the promotional environment, but also what that's impacted from our volume perspective is the leverage we get in our factories. As that eventually makes its way through, the system subsides, it allows us then to get better leverage in our factories. I'd say today the cost actions we're taking, we're seeing the benefits of, we're seeing benefits of many of the pricing actions we've taken. We're operating in an environment where the volumes are just under pressure with all the product that's been imported into the U.S. recently. Yeah. yeah Just to add to that, Michael, I think obviously, as we've talked about with the additional imported inventory, it obviously has had an impact on the promotional environment, but also what that's impacted from our volume perspective is the leverage we get in our factories. just to add to that michael i think obviously as we've talked about with the additional imported inventory it obviously has had an impact on the promotional environment but also what that's impacted from our volume perspective is the leverage we get in our factories As that eventually makes its way through, the system subsides, it allows us then to get better leverage in our factories. as that eventually makes its way through the system subsides it allows us then to get better leverage in our factories I'd say today the cost actions we're taking, we're seeing the benefits of, we're seeing benefits of many of the pricing actions we've taken. i'd say today the cost actions we're taking we're seeing the benefits of we're seeing benefits of many of the pricing actions we've taken We're operating in an environment where the volumes are just under pressure with all the product that's been imported into the U.S. recently. we're operating in an environment where the volumes are just under pressure with all the product that's been imported into the u.s recently

Speaker 3: Your next question comes from a line of Susan Maklari from Goldman Sachs. Your line is open. Your next question comes from a line of Susan Maklari from Goldman Sachs. your next question comes from a line of susan maklari from goldman sachs Your line is open. your line is open

Speaker 7: Thank you. Good morning, everyone. Thank you. thank you Good morning, everyone. good morning everyone

Speaker 2: Good morning. Good morning. good morning

Speaker 7: My first question is looking at the SDA business, which had some really nice performance this quarter despite all the headwinds that you're facing there. Can you talk a bit about what has driven that and how you're thinking about the back half performance there, especially in terms of that segment margin? My first question is looking at the SDA business, which had some really nice performance this quarter despite all the headwinds that you're facing there. my first question is looking at the sda business which had some really nice performance this quarter despite all the headwinds that you're facing there Can you talk a bit about what has driven that and how you're thinking about the back half performance there, especially in terms of that segment margin? can you talk a bit about what has driven that and how you're thinking about the back half performance there especially in terms of that segment margin

Speaker 2: Yeah, Susan, it's Marc. First of all, obviously we're very pleased with the SDA performance year to date. We had a very strong Q1, we had a very strong Q2, and right now it looks like we will also have a very strong Q3. We feel very good about it. We have good momentum in the business. The two fundamental drivers are twofold. One is we're really benefiting from a new product, which we talked quite a bit here about Q4 last year and Q1, be it coffee makers, be it the rice and grain cooker, be it the portable appliances. We have really, really good momentum coming from a new product. Frankly, even our, call it, bread and butter stand mixer business is doing well despite a market which is not really growing. Yeah, Susan, it's Marc. yeah susan it's marc First of all, obviously we're very pleased with the SDA performance year to date. first of all obviously we're very pleased with the sda performance year to date We had a very strong Q1, we had a very strong Q2, and right now it looks like we will also have a very strong Q3. we had a very strong q1 we had a very strong q2 and right now it looks like we will also have a very strong q3 We feel very good about it. we feel very good about it We have good momentum in the business. we have good momentum in the business The two fundamental drivers are twofold. the two fundamental drivers are twofold One is we're really benefiting from a new product, which we talked quite a bit here about Q4 last year and Q1, be it coffee makers, be it the rice and grain cooker, be it the portable appliances. one is we're really benefiting from a new product which we talked quite a bit here about q4 last year and q1 be it coffee makers be it the rice and grain cooker be it the portable appliances We have really, really good momentum coming from a new product. we have really really good momentum coming from a new product Frankly, even our, call it, bread and butter stand mixer business is doing well despite a market which is not really growing. frankly even our call it bread and butter stand mixer business is doing well despite a market which is not really growing With new colors, new accessories, new bowls, it's a good business and we drive very strong product mixture. The second part is our direct to consumer business has been growing really nicely. This is, I would say, a business which is because everybody knows stand mixer and many other products, which is almost geared towards a direct consumer business. We've seen very strong growth in particular in North America, but also in Europe, where we already have a very significant portion of our business as direct to consumer business. These were the two fundamental catalysts for the strong first half. The reason why we're still, you know, it's the SDA nature is SDA is very back half loaded by definition. There's a significant amount of revenues just concentrated on Q3 and Q4, more so than in the majors business. With new colors, new accessories, new bowls, it's a good business and we drive very strong product mixture. with new colors new accessories new bowls it's a good business and we drive very strong product mixture The second part is our direct to consumer business has been growing really nicely. the second part is our direct to consumer business has been growing really nicely This is, I would say, a business which is because everybody knows stand mixer and many other products, which is almost geared towards a direct consumer business. this is i would say a business which is because everybody knows stand mixer and many other products which is almost geared towards a direct consumer business We've seen very strong growth in particular in North America, but also in Europe, where we already have a very significant portion of our business as direct to consumer business. we've seen very strong growth in particular in north america but also in europe where we already have a very significant portion of our business as direct to consumer business These were the two fundamental catalysts for the strong first half. these were the two fundamental catalysts for the strong first half The reason why we're still, you know, it's the SDA nature is SDA is very back half loaded by definition. the reason why we're still you know it's the sda nature is sda is very back half loaded by definition There's a significant amount of revenues just concentrated on Q3 and Q4, more so than in the majors business. there's a significant amount of revenues just concentrated on q3 and q4 more so than in the majors business That's why right now I take these first two quarters with a smile and let's see how the rest turns out. We still know we still have a big mountain to climb, just given the seasonality. That's why right now I take these first two quarters with a smile and let's see how the rest turns out. that's why right now i take these first two quarters with a smile and let's see how the rest turns out We still know we still have a big mountain to climb, just given the seasonality. we still know we still have a big mountain to climb just given the seasonality

Speaker 5: I mean, I think, Susan, also just the margins that we have in that business right now really speak to the strength of the brand and the products. Obviously we're very excited about it. They've also had an impact of tariffs, whether it's exporting to other countries outside the U.S. stand mixers or products that they've brought in from Asia. Again, despite that, you look at that business and the margins are completely on track. I think that just goes back to tell you how strong that business really is. I mean, I think, Susan, also just the margins that we have in that business right now really speak to the strength of the brand and the products. i mean i think susan also just the margins that we have in that business right now really speak to the strength of the brand and the products Obviously we're very excited about it. obviously we're very excited about it They've also had an impact of tariffs, whether it's exporting to other countries outside the U.S. stand mixers or products that they've brought in from Asia. they've also had an impact of tariffs whether it's exporting to other countries outside the u.s stand mixers or products that they've brought in from asia Again, despite that, you look at that business and the margins are completely on track. again despite that you look at that business and the margins are completely on track I think that just goes back to tell you how strong that business really is. i think that just goes back to tell you how strong that business really is

Speaker 7: Yeah, okay, that's very helpful color. Maybe turning to capital allocation and the decision to recommend the board reduce the dividend. Can you just talk about how you're thinking of shareholder returns in this environment, how that factors into your priorities and maybe the path from here as you do start to delever the balance sheet further. Yeah, okay, that's very helpful color. yeah okay that's very helpful color Maybe turning to capital allocation and the decision to recommend the board reduce the dividend. maybe turning to capital allocation and the decision to recommend the board reduce the dividend Can you just talk about how you're thinking of shareholder returns in this environment, how that factors into your priorities and maybe the path from here as you do start to delever the balance sheet further. can you just talk about how you're thinking of shareholder returns in this environment how that factors into your priorities and maybe the path from here as you do start to delever the balance sheet further

Speaker 5: Yes, Susan, I'll start off with that. First off, we remain committed to return cash to shareholders and we remain committed to our dividend and we also remain confident in our business. I think that's critical to really say, and this, as you heard in the prepared remarks, this was a deliberate action. We didn't take this in terms of a short term decision. We really looked at where we are, what our capital allocation priorities are, where we want to invest, that we want to continue to deleverage, but we also want to invest in our U.S. business because as you heard from Marc's comments, we really believe strongly in the U.S. housing market and that there will be a recovery here. Yes, Susan, I'll start off with that. yes susan i'll start off with that First off, we remain committed to return cash to shareholders and we remain committed to our dividend and we also remain confident in our business. first off we remain committed to return cash to shareholders and we remain committed to our dividend and we also remain confident in our business I think that's critical to really say, and this, as you heard in the prepared remarks, this was a deliberate action. i think that's critical to really say and this as you heard in the prepared remarks this was a deliberate action We didn't take this in terms of a short term decision. we didn't take this in terms of a short term decision We really looked at where we are, what our capital allocation priorities are, where we want to invest, that we want to continue to deleverage, but we also want to invest in our U.S. business because as you heard from Marc's comments, we really believe strongly in the U.S. housing market and that there will be a recovery here. we really looked at where we are what our capital allocation priorities are where we want to invest that we want to continue to deleverage but we also want to invest in our u.s business because as you heard from marc's comments we really believe strongly in the u.s housing market and that there will be a recovery here Part of what we had to do is we had to look at not just the short term, but also what we want to invest for the long term. We felt at this time that reducing the dividend down to $3.60 on an annual basis is the right level. That's also very comparable to where we were in a pre-COVID environment on similar types of earnings. We feel it's the right level of return and we want to continue to return cash to shareholders. We also feel it fits best with where the business is right now and where our priorities are. Part of what we had to do is we had to look at not just the short term, but also what we want to invest for the long term. part of what we had to do is we had to look at not just the short term but also what we want to invest for the long term We felt at this time that reducing the dividend down to $3.60 on an annual basis is the right level. we felt at this time that reducing the dividend down to $3.60 on an annual basis is the right level That's also very comparable to where we were in a pre-COVID environment on similar types of earnings. that's also very comparable to where we were in a pre-covid environment on similar types of earnings We feel it's the right level of return and we want to continue to return cash to shareholders. we feel it's the right level of return and we want to continue to return cash to shareholders We also feel it fits best with where the business is right now and where our priorities are. we also feel it fits best with where the business is right now and where our priorities are

Speaker 2: Susan, maybe just smart from my perspective. Obviously, whenever you make the recommendation of a board to take the annual dividend back to pre-COVID level, it's not an easy decision. Ultimately, it comes down to we see a clear path to pre-COVID margins on the respective views, and that's what we've reflected. Keep in mind the existing annual dividend was set at the peak of COVID. Right now, we don't see a short-term path to COVID type of peak margins. Even more important, ultimately it's a decision for, it's not because the funding, as you heard from Jim before, we are well funded and I'm very pleased that we have this $1.2 billion funding behind us. It is ultimately about we want to create the financial capacity going forward. We're very confident about our business, but I want to have, frankly, I want to have capacity paying down debt. Susan, maybe just smart from my perspective. susan maybe just smart from my perspective Obviously, whenever you make the recommendation of a board to take the annual dividend back to pre-COVID level, it's not an easy decision. obviously whenever you make the recommendation of a board to take the annual dividend back to pre-covid level it's not an easy decision Ultimately, it comes down to we see a clear path to pre-COVID margins on the respective views, and that's what we've reflected. ultimately it comes down to we see a clear path to pre-covid margins on the respective views and that's what we've reflected Keep in mind the existing annual dividend was set at the peak of COVID. keep in mind the existing annual dividend was set at the peak of covid Right now, we don't see a short-term path to COVID type of peak margins. right now we don't see a short-term path to covid type of peak margins Even more important, ultimately it's a decision for, it's not because the funding, as you heard from Jim before, we are well funded and I'm very pleased that we have this $1.2 billion funding behind us. even more important ultimately it's a decision for it's not because the funding as you heard from jim before we are well funded and i'm very pleased that we have this $1.2 billion funding behind us It is ultimately about we want to create the financial capacity going forward. it is ultimately about we want to create the financial capacity going forward We're very confident about our business, but I want to have, frankly, I want to have capacity paying down debt. we're very confident about our business but i want to have frankly i want to have capacity paying down debt Frankly, also with the U.S. market shaping up the way we described earlier, next year will be very attractive to invest in the U.S., and we just want to create the capacity in our balance sheet. That is ultimately the key driver for the decision. Frankly, also with the U.S. market shaping up the way we described earlier, next year will be very attractive to invest in the U.S., and we just want to create the capacity in our balance sheet. frankly also with the u.s market shaping up the way we described earlier next year will be very attractive to invest in the u.s and we just want to create the capacity in our balance sheet That is ultimately the key driver for the decision. that is ultimately the key driver for the decision

Speaker 3: Your next question comes from the line of Rafe Jadrosich from Bank of America.Your line is open. Your next question comes from the line o f Rafe Jadrosich from Bank of America. your next question comes from the line o f rafe jadrosich from bank of america Your line is open. your line is open

Speaker 9: Hi, good morning. Thanks for taking my question. Hi, good morning. hi good morning Thanks for taking my question. thanks for taking my question

Speaker 2: Morning Rafe. Morning Rafe. morning rafe

Speaker 5: Morning Rafe. Morning Rafe. morning rafe

Speaker 9: Can you talk about the sellout you saw in North America MDA in the second quarter and 3Q today, and maybe talk about Whirlpool versus the broader industry. Can you talk about the sellout y ou saw in North America MDA in the second quarter and 3Q today, and maybe talk about Whirlpool versus the broader industry. can you talk about the sellout y ou saw in north america mda in the second quarter and 3q today and maybe talk about whirlpool versus the broader industry

Speaker 2: It's Marc, let me just. Of course, as you know, there is no one data source in sellout. We have sellout data from our customers, and we have a pretty good sense for our balance of sale. That's how we try to calibrate it. In Q2, I would describe sellout to be at best flat, but it's probably more like -2%, -3%. In particular, we lost some share in April, May when we went ahead of promotion and price adjustments, probably ahead of our competitors, and we picked it up a little bit more towards the end of the quarter. Coming into July, we feel pretty good about where we are. The sellout in July, and again it's too early to say so far, is a positive one for us. It's Marc, let me just. it's marc let me just Of course, as you know, there is no one data source in sellout. of course as you know there is no one data source in sellout We have sellout data from our customers, and we have a pretty good sense for our balance of sale. we have sellout data from our customers and we have a pretty good sense for our balance of sale That's how we try to calibrate it. that's how we try to calibrate it In Q2, I would describe sellout to be at best flat, but it's probably more like - 2%, - 3%. in q2 i would describe sellout to be at best flat but it's probably more like - 2% - 3% In particular, we lost some share in April, May when we went ahead of promotion and price adjustments, probably ahead of our competitors, and we picked it up a little bit more towards the end of the quarter. in particular we lost some share in april may when we went ahead of promotion and price adjustments probably ahead of our competitors and we picked it up a little bit more towards the end of the quarter Coming into July, we feel pretty good about where we are. coming into july we feel pretty good about where we are The sellout in July, and again it's too early to say so far, is a positive one for us. the sellout in july and again it's too early to say so far is a positive one for us We don't know exactly where the rest of competition sits, but right now it's in a market where certainly from a volume perspective it's probably best to still assume 0%-3%. That's how we also adjusted the industry guidance. There's one big caveat. Keep in mind the market may look reasonably okay from a unit perspective. The mix in the market is not a healthy one. It's a very strongly replacement-driven demand, and consumer sentiment just weighs on behalf of a mix of a product. That's why it's so critical that we launch all these new products because that's the ultimate lever how, despite a negative market mix trend, we can make a difference with a mix in our new products. Again, volume is one side. We don't know exactly where the rest of competition sits, but right now it's in a market where certainly from a volume perspective it's probably best to still assume 0%- 3%. we don't know exactly where the rest of competition sits but right now it's in a market where certainly from a volume perspective it's probably best to still assume 0%- 3% That's how we also adjusted the industry guidance. that's how we also adjusted the industry guidance There's one big caveat. there's one big caveat Keep in mind the market may look reasonably okay from a unit perspective. keep in mind the market may look reasonably okay from a unit perspective The mix in the market is not a healthy one. the mix in the market is not a healthy one It's a very strongly replacement-driven demand, and consumer sentiment just weighs on behalf of a mix of a product. it's a very strongly replacement-driven demand and consumer sentiment just weighs on behalf of a mix of a product That's why it's so critical that we launch all these new products because that's the ultimate lever how, despite a negative market mix trend, we can make a difference with a mix in our new products. that's why it's so critical that we launch all these new products because that's the ultimate lever how despite a negative market mix trend we can make a difference with a mix in our new products Again, volume is one side. again volume is one side The mix which comes with volume is just not where we want to have it, and that's ultimately a reflection of a broader consumer sentiment and the existing home sales, which are just very low. The mix which comes with volume is just not where we want to have it, and that's ultimately a reflection of a broader consumer sentiment and the existing home sales, which are just very low. the mix which comes with volume is just not where we want to have it and that's ultimately a reflection of a broader consumer sentiment and the existing home sales which are just very low

Speaker 9: Thank you, that's helpful. Can you just give an update on the India sale in terms of what the potential timing is, proceeds. Has the structure of it changed? What are you guys exploring there? Thank you, that's helpful. thank you that's helpful Can you just give an update on the India sale in terms of what the potential timing is, proceeds. can you just give an update on the india sale in terms of what the potential timing is proceeds Has the structure of it changed? has the structure of it changed What are you guys exploring there? what are you guys exploring there

Speaker 5: Yeah, and Rafe, this is Jim and I'd say listen, from the last call till now there's been no significant change. We still anticipate the proceeds to be in the $550 million-$600 million type of range. We still expect to close by around the end of this year. We're in the middle of the process and we continue to narrow down the number of participants in the process just as a normal process would work and work with those potential purchasers. Right now we believe it's on track and nothing's really changed. We just continue to execute the process and hopefully by the next call we'll be able to give a further update around where that is and talking more about the possible closure. Yeah, and Rafe, this is Jim and I'd say listen, from the last call till now there's been no significant change. yeah and rafe this is jim and i'd say listen from the last call till now there's been no significant change We still anticipate the proceeds to be in the $550 million- $600 million type of range. we still anticipate the proceeds to be in the $550 million- $600 million type of range We still expect to close by around the end of this year. we still expect to close by around the end of this year We're in the middle of the process and we continue to narrow down the number of participants in the process just as a normal process would work and work with those potential purchasers. we're in the middle of the process and we continue to narrow down the number of participants in the process just as a normal process would work and work with those potential purchasers Right now we believe it's on track and nothing's really changed. right now we believe it's on track and nothing's really changed We just continue to execute the process and hopefully by the next call we'll be able to give a further update around where that is and talking more about the possible closure. we just continue to execute the process and hopefully by the next call we'll be able to give a further update around where that is and talking more about the possible closure

Speaker 2: I think just for one additional point is on this one. The change has been about the expected closing of a transaction. The transaction as such, we're highly confident that it will materialize. Right now, in the updated guidance, we assume that the close would likely not technically happen in 2025 but would fall into 2026. We expect getting clarity on the transaction a lot earlier. I think just for one additional point is on this one. i think just for one additional point is on this one The change has been about the expected closing of a transaction. the change has been about the expected closing of a transaction The transaction as such, we're highly confident that it will materialize. the transaction as such we're highly confident that it will materialize Right now, in the updated guidance, we assume that the close would likely not technically happen in 2025 but would fall into 2026. right now in the updated guidance we assume that the close would likely not technically happen in 2025 but would fall into 2026 We expect getting clarity on the transaction a lot earlier. we expect getting clarity on the transaction a lot earlier

Speaker 3: Your next question comes from the line of Eric Bosshard from Cleveland Research.Your line is open. Your next question comes from the line of Eric Bosshard from Cleveland Research. your next question comes from the line of eric bosshard from cleveland research Your line is open. your line is open

Speaker 6: Thanks. Two things, if I could. The first one in the deck include a data point where the impact of tariffs you expect to offset with, I think, mostly price. I'm curious what you're seeing so far that gives you confidence that you'll be able to get the level of price that you're outlining to offset those tariffs. Thanks. thanks Two things, if I could. two things if i could The first one in the deck i nclude a data point where the impact of tariffs you expect to offset with, I think, mostly price. the first one in the deck i nclude a data point where the impact of tariffs you expect to offset with i think mostly price I'm curious what you're seeing so far that gives you confidence that you'll be able to get the level of price that you're outlining to offset those tariffs. i'm curious what you're seeing so far that gives you confidence that you'll be able to get the level of price that you're outlining to offset those tariffs

Speaker 2: Yeah. So Eric, basically we largely already implemented the necessary pricing action with our promotion price increase and some list price increases in Q2. That's what I was referring to earlier. What needed to be done to offset the tariffs we technically put in place right now is somewhat matched by that positive impact because we lost some mix in Q2. The mix has been very unhealthy. You have two offsetting items. One, we see a positive impact from all the actions which we've done in promotional price adjustments and list price increases. The negative is a little bit of a downside mix. Again, in terms of the actions that need to be done, we largely factored in and basically executed or are executing what needs to be done in Q2. This is also in the context of still a globally uncertain final tariff outcome. Yeah. yeah So Eric, basically we largely already implemented the necessary pricing action with our promotion price increase and some list price increases in Q2. so eric basically we largely already implemented the necessary pricing action with our promotion price increase and some list price increases in q2 That's what I was referring to earlier. that's what i was referring to earlier What needed to be done to offset the tariffs we technically put in place right now is somewhat matched by that positive impact because we lost some mix in Q2. what needed to be done to offset the tariffs we technically put in place right now is somewhat matched by that positive impact because we lost some mix in q2 The mix has been very unhealthy. the mix has been very unhealthy You have two offsetting items. you have two offsetting items One, we see a positive impact from all the actions which we've done in promotional price adjustments and list price increases. one we see a positive impact from all the actions which we've done in promotional price adjustments and list price increases The negative is a little bit of a downside mix. the negative is a little bit of a downside mix Again, in terms of the actions that need to be done, we largely factored in and basically executed or are executing what needs to be done in Q2. again in terms of the actions that need to be done we largely factored in and basically executed or are executing what needs to be done in q2 This is also in the context of still a globally uncertain final tariff outcome. this is also in the context of still a globally uncertain final tariff outcome This does not mean that we might not have to take action down the road, but right now we feel good about where we are from pricing actions. This does not mean that we might not have to take action down the road, but right now we feel good about where we are from pricing actions. this does not mean that we might not have to take action down the road but right now we feel good about where we are from pricing actions

Speaker 5: I think on top of that too is to highlight it's not just pricing that we're taking to offset that. We're taking cost actions, we're looking at supply sourcing and other things. We're going back to our suppliers with an expectation to be able to find solutions to these increased tariff costs. I think on top of that too is to highlight it's not just pricing that we're taking to offset that. i think on top of that too is to highlight it's not just pricing that we're taking to offset that We're taking cost actions, we're looking at supply sourcing and other things. we're taking cost actions we're looking at supply sourcing and other things We're going back to our suppliers with an expectation to be able to find solutions to these increased tariff costs. we're going back to our suppliers with an expectation to be able to find solutions to these increased tariff costs

Speaker 6: Okay. I understand you've talked a lot about the noise of preloading and the impact that has. I guess excluding the impact of tariffs. Which seems like it's not really in place right now. Your North American share is contracting. I guess the protection of the tariffs are coming. Excluding that or in advance of that, why is your share not performing better? Why is your share performing like it is? Okay. okay I understand you've talked a lot about the noise of preloading and the impact that has. i understand you've talked a lot about the noise of preloading and the impact that has I guess excluding the impact of tariffs. i guess excluding the impact of tariffs Which seems like it's not really in place right now. which seems like it's not really in place right now Your North American share is contracting. your north american share is contracting I guess the protection of t he tariffs are coming. i guess the protection of t he tariffs are coming Excluding that or in advance of that, why is your share not performing better? excluding that or in advance of that why is your share not performing better Why is your share performing like it is? why is your share performing like it is

Speaker 2: Eric, first of all, as I alluded to earlier, we lost in Q2 in April, May, some share. Just to put in context, that's less than a point of share, which we lost. At the end of June, we kind of rebalanced and we're stabilizing. Of course, we absolutely do not want to lose share and we will not lose share on a full-year based period. We're very confident that largely the confidence also comes not only because of tariffs, but because of all the new products. We feel very good about the tools which we have in place. By definition, you have a huge amount of preloaded inventory which puts a lot of promotion pressure. Eric, first of all, as I alluded to earlier, we lost in Q2 in April, May, some share. eric first of all as i alluded to earlier we lost in q2 in april may some share Just to put in context, that's less than a point of share, which we lost. just to put in context that's less than a point of share which we lost At the end of June, we kind of rebalanced and we're stabilizing. at the end of june we kind of rebalanced and we're stabilizing Of course, we absolutely do not want to lose share and we will not lose share on a full-year based period. of course we absolutely do not want to lose share and we will not lose share on a full-year based period We're very confident that largely the confidence also comes not only because of tariffs, but because of all the new products. we're very confident that largely the confidence also comes not only because of tariffs, but because of all the new products We feel very good about the tools which we have in place. we feel very good about the tools which we have in place By definition, you have a huge amount of preloaded inventory which puts a lot of promotion pressure. by definition you have a huge amount of preloaded inventory which puts a lot of promotion pressure As we said before, we will not participate in every promotion and there have been a number of promotions out there that, there's no question in my mind, did not create value for the retailer or the respective competitor, period. We will not participate in that. If somebody wins a little bit of temporary share, I look at it more like, for lack of a better expression, I look at it more, yeah, we're built on quicksand. I don't need quicksand. We need structural market share which comes with good and healthy brands and products. That's what we focus on. As we said before, we will not participate in every promotion and there have been a number of promotions out there that, there's no question in my mind, did not create value for the retailer or the respective competitor, period. as we said before we will not participate in every promotion and there have been a number of promotions out there that there's no question in my mind did not create value for the retailer or the respective competitor period We will not participate in that. we will not participate in that If somebody wins a little bit of temporary share, I look at it more like, for lack of a better expression, I look at it more, yeah, we're built on quicksand. if somebody wins a little bit of temporary share i look at it more like for lack of a better expression i look at it more yeah we're built on quicksand I don't need quicksand. i don't need quicksand We need structural market share which comes with good and healthy brands and products. we need structural market share which comes with good and healthy brands and products That's what we focus on. that's what we focus on

Speaker 3: Your next question comes from the line of Michael Rehaut from JPMorgan. Your line is open. Your next question comes from the line o f Michael Rehaut from JPMorgan. your next question comes from the line o f michael rehaut from jpmorgan Your line is open. your line is open

Speaker 4: Hi, good morning. This is Alex Isaac on from Mike, thanks for taking my questions. First thing, on the demand side, with the revision downward of your demand expectations, can you sort of give some more granular details into what's driving those across regions and how should we see this trending into the rest of the year and into 2016? Do you feel it's more transitory or are these more longer term demand headwinds? Hi, good morning. hi good morning This is Alex Isaac on from Mike, thanks for taking my questions. this is alex isaac on from mike thanks for taking my questions First thing, on the demand side, with the revision downward of your demand expectations, can you sort of give some more granular details into what's driving those across regions and how should we see this trending into the rest of the year and into 2016? first thing on the demand side with the revision downward of your demand expectations can you sort of give some more granular details into what's driving those across regions and how should we see this trending into the rest of the year and into 2016 Do you feel it's more transitory or are these more longer term demand headwinds? do you feel it's more transitory or are these more longer term demand headwinds

Speaker 2: Yeah, Alex, our revision on the industry guidance, which by the use has different reasons, I would say in North America it's largely driven by consumer sentiment. You look at any data source out there, consumer sentiment is just not in a good place. Consumers like investors don't like uncertainty, unpredictability and various possible outcomes. That is right now weighing heavily on consumer mind. Yeah, Alex, our revision on the industry guidance, which by the use has different reasons, I would say in North America it's largely driven by consumer sentiment. yeah alex our revision on the industry guidance which by the use has different reasons i would say in north america it's largely driven by consumer sentiment You look at any data source out there, consumer sentiment is just not in a good place. you look at any data source out there consumer sentiment is just not in a good place Consumers like investors don't like uncertainty, unpredictability and various possible outcomes. consumers like investors don't like uncertainty unpredictability and various possible outcomes That is right now weighing heavily on consumer mind. that is right now weighing heavily on consumer mind The good thing is, and that's why this could change, we've seen in other periods consumer sentiment moves a lot faster than many other dynamics. Consumer sentiment can move in two or three months significantly. A lot will depend on the macro news, which people will see. We should not lose sight of consumer sit on a lot of home equity. That's a fact. The home equity, which still makes up a lot of consumer wealth, is in a good state. Consumers would have the wealth and the equity to invest more in the home. Right now we're holding a little bit back. I'm not trying to be overly optimistic, but these things change faster than many other macroeconomic. The other region is slightly different, I think within LAR and Latin America we've seen more broader slowdown. The economy both in Brazil, but to some extent Mexico. The good thing is, and that's why this could change, we've seen in other periods consumer sentiment moves a lot faster than many other dynamics. the good thing is and that's why this could change we've seen in other periods consumer sentiment moves a lot faster than many other dynamics Consumer sentiment can move in two or three months significantly. consumer sentiment can move in two or three months significantly A lot will depend on the macro news, which people will see. a lot will depend on the macro news which people will see We should not lose sight of consumer sit on a lot of home equity. we should not lose sight of consumer sit on a lot of home equity That's a fact. that's a fact The home equity, which still makes up a lot of consumer wealth, is in a good state. the home equity which still makes up a lot of consumer wealth is in a good state Consumers would have the wealth and the equity to invest more in the home. consumers would have the wealth and the equity to invest more in the home Right now we're holding a little bit back. right now we're holding a little bit back I'm not trying to be overly optimistic, but these things change faster than many other macroeconomic. i'm not trying to be overly optimistic but these things change faster than many other macroeconomic The other region is slightly different, I think within LAR and Latin America we've seen more broader slowdown. the other region is slightly different i think within lar and latin america we've seen more broader slowdown The economy both in Brazil, but to some extent Mexico. the economy both in brazil but to some extent mexico That is not just consumer sentiment. It's just a broader slowdown, not a bad environment, it's just slowing down. In Asia, to Jim's earlier point, particularly India, it's so much driven by the seasonal patterns of weather. You had last year very strong Q2 from pure weather perspective. This year turned out very differently. That's why we're kind of a little bit cautious more on the Asia outlook. It's more completely different dynamics. I know it sounds trivial but it's Beverly related and how hot it gets that has a big impact on that outlook. Small domestic appliance are a little bit on their own in terms of a macroeconomic perspective. I would say in general terms, more than any other category, are strongly driven by consumer sentiment because it's ultimately, yes, there's some replacement demand, but it's a very strongly discretionary demand-driven cycle. That is not just consumer sentiment. that is not just consumer sentiment It's just a broader slowdown, not a bad environment, it's just slowing down. it's just a broader slowdown not a bad environment it's just slowing down In Asia, to Jim's earlier point, particularly India, it's so much driven by the seasonal patterns of weather. in asia to jim's earlier point particularly india it's so much driven by the seasonal patterns of weather You had last year very strong Q2 from pure weather perspective. you had last year very strong q2 from pure weather perspective This year turned out very differently. this year turned out very differently That's why we're kind of a little bit cautious more on the Asia outlook. that's why we're kind of a little bit cautious more on the asia outlook It's more completely different dynamics. it's more completely different dynamics I know it sounds trivial but it's Beverly related and how hot it gets that has a big impact on that outlook. i know it sounds trivial but it's beverly related and how hot it gets that has a big impact on that outlook Small domestic appliance are a little bit on their own in terms of a macroeconomic perspective. small domestic appliance are a little bit on their own in terms of a macroeconomic perspective I would say in general terms, more than any other category, are strongly driven by consumer sentiment because it's ultimately, yes, there's some replacement demand, but it's a very strongly discretionary demand-driven cycle. i would say in general terms more than any other category are strongly driven by consumer sentiment because it's ultimately yes there's some replacement demand but it's a very strongly discretionary demand-driven cycle Here, we're a little bit more cautious. Also, the same applies to what I said earlier: the big seasonal SDA is coming, and it will be very important to see how consumer sentiment does around the September-October timeline because that will shape the industry perspective to a very large extent. Here, we're a little bit more cautious. here we're a little bit more cautious Also, the same applies to what I said earlier: the big seasonal SDA is coming, and it will be very important to see how consumer sentiment does around the September-October timeline because that will shape the industry perspective to a very large extent. also the same applies to what i said earlier the big seasonal sda is coming and it will be very important to see how consumer sentiment does around the september-october timeline because that will shape the industry perspective to a very large extent

Speaker 4: Thanks. Appreciate all the color on that. To dig in on SDA, I just wanted to know if you could share some more details on direct to consumer and what percentage of that is made up of SDA, and then also how the margin profile varies between direct to consumer sales versus the overall segment? Thanks. thanks Appreciate all the color on that. appreciate all the color on that To dig in on SDA, I just wanted to know if you could share some more details on direct to consumer and what percentage of that is made up of SDA, and then also how the margin profile varies between direct to consumer sales versus the overall segment? to dig in on sda i just wanted to know if you could share some more details on direct to consumer and what percentage of that is made up of sda and then also how the margin profile varies between direct to consumer sales versus the overall segment Yeah. Alex, we typically don't publish or communicate the details of a D2C business versus the rest. Let me help you calibrate a little bit. As a company, our direct-to-consumer business is in the mid to high single-digits, but with big differences across the different segments by a long shot. The highest direct-to-consumer business we have is in our Latin America business and small domestic appliances. You should ballpark getting probably close to a quarter of the business, so it's very healthy. Yeah. yeah Alex, we typically don't publish or communicate the details of a D2C business versus the rest. alex we typically don't publish or communicate the details of a d2c business versus the rest Let me help you calibrate a little bit. let me help you calibrate a little bit As a company, our direct-to-consumer business is in the mid to high single- digits, but with big differences across the different segments by a long shot. as a company our direct-to-consumer business is in the mid to high single- digits but with big differences across the different segments by a long shot The highest direct-to-consumer business we have is in our Latin America business and small domestic appliances. the highest direct-to-consumer business we have is in our latin america business and small domestic appliances You should ballpark getting probably close to a quarter of the business, so it's very healthy. you should ballpark getting probably close to a quarter of the business so it's very healthy It will never replace our business with good and established retailers. Frankly, we know there's a segment of consumers who just like to buy directly from a manufacturer. This is not in competition with our retailers. We respect our retailers. We need our retailers. It is a complement and a supplement, in particular on the products where most people know stand mixer, so it's perfect for this one. It will never replace our business with good and established retailers. it will never replace our business with good and established retailers Frankly, we know there's a segment of consumers who just like to buy directly from a manufacturer. frankly we know there's a segment of consumers who just like to buy directly from a manufacturer This is not in competition with our retailers. this is not in competition with our retailers We respect our retailers. we respect our retailers We need our retailers. we need our retailers It is a complement and a supplement, in particular on the products where most people know stand mixer, so it's perfect for this one. it is a complement and a supplement in particular on the products where most people know stand mixer so it's perfect for this one The margin structure is not completely different, but let me put, it's an attractive business for us largely also. It comes by definition with a higher revenue base, and it's still a pretty healthy margin level. As you all understand the mechanics of a direct-to-consumer business, you have quite a bit of fixed cost which comes with consumer search and buying from search. The higher revenue base, the more profitable it becomes. The margin structure is not completely different, but let me put, it's an attractive business for us largely also. the margin structure is not completely different but let me put it's an attractive business for us largely also It comes by definition with a higher revenue base, and it's still a pretty healthy margin level. it comes by definition with a higher revenue base and it's still a pretty healthy margin level As you all understand the mechanics of a direct-to-consumer business, you have quite a bit of fixed cost which comes with consumer search and buying from search. as you all understand the mechanics of a direct-to-consumer business you have quite a bit of fixed cost which comes with consumer search and buying from search The higher revenue base, the more profitable it becomes. the higher revenue base the more profitable it becomes

Speaker 3: Your final question comes from the line of Josh Wilson from Raymond James.Your line is open. Your final question comes from the line of Josh Wilson from Raymond James. your final question comes from the line of josh wilson from raymond james Your line is open. your line is open

Speaker 8: Good morning. Filling in for Sam Darkatsh. Thanks for taking my question. Squeezing me in. Good morning. good morning Filling in for Sam Darkatsh. filling in for sam darkatsh Thanks for taking my question. thanks for taking my question Squeezing me in. squeezing me in

Speaker 2: Good morning, Josh. Good morning, Josh. good morning josh

Speaker 5: Morning. Morning. morning

Speaker 8: For my first question, could you talk a little more about your assumptions for North American market share and how that's changed from a quarter ago. I know you were expecting to gain share in the second half, and now with the delays in channel inventory headwinds, does that mean like flattish share in the third quarter and bigger gains in the fourth quarter, or how are you calibrating the cadence there, Josh? For my first question, could you talk a little more about your assumptions for North American market share and how that's changed from a quarter ago. for my first question could you talk a little more about your assumptions for north american market share and how that's changed from a quarter ago I know you were expecting to gain share in the second half, and now with the delays in channel inventory headwinds, does that mean like flattish share in the third quarter and bigger gains in the fourth quarter, or how are you calibrating the cadence there, Josh? i know you were expecting to gain share in the second half and now with the delays in channel inventory headwinds does that mean like flattish share in the third quarter and bigger gains in the fourth quarter or how are you calibrating the cadence there josh

Speaker 2: In general terms, we expect the same. That is, we expect a healthy share level in the second half driven largely by the new product introductions. Keep in mind, every quarter we have more products, new products being floored. The second point is, as I mentioned earlier, we took the necessary pricing action, promotion levels in Q2. Some competitors didn't do it. They will have to catch up at one point to deal with the cost. I think that will create more of a level playing field and allows us to kind of pick up some market share. We feel good about plans for second half market share and we have no intention whatsoever to concede market share easily. In general terms, we expect the same. in general terms we expect the same That is, we expect a healthy share level in the second half driven largely by the new product introductions. that is we expect a healthy share level in the second half driven largely by the new product introductions Keep in mind, every quarter we have more products, new products being floored. keep in mind every quarter we have more products new products being floored The second point is, as I mentioned earlier, we took the necessary pricing action, promotion levels in Q2. the second point is as i mentioned earlier we took the necessary pricing action promotion levels in q2 Some competitors didn't do it. some competitors didn't do it They will have to catch up at one point to deal with the cost. they will have to catch up at one point to deal with the cost I think that will create more of a level playing field and allows us to kind of pick up some market share. i think that will create more of a level playing field and allows us to kind of pick up some market share We feel good about plans for second half market share and we have no intention whatsoever to concede market share easily. we feel good about plans for second half market share and we have no intention whatsoever to concede market share easily

Speaker 8: As it relates to the dividend change, could you talk about what? Has changed either in your plans or the environment that catalyzed you to make the decision now versus three, six months ago? As it relates to the d ividend change, could you talk about what? as it relates to the d ividend change could you talk about what Has changed either in your plans or the environment that catalyzed you to make the decision now versus three, six months ago? has changed either in your plans or the environment that catalyzed you to make the decision now versus three six months ago

Speaker 5: Yeah, and this is Jim and I would say, you know, Josh, again, probably three, six months ago, we really looked at the environment. We said there was a lot to it that we still wanted to see and understand better. We wanted to see how the tariffs rolled out. We wanted to see the impact it would have on volumes. Again, as I said, we remain confident in the business, remain committed to the dividend, but we just thought it was very prudent to really understand the environment better and then make the right appropriate, deliberate capital allocation decision. Yeah, and this is Jim and I would say, you know, Josh, again, probably three, six months ago, we really looked at the environment. yeah and this is jim and i would say you know josh again probably three six months ago we really looked at the environment We said there was a lot to it that we still wanted to see and understand better. we said there was a lot to it that we still wanted to see and understand better We wanted to see how the tariffs rolled out. we wanted to see how the tariffs rolled out We wanted to see the impact it would have on volumes. we wanted to see the impact it would have on volumes Again, as I said, we remain confident in the business, remain committed to the dividend, but we just thought it was very prudent to really understand the environment better and then make the right appropriate, deliberate capital allocation decision. again as i said we remain confident in the business remain committed to the dividend but we just thought it was very prudent to really understand the environment better and then make the right appropriate deliberate capital allocation decision As we said, this is as much about us looking at wanting to increase the capacity within our balance sheet, but also to create the ability to invest further in our U.S. manufacturing footprint. We really do believe, based on what Marc said earlier, in the actions that the administration is taking, this can set us up to win. We wanted to create that additional capacity and we felt this was the right time. As we said, this is as much about us looking at wanting to increase the capacity within our balance sheet, but also to create the ability to invest further in our U.S. manufacturing footprint. as we said this is as much about us looking at wanting to increase the capacity within our balance sheet but also to create the ability to invest further in our u.s manufacturing footprint We really do believe, based on what Marc said earlier, in the actions that the administration is taking, this can set us up to win. we really do believe based on what marc said earlier in the actions that the administration is taking this can set us up to win We wanted to create that additional capacity and we felt this was the right time. we wanted to create that additional capacity and we felt this was the right time

Speaker 2: I think with that we come to the end of a Q&A session. First of all, I want to thank you all for joining us today. Obviously, you heard a lot of details today. I think the important thing really as a key takeaway is, of course, a company like ours, we don't take an adjustment of our guidance easily. I'm the first one to admit it. At the same time, hopefully you heard all today we are very confident and nothing has changed about the investment thesis. It's not just relying on the fact that we will be net winners of a tariff environment. It is largely coming from a confidence and feedback we get on our new products. Nothing has changed in our mid to long term perspective on housing markets. I think with that we come to the end of a Q&A session. i think with that we come to the end of a q&a session First of all, I want to thank you all for joining us today. first of all i want to thank you all for joining us today Obviously, you heard a lot of details today. obviously you heard a lot of details today I think the important thing really as a key takeaway is, of course, a company like ours, we don't take an adjustment of our guidance easily. i think the important thing really as a key takeaway is of course a company like ours we don't take an adjustment of our guidance easily I'm the first one to admit it. i'm the first one to admit it At the same time, hopefully you heard all today we are very confident and nothing has changed about the investment thesis. at the same time hopefully you heard all today we are very confident and nothing has changed about the investment thesis It's not just relying on the fact that we will be net winners of a tariff environment. it's not just relying on the fact that we will be net winners of a tariff environment It is largely coming from a confidence and feedback we get on our new products. it is largely coming from a confidence and feedback we get on our new products Nothing has changed in our mid to long term perspective on housing markets. nothing has changed in our mid to long term perspective on housing markets If you want to say so, the investment thesis is as strong as ever, but we felt it appropriate and prudent to adjust the guidance to reflect the delays of certain effects which positively impact our business. With that, again, thank you all and we will talk to each other during the next earnings call. Thanks a lot. If you want to say so, the investment thesis is as strong as ever, but we felt it appropriate and prudent to adjust the guidance to reflect the delays of certain effects which positively impact our business. if you want to say so the investment thesis is as strong as ever but we felt it appropriate and prudent to adjust the guidance to reflect the delays of certain effects which positively impact our business With that, again, thank you all and we will talk to each other during the next earnings call. with that again thank you all and we will talk to each other during the next earnings call Thanks a lot. thanks a lot

Speaker 3: Ladies and gentlemen, that concludes today's conference call. You may now disconnect. Ladies and gentlemen, that concludes today's conference call. ladies and gentlemen that concludes today's conference call You may now disconnect. you may now disconnect