🔌 Is Whirlpool’s Strategic Review Good Enough?

NVIDIA shares fall premarket.


Hey Global Investor! Here’s what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Wednesday’s Close) 3,978.73 +37.25 (0.95%)

NASDAQ (Wednesday’s Close) 11,434.74 +170.29 (1.51%)

FTSE 100 (5 PM IST) 7,522.96 +0.21 (0.002%)

NIFTY 50 (Today’s Close) 16,170.15 +144.35 (0.90%)

USDINR (Today’s Close) 77.57 (1 Year +6.55%)


🔥 Top Movers

HMLP +31.82%
PRTG +18.56%
CAL +16.20%

VRCA -56.85%
SGHC -19.21%
TWOU -13.77%


🔌 Whirlpool: Revising Priorities?

The world’s largest appliance manufacturer Whirlpool Corporation (WHR), is reprioritizing its business. Like any other consumer durables company, it faces cost and supply-side issues. Shares are at a 52-week low. Can Whirlpool continue rewarding shareholders as it has in the past?

Realigning Geographies

In 1911, Louis Upton, an insurance salesman, came up with the idea of adding an electric motor to a manual clothes washer. Upton Machine Company thus produced the first electric motor-driven wringer washer. Just before The Great Depression in 1929, Upton Machine Company merged with the Nineteen Hundred Washer Company and became Nineteen Hundred Corporation.

In 1947, the company introduced the automatic, spinner-type washer, sold under the brand name “Whirlpool.” The Nineteen Hundred Corporation was renamed Whirlpool Corporation in 1949 and launched other home appliances, including automatic washers, dryers, and irons.

Today, Whirlpool is a $20+B revenue company employing ~70K people and home to brands such as JennAir, KitchenAid, Maytag, and Amana. Along with 33 manufacturing sites across ten countries, Whirlpool also has multiple technology and research centers.

Whirlpool is now embarking on a path to transform its portfolio and position itself for the “new world.” With rising geopolitical tensions, cost of freight, and increasing trade barriers, the company wants to emphasize regional and local scale over global presence.

As part of its revised strategy, the company will focus on high-growth, high-margin businesses. It will focus its efforts within the Americas, where most of its revenue comes from, and India, where it has a significant presence. Whirlpool of India has a 22.8% market share in the direct cool segment, 17.5% share in the frost-free segment, and 14% share in the washer segment.

Baby steps in this direction began in 2021 when Whirlpool sold a majority stake in its China business to local home appliance giant Galanz for $316M. Whirlpool is undertaking a strategic review of its EMEA (Europe, Middle East, and Africa) business in light of the Russia-Ukraine war.

EMEA is the second-largest market for Whirlpool behind the Americas, with $5B in sales for 2021, 10 manufacturing and R&D centers, along with 17.4K employees. The review is likely to be completed by Q3 this year.

Will Generous Payouts Continue?

The plot is none too different from the rest of corporate America. Higher input costs. Supply chain snarls. Whirlpool has already raised its costs forecast by another $600M to $1.8B for 2022. The impact of inflation and shortage of critical components spilled over into Whirlpool’s earnings, as evident from its Q1 results, which it released last month.

The quarter saw net sales decline 8.2% Y-o-Y. Profits fell 28% Y-o-Y to $313M. Latin America was the only region where sales grew (up 4%). The result: a recalibration of the 2022 guidance.

Whirlpool’s 2022 Guidance:

  • Revenue: 2-3% growth, down from 5-6%
  • North America: Flat from 2-3% growth
  • EMEA: Decline of 3-5% from growth of 0-2%
  • Latin America: Decline of 2-4%
  • Asia: 5-6% growth

The company hiked prices by as much as 12% last year across the board to combat inflation. This year, it aims to increase prices enough to offset the entire input cost inflation witnessed so far. The big question is whether demand will fall as prices rise.

The company is betting people will continue to stay in their current homes rather than buy new homes, which means remodeling existing homes will pick up. Replacement of appliances being half of its business, Whirlpool is looking to capitalize on this trend despite a shortage of microchips and other critical components for many products.

Production and inflation issues apart, Whirlpool has been a consistent performer as far as shareholders are concerned. The company has grown its annual EPS from $5 in 2012 to a record $26.6 in 2021.

The topline has also grown from $18B to $22B, while free cash flow has jumped from $200M to $2B. The quarterly dividend was up 25% in Q1 to $1.75, the 10th straight year of hikes, and returned $1.4B to shareholders in 2021.

On the valuation front, Whirlpool trades at 6.7x (trailing twelve months price-to-earnings ratio), below its peers that range between 8x and 14x. Shares are trading near their 52-week low. While the company believes demand for its products in the second half of 2022 will make up for a slow start in the first half, investors may be circumspect about potential EPS and dividend cuts.

There is light at the end of the tunnel. Is that a freight train carrying the household appliances from Whirlpool is the big question!

Market Reaction
WHR ended at $173.87, up 3.55%.

Company Snapshot 📈

WHR $173.87 +5.96 (3.55%)

Analyst Ratings (09 Analysts) BUY 33%  HOLD 56%  SELL 11%


Newsworthy 📰

Bucking The Trend: Dick’s Sporting Goods shares rally despite lower forecast; company says outdoor hobbies will outlast pandemic (DKS +9.69%)

Despite Record Sales: NVIDIA stock falls on light guidance, CFO says company will slow hiring (NVDA -5.68%) (Premarket)

Melting?: Snowflake shares fall as executives forecast a narrower margin than expected (SNOW -13.23%) (Premarket)


Later Today 🕒

  • Alibaba Group Holdings Ltd. Earnings (BABA)
  • Costco Wholesale Corp. Earnings (COST)
  • Dell Technologies Inc. Earnings (DELL)
  • Dollar General Corporation Earnings (DG)
  • Dollar Tree Inc. Earnings (DLTR)
  • Macy’s Inc. Earnings (M)
  • Autodesk Inc. Earnings (ADSK)
  • Baidu Inc. Earnings (BIDU)
  • Brady Corp. Earnings (BRC)
  • The Buckle Inc. Earnings (BKE)
  • Burlington Stores Inc. Earnings (BURL)
  • Evogene Ltd. Earnings (EVGN)
  • Gap Inc. Earnings (GPS)
  • Medtronic Plc. Earnings (MDT)
  • Royal Bank of Canada Earnings (RY)
  • VMware Inc. Earnings (VMW)
  • Zscaler Inc. Earnings (ZS)
  • 6:00 PM IST: Initial Jobless Claims

Today’s Fun Fact

The six reactors in the 2011 Fukushima Nuclear Power Plant catastrophe had been designed by General Electric


Disclaimer: The content of this article has been created and published by Winvesta India Technologies Pvt. Ltd., in order to ease the reader’s understanding of the subject matter. The information and/or content (collectively “Information”) provided herein is general information sourced through various news reports and does not constitute a research report or a research analysis. The Information is not intended to offer advice, target or solicit any particular customer or group of customers to buy or sell securities. 

Winvesta does not render any research or advisory services and provides a more detailed description of its services on its website and mobile application along with the terms and conditions published therein from time to time. While reasonable care has been exercised to ensure that the Information is adequate and reliable, no representation is made by Winvesta as to its accuracy or completeness and Winvesta, its affiliates, subsidiaries and employees accept no liability of whatsoever nature for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this Information. Neither Winvesta nor any of its affiliates are acting as an investment adviser, research analyst or in any other fiduciary capacity. Accordingly, reader’s are expected to undertake their own due diligence in consultation with their own advisors and are advised not to solely rely on the Information. Any such reliance shall be at the reader’s own risk. 

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.


Start Building Your Global Portfolio Today

Download Winvesta App now to Get Started