Whirlpool Inventory Reduction, Low Discretionary Spending Led To Q4 Revenue Miss, Says Analyst

Goldman Sachs analyst Susan Maklari reiterated a Buy rating on the shares of Whirlpool Corp (NYSE:WHR) with a price target of $138.

Whirlpool reported adjusted fourth-quarter EPS of $4.57, exceeding the analyst’s forecast of $4.08 and the FactSet consensus of $4.34.

The stronger-than-expected performance relative to the analyst’s model was driven by a lower adjusted tax rate, which added $1.61 to the results, as well as interest expenses and other factors contributing an additional $0.22.

Revenue dropped by 18.7%, slightly better than the analyst’s estimate of -18.9%, adding $0.01. However, this was partially offset by an adjusted EBIT margin 118 basis points lower than the analyst’s estimate of 6.0%, which reduced earnings by $1.35.

Overall, the results were influenced by a significant inventory reduction at a major North American retailer and ongoing weakness in discretionary spending, which pressured product mix and margins.

Looking ahead, the 2025 adjusted EPS guidance was set at approximately $10, below the analyst’s forecast of $10.75 and the consensus estimate of $11.46.

Revenues in the North America MDA segment declined by 1% year-over-year, better than the analyst’s expected drop of 2%, as the analyst estimated that volumes were relatively stable while price/mix challenges remained consistent with the previous quarter.

Small Domestic Appliance revenues grew by 6%, falling short of the analyst’s 8% estimate, as a challenging market environment partially offset strong direct-to-consumer sales and new product introductions.

Additionally, investments in marketing and new products caused the segment's margin to fall 350 basis points, declining by 127 basis points year-over-year to 12.5%, said the analyst.

The company plans to sell about 31% of its stake in Whirlpool India for $550-$600 million, with the transaction expected to be completed by mid- to late 2025.

Management intends to use the proceeds to reduce debt by around $700 million in 2025 and refinance $1.1-$1.2 billion in upcoming maturities.

The analyst will be looking for updates on the U.S. demand given the macro backdrop, the success of recent new product introductions, key factors to margins including price realization, inflation, and cost reductions, and the impact
of potential trade actions.

WHR Price Action: Whirpool shares are trading lower by 17.58% at $106.96 at publication Thursday.

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