Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 2: Stenebek on Bloomberg Radio.
Speaker 1: Looking at shares of Whirlpool, they're up about three quarters
Speaker 1: of one percent here in the aftermarket. This company also
Speaker 1: reporting earnings just moments ago. Of course, the owner of
Speaker 1: Maytag very other brands too, but lowered its full year
Speaker 1: earnings forecast as consumers continued to shy away from some
Speaker 1: of those big ticket appliance purchases amid a weakening housing market,
Speaker 1: something we've talked about a lot here at Bloomberg. Adjusted
Speaker 1: earnings per year will be about twelve dollars this year,
Speaker 1: the company said, down from the thirteen to fifteen it
Speaker 1: had previously seen. Meantime, Alice were looking for about twelve
Speaker 1: dollars fifty six cents a share, according to our average
Speaker 1: projections compiled here at Bloomberg Company, though keeping its full
Speaker 1: year revenue estimate the same tim at sixteen point nine
Speaker 1: billion dollars.
Speaker 2: Let's get to the chairman, President and CEO of Whirlpool,
Speaker 2: Mark Bitzer. He joins us from Michigan. Mark, good to
Speaker 2: have you with us, appreciate you joining us just after
Speaker 2: these numbers crossed the wire. Tell us about the quarter
Speaker 2: and specifically why you cut the earnings forecast.
Speaker 3: Yeah, Tim and Carol. First of all, thanks for having
Speaker 3: me on the show again. You know, overall before we
Speaker 3: talk about the earnings for we actually feel good about
Speaker 3: our Q two you know, we we said also after
Speaker 3: the Q one call, this here is all going to
Speaker 3: be about margin expansion with every quarter, and Q two
Speaker 3: was a sizeable sequential margin improvement full point on a
Speaker 3: global level, led by all important North America business which
Speaker 3: ultimately relied also on getting better promotion pricing. So we
Speaker 3: feel good about the progress we made. Yet at the
Speaker 3: same time, we also, you know, knowing the weakness of
Speaker 3: a housing market which is still emphasis on still just there.
Speaker 3: We don't see the housing market recovering as fast as
Speaker 3: we originally assumed, probably like everybody else when we entered
Speaker 3: the year. So we're still forecasting for Q three and
Speaker 3: Q four berber margin expansion and improvement. So we feel
Speaker 3: good about the progression. It just not happening at the
Speaker 3: pace which we had originally in mind, and the market
Speaker 3: is not recovering at the pace which we already had
Speaker 3: in mind. But that's my only question when it happens,
Speaker 3: not if it happens. It will happen, but it just
Speaker 3: later when we originally assumed.
Speaker 1: So, you know, I always feel like when we talk
Speaker 1: with you Mark, you know, we think about like the
Speaker 1: pre pandemic world, the pandemic world, and like our recovery.
Speaker 1: In terms of some of the numbers, the consumer trends,
Speaker 1: the buying patterns, is it below what we saw pre pandemic?
Speaker 3: You know, Carol, you have two almost offsetting trends. One
Speaker 3: is the replacement market, which is very strong OSPAM or
Speaker 3: volume site, and that is ultimately tied to increase applient's
Speaker 3: usage following COVID and just all of the in home
Speaker 3: trends and people just spending more time in home. So
Speaker 3: replacement side is very strong. The unfortunate side from a
Speaker 3: business perspective, that typically doesn't come with a rich mix
Speaker 3: because it's not a discretionary purchase. The discretionary side that
Speaker 3: is all tied towards how seeing existing home sales and
Speaker 3: new home sales, and that's the part which is way
Speaker 3: soft when anybody assumed at this point, and frankly also
Speaker 3: with the numbers which came out yesterday and existing home
Speaker 3: sales put back back to two or eight levels. I mean,
Speaker 3: it's kind of multi decade low. And of course that
Speaker 3: is the part of a business which tends to come
Speaker 3: with a richer mix for us, and that's the soft part.
Speaker 3: So you have two offsetting trends which kind of overlay.
Speaker 3: I mean, we would, of course going forward, we love
Speaker 3: to see the replacement trend, but at one point you
Speaker 3: will see the recovery of discretionary side.
Speaker 1: We've talked with you about this replacement versus you know, discretionary.
Speaker 1: What's the bigger part of your business? Is it people
Speaker 1: replacing items or saying, hey, I feel like doing this
Speaker 1: discretionary right now?
Speaker 3: The replacement start as well over sixty percent, and put
Speaker 3: that in a storic context, I mean you typicate it
Speaker 3: for multi decades on around fifty or even below fifty percent.
Speaker 3: That doesn't sound like a whole lot, but it actually
Speaker 3: makes a big difference in how and how the mix
Speaker 3: comes through for your overall business. So again that's that's
Speaker 3: you know, we like the volume, but it it's not
Speaker 3: a very rich mix.
Speaker 2: The biggest part of your your market or the biggest
Speaker 2: part of your business in terms of segments, refrigeration, laundry
Speaker 2: cooking a close third. Where are you going to? Where
Speaker 2: do you see the most growth?
Speaker 3: You know, again, it's right now. Overall it's split on
Speaker 3: mechanicy it's large in replacement, so laundry is still very strong, refrigeration.
Speaker 3: The kitchen is still a little bit soft because that
Speaker 3: comes with a replacement or remodel of an entire kitchen.
Speaker 3: But you know, it's it's it's more behinhend the entire
Speaker 3: kitchen suite like Kitchen Aid suite or Danner suite, which
Speaker 3: is right now, software when we would expect in an
Speaker 3: rmous cycle.
Speaker 1: All right, so we be remiss by not addressing the
Speaker 1: elephant in the kitchen or if you will. Last month,
Speaker 1: Whirlpool shares you know, jumped ruders had reported that Robert
Speaker 1: Bosch was considering a bit for the company that they've
Speaker 1: been pushing, you know, that company's been pushing kind of
Speaker 1: outside its business. Did it make a bit for the company?
Speaker 1: What can you tell us about that?
Speaker 3: Unfortunately, I can't tell you a whole lot more. When
Speaker 3: we stated already is that we just don't as a policy,
Speaker 3: we don't comment on rumors of market speculation. As you know,
Speaker 3: it's it's been one article out there which triggered a
Speaker 3: lot of noise. And you know, we also in the
Speaker 3: past were well rumors about open in the past, and
Speaker 3: there will be rumors about going forward, and we just
Speaker 3: don't speculate on and comment on these ones. So unfortunately,
Speaker 3: I know you were pokeing this one, but I can't
Speaker 3: tell you a whole lot.
Speaker 1: I have to poke a little bit more though, is
Speaker 1: it is it a rumor? I mean, is the company
Speaker 1: for sale at this point? And is that something that
Speaker 1: maybe you've been getting some pressure from investors.
Speaker 3: No, so again, it is a rumor, and we can't
Speaker 3: comment and we won't comment on this specific rumor. You know,
Speaker 3: but we're public listed company, Carol, So now by definition,
Speaker 3: you know, very in a certain mayle companies for sale
Speaker 3: every morning at nine thirty stock market opens, right now.
Speaker 3: It's a good deal, you know, but.
Speaker 1: There's sales and then there's sales. You know, you know
Speaker 1: how this goes.
Speaker 2: You're you're joking about saying it's a good deal. But
Speaker 2: what in your opinion do you think investors are missing
Speaker 2: about the Whirlpool story right now? Down nineteen percent so
Speaker 2: far this year.
Speaker 3: Yeah, you know, you know, Tim, I shouldn't be arrogant
Speaker 3: about the investor. The market is always right. So what
Speaker 3: I think the argument for what would to be made is, yes,
Speaker 3: of course we're still emphasis on still in a negative macrocycle,
Speaker 3: but that will turn at one point and built I
Speaker 3: eve a US housing market and that will not be
Speaker 3: just a you know, a short recovery. That will be
Speaker 3: probably a multi year recovery of a housing market. There's
Speaker 3: literally not a single company better position to benefit from
Speaker 3: the upside where a key supplier of eight out of
Speaker 3: the top ten US builders, we're very strong without portfolio
Speaker 3: all the homes. So once we market recovers, I think
Speaker 3: we will be a disproportionate beneficiary from a market. And
Speaker 3: you know that's my definition of market is always right.
Speaker 3: But I would say that's the argument, particularly for a
Speaker 3: long term investor.
Speaker 2: Hey, Mark, we also have to go on that though.
Speaker 1: If the market's always right, your stock in a big way.
Speaker 1: In June, on this Reuters report that Bosh was considering,
Speaker 1: we're still.
Speaker 2: She's still poking. She's poking.
Speaker 1: So if the market's always right that they were excited
Speaker 1: about a deal, does it make sense to you, I.
Speaker 3: Don't know, you know, yeah, I appreciate your relentness, but
Speaker 3: I can't and I won't tell you a whole lot more. Listen,
Speaker 3: you know there's there's always speculation element, but you might
Speaker 3: get in the stock and as you know, very very
Speaker 3: short trade and and and people who are kind of
Speaker 3: not long term investors right now. Again it's we had
Speaker 3: also these speculation rumors in the past, and again I
Speaker 3: expect them also in the future. And that's that's just
Speaker 3: the nature of a public there's a company. But again
Speaker 3: there's no you won't get a whole lot more for
Speaker 3: me on these rumors.
Speaker 2: Okay, Mark, Well, then on something really easy for you
Speaker 2: to answer us politics? I know, I know, please come
Speaker 2: back after all these questions. We love you, please, so look,
Speaker 2: no question front center and a lot of a lot
Speaker 2: of investors' minds and a lot of voters' minds. But
Speaker 2: just very briefly, does it matter to you you have
Speaker 2: a really complicated supply chain, you do some importing. Does
Speaker 2: it matter to you who's in the White House?
Speaker 3: You know, you know obviously, as you can tell for
Speaker 3: my accent, I should be careful about giving advice on
Speaker 3: US politics. But I also I'm firmly believe as a company,
Speaker 3: we encourage our employees to form a political opinion and
Speaker 3: they should vote. But I'm not going to endorse any
Speaker 3: candidate left or right. It just but we strong encourage
Speaker 3: our people to form their opinion, get informed, and vote
Speaker 3: period Now. Of course, with our strong US exposure also
Speaker 3: the manufacturing side, we're not only the last American appliance company,
Speaker 3: but we have by long shot the most jobs in
Speaker 3: the US un appliance manufacturer. Of course, we have a
Speaker 3: strong vested interest in having a competitive and fair level
Speaker 3: playing field as a US producer. So so topics like
Speaker 3: steel prices, etc. They matter for us. And we're not
Speaker 3: asking for subsidy or disproportioned help. No, we just want
Speaker 3: to be fair and we want to be you know,
Speaker 3: we don't want to have our arm tied, but one
Speaker 3: arm time behind our back as we fight. We're ready
Speaker 3: to fight, but it needs to be fair and level.
Speaker 3: And that's of course, yes, that is a strong best
Speaker 3: interest which we have.
Speaker 1: Well, you're always fair with us, and always we appreciate
Speaker 1: your time. Mark Bitzer be well, so appreciate it. Sharman
Speaker 1: Presidency of Whirlpool. Mark Bitz are joining us from Michigan
Speaker 1: Shares of warpool. They've been kicking around a little bit higher,
Speaker 1: a little bit lower in the aftermarket