Whirlpool (WHR) 22 Oct 212021 Q3 Earnings call transcript

Good morning, and welcome to Whirlpool Corporation's Third Quarter 2021 Earnings Release Call. Today's call is being recorded.

For opening remarks and introductions, I would like to turn the call over to Senior Director of Investor Relations, Korey Thomas.

Thank you, and welcome to our third quarter 2021 conference call.

Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer; Jim Peters, our Chief Financial Officer; and Joe Liotine, our Chief Operating Officer.

with website available at track section the today our of whirlpoolcorp.com. remarks a on presentation Investors Our

Before we forward-looking begin, future as you we I better expectations. want to this in we'll remind call, be Whirlpool making understanding statements assist conduct to Corporation's you that

discussed periodic Our factors reports. differ to could XX-K, latest results from these our actual due XX-Q statements materially many in and other

operations remind measures. important our want to of you they our We indicators these also presentation indicative non-GAAP that that We includes ongoing items are believe measures of be may as exclude today's business not operations. from results

information We baseline posted Relations Investor of measures for GAAP adjusted business the on will our better in section the this reconciliation comparable in directly website trends to with measures. supplemental a our all items ongoing a At directed also of time, package think listen-only analyzing are mode. most are non-GAAP operations. the provide the Listeners for you the participants to

our Following call for open be questions. will analyst remarks, prepared the

As we'd ask that, more With questions. call reminder, turn ask participants the two to I'll than over no Marc. that a

long-term operating targets. it results review to for our I inflationary in Thanks, the third take creation XXXX third want opportunity results, our over and long-term global to our I'll everyone. We our continue moving to will we our value environment, results business in expectations quarter guidance. our insights forward. Despite new share Korey, be to strong Today, addition previous and or But above to goals. a first, at Jim turn quarter supply sharing and and morning, good to constraint demonstrate consistently

morning, and everyone. good Marc, Thanks,

alongside We which in highlights inflation. consumer we delivered sustained represents turning elevated actions on third quarter chain place The a growth both Slide of third in put the results. year-over-year, We another quarter, Now X% and constrained execution X% XXXX. compared revenue exceptional the very anticipate supply to of our of yet that strong X. demand would robust growth delivered face the of we to quarter

this margins Next, cost XX.X%, early largely took the decisive which actions delivered the we XXX offset of points. expected strong inflation basis year of double-digit

adjusted billion compared $X.X flow generated to the Cash of the a ago. free increase earnings successful divestitures cash led generation by a first $X.X completion of positive in year billion, we half Additionally, in the year. of strong was

the Lastly, India we in added share million $XXX opportunistically executed investments Company. and in the in in our by the Elica quarter previous buybacks acquiring interest third majority to

in gives per successfully ability to a results environment strong to confidence difficult us guidance Our operating to $XX.XX deliver the our increase share. approximately

actions. and fully X, was offset our by to Slide we the by This of our led announced margin. particularly net and combined of third Raw and XXX cost the resins, delivered impact quarter mix price basis material execution the XXX show points. of Price resulted cost drivers basis points mix in price of inflation, unfavorable an increases. Turning expansion EBIT steel base previously margin

XX ongoing of net Additionally, basis initiatives improvement. margin productivity points delivered cost cost

logistics, facing. increased supply we companies offset many labor and than chain more initiatives are and cost ongoing Our other premiums

confident EBIT very increased technology points. and strong to will this in currency be continue pleased a by long-term results combined drive impact Overall, Lastly, investments commitment momentum America and impacted above margin Latin and XX in and very positive delivering the we XXXX marketing continued previous our margins throughout from basis beyond. are to are

strong continue We in execution we margins guidance. demonstrate. Slide capabilities to to remain discuss full and I will in actions XXXX the in revised turning we have put year protect both confident place X, Now our to the

XX% growth XX.X%. sales net and strong drive to EBIT of expect of We approximately margins

X.X% of deliver to or free cash to continue sales. flow, $X.X in expect adjusted we billion Additionally, net

to guidance $XX.XX, EPS XX%. Finally, approximately we year-over-year our increase a over of raising ongoing are

X, margin EBIT guidance. Turning show drivers to ongoing Slide the increased our of we

continue expect of mix. margin points by expansion price driven XXX basis to We

for have are our continue cost We inefficiencies cost chain, cost to focus and expectation fully as productivity. we our further to we realize net notably increased distribution takeout on offsetting results, the labor. points net Within XXX the in across efficiencies supply and basis

Inflation remain offset monitor by increase While still our unchanged, about to our the price by peak expectations billion, third mix in cost our we negatively resins, already largely in inflation globally, the and $X impacted business expect with and is continuously quarter. fully actions. steel realized be

expect are basis in to XXX impact and marketing in and America, in XX.X% margin, year Overall, EBIT primarily Latin ability expansion. to continue representing investments to our continue increased deliver our of this fourth We navigate we confident points. in by environment margins consecutive technology margin unfavorable to currency, and

Turning an to XXXX. update on capital for priorities Slide our We allocation provide X.

remains Our commitment billion $X and and over expenditures invest in research to expect fund to as development. innovation growth unchanged we and capital

of million which to to to this $XXX we the cash over shareholders Next, in expect Including shares expect quarter. over on million we with levels significant a dividends, year. over total in of to of focus shareholders, billion repurchase $XXX clear fourth a return XXXX, includes returning $X.X

turn Joe over to it to I'll review results. Now regional our

and Jim, Thanks, morning, good everyone.

America, region. we XX, review revenue demand consumer with robust X% regional the sustained in Slide to In our Turning delivered third I'll and results. quarter growth, North

by for disciplined delivered Demand margin we expect increases. driven which strong remains cost-based products execution we we into our price to of persist XXXX. another a Additionally, in operate EBIT environment, constrained high quarter with as

strength the business fundamental Lastly, and demonstrate our the outstanding agility of model. region's results

Turning Africa of price quarter. We Cost-based growth region Slide for revenue represents compared review inflation of stable Middle the I'll in in to have in confident actions which year-over-year, XX% the to impact our the and offset partially XXXX. The over third results increases quarter delivered place. remain we XX, our Europe, region. East

plan region turnaround the Our on remains for long-term track.

demand very constraints, margins inflation increases X.X% continued Mexico. XX, I'll quarter region. EBIT cost-based our strong from across despite by Turning currency. region for by results negative Latin supply and America delivered increased and Net Slide third led of our to review impact sales The XX%, price strong

Turning entirely Whirlpool our driven was our region's for to the revenue China third review decline I'll Slide divestiture. quarter by Asia XX, The results region.

grew Excluding this, to by the XXXX. compared year-over-year X% XX% or region

expected, of shutdowns EBIT half continued experienced Whirlpool our divestiture. region recover driven region actions strong first The X.X% margins COVID-related in delivered impact the very the of As from by the from to positive year. cost-based and price China

margin-accretive Elica network region. our investments PB distribution enhances product the to cooking offering, to our in Lastly, is increased our built-in India, and be expected strengthens

on I'll Now to it Marc over new goals. discuss our back XX, to creation long-term value turn Slide

I to moment before And forward, take look a look will Thanks, Joe. I back.

our creation first These improving everything strong and of and a world. leadership very introduction our negatively are Today, of heart ago, value track Whirlpool we French are anchored world. electric impacting early new global stand consecutive performance. was inflationary track a the connected in Yet, significantly of before which fourth very record challenges. and challenging in by faced environments we're and record a across most different In is for operating COVID-XX yet many the we years world other the impacted operating industries long-term legacy home. and on a fact we We today. and foundation, a build From reflect appliances a with the our first launch on We mix built-in refrigerator vision of life in are at relentlessly our a do. reinvent XXX-year-old XXXX success company but door with of We XX first are the washer of that, in to at our the consumers results. pandemic, goals environment, ourselves that the supply-constraint XXXX, on of we different unforeseen on than year year numerous wringer

which enables any We in have operating model, an us business to resilient agile environment. and succeed

Our housing, such a consumer strong demonstrate our by replacement habits. increased outlook value on in goals and our supported long-term demand and creation that underlying strong positive confidence drivers, as success evolving

Additionally, continued value-creating position innovation cost go-to-market and base our approach, demonstrated success. for compelling pipeline us lower

different confidence value-creation in Our different the world. this new long-term Whirlpool in our goals reflect

to you creation at Slide approach targets. see focus value a will with that a XX, we our We turning profitably. clear above this or in on these existing grow We've and of have introduced delivering been to consistently exceeded XXXX all target first balanced targets. Now

I expect grow goals. we're value almost X%, pleased not progress, previous with Slide of And to done of our long-term our at review a to rate now new creation doubling turning approximately X%. XX, will to goal X% While We revenue we're yet. our

a Next, absolutely is we XX% of XX% are level to XX%. increasing range to business approximately of This is a our achieving. EBIT expectations margin our from that capable performance of

adjusted Additionally, a range cash from to continue level have a net cash percentage to we our to free a convert flow as increased sales X%. plus of high X% expect X% and at of to

of from XX% capital Lastly, we of XX% to to previous on return XX%, our invested XX%. to target deliver an increase expect

to continue our drive shareholder in success future confident these are achieving return. and will goals significant We

to discuss is Now drivers: X% turning and growth our Demand X%. housing, we purchase discretionary. segmented industry primary in XX, expect revenue Slide to why by replacement will I three of

entering are period a all catalysts with strong across three growth categories. We

we're construction. compounded begin demand is let's by decade. millennials new pent-up over needed First, well beginning remained Housing now with and see. a This below historical to only housing levels for for structurally that

at remain rates interest Lastly, low historically levels.

replacement using by consumers elevated headwind entering Second, move have in which is from appliances are let our to appliances, how our install cycle installed driven We're on me a which will the base usage and replaced. replacement. and Also, tailwind. a a clear they're natural discuss a of to with them period more. This larger of we be will base our connected products, using need rates data

hybrid our expect than and freestanding levels before COVID. appliance as important, replacement as are becoming we significantly often work to wall Even widespread, driving remain ultimately consumers do connected using more pre-COVID, cycles. more model is example, as ovens twice For higher shorter ranges usage

home, discretionary which brought a let's fundamental purchases. reorientation of has just a not Third, consumer COVID review will go away. towards

in three consumer addition, which To investments higher home. increased income across disposable the equity we more strong remains demand trends ultimately recap, segments. and in positive home, their with all healthy drives In have

turning discuss to Slide I XX, will additional catalysts. revenue Next,

a witnessed levels. to all we in all significant to pandemic, which this back we During activities not pre-COVID expect e-commerce revert do increase

we've direct-to-consumer that own the $X Over built years, approximately Whirlpool our today business past billion. represents

transformation our will of in and been growth XX%. over has investment multi-year continue deliver Our rates to strategic digital

in Lastly, where or offer consumer experience which the a dispenser ultra-concentrated consumable delivery. through fill enter we earned for entered launch significant many the new of her with applications bulk We at-home our presents detergent alter continue our business and needed can replacement the detergent when to of ecosystems, is when unit, This upon be we where win. to This segment have the detergent. new expand opportunities. is one end-to-end an convenient Swash and his we was demonstrated order app revenue the for right

like opportunities and these I on to to would profitably. address Moving XX, to grow capitalize we're positioned Slide why

cost position Great We took the have many last over fixed exited years. we costs actions As reducing in to XX% the in to fixed date. we billion XXXX we $X just by XXXX, by Recession low over the difficult base enabling removed our five asset of

our Next, focus a to value-creating relentless cost approach and we proven promotions have complexity and reduction. on

All demonstration continued not these of by done and yet. are of we're evidenced financial our success,

inflationary with example, associated costs we are operating significant in today, For absorbing an environment.

Lastly, drive we prioritize to will to growth. innovation and continue investments

XX, behind items are on turning flow will adjusted return review cash expectations. Slide invested Now to I acquisition-related and us. capital our free Large

Additionally, and a conversion. working us cash disciplined to balanced drive management capital approach position higher seasonally

acquisition our positioned Next, our strong asset deliver significant targets investments. we after we our And to at bolt-on on soon with are continue base, seek will acquisition. EPS-accretive return opportunistically to reduced

impressively past Slide in delivered very environment XX, again to turning free let Sustained few and to strong you of Now share over the very to per $X.X execution recap minutes. our operate QX a ongoing operational to results. what billion. heard challenging increase strong demonstrated our while flow gives me approximately confidence adjusted the cash market $XX.XX delivering earnings and operating demand healthy ability us

ongoing on over as return we shareholder we in $X.X billion drive record to XXXX. EPS Next, to deliver are commitment shareholders unwavering strong to our expected and value

look different record is we that firmly we XXXX, build business our As we results. beyond and again, our have on demonstrated well structurally believe to, positioned

to early which we in reflect the a at our in to look fact we time different Lastly, we discussing in goals Whirlpool an plan a our operating Day of Investor hold different value business world. long-term forward are our XXXX, view creation And greater that new depth.

remarks and for formal Now, will our end up questions. it open we

from Instructions] first question Your Longbow. MacGregor [Operator comes of David

wanted an creation confidence for continue updated, the expression growing And nice about being obviously, a I Company, being value inflation. to long-term of condition, immediate of the the so performance ability cost financial your see to to talk in that. thanks goals more

extent to You're dealing are mitigate that talk Can the to looks fairly with further to plans pressure? level continue you Inflation the a increases to will like profitability, impact substantial which into now. you your it price about just achievable offset feel XXXX.

It's Marc.

never call, inflation, a our that kind that's as and quarter with dealt that the the the we is of to inflation, billion of would strong QX billion $X also deal increase probably exceptionally and QX change have all ever since we cost the QX, probably expected, we in which in a cost we guidance. print, put -- QX inflation. the inflation few single we're a proof the it. ever which as as who saw can kind April, with we guided today, in with on I this first significant out say, mean is had high earnings with you point certainly know, XX In We companies year-over-year. saw So, we but so And cost We inflation. inflation I P&L. dealing $X one it. same sitting highest coming, it didn't years, I of X.X% the of Frankly, proof a we

year. forward, next by year. that by also going pricing it into inflation carry definition will quickly that term. into next definition, over But will expect So short will off you will don't be carryover But the have we and fall

QX, I we're Even we'll a proof year, say, on January. without of it as QX to would I this that year, next a point. of year-over-year do But margin. had even know, blip you inflation our point in as around spike with inflation extreme dealing on you yet guidance like giving So time an rather would for we're in not

So, I'm deal from will which see inflation. can to that carryover, some we confident we the pretty extent with

do to any point, I still follow-up. with a that reach on have go you kind demand elasticity Just you consumer? like you feel And room issues pricing on of have the before then

pieces, the seen do in kind you Actually, usual, Typically, pay been what little. a go-forward -- much if the David, the of split not is last overestimate elasticity. ask it's price think you very enter months we've XX category anything But elasticity again, lot it you basically we're several elasticity if a there's very price on what in I before research Yes, the to call in consumer, pay. limited as we commenting is pricing. in which the expect is the price more they there price store. see in elasticity paid. is And where we've how consumer, you what consumer over consumers promotional they the But running we fact, how to versus have cross consistently years, much store, actually they see

just the the now right let's So, of of income an top disposable it's forget the price probably purchase not of also I in infrequent point is all-time On somewhat limited. think high. awareness nature consumer at that exact that, is households an the

as But think will I as the long Will, from little that pressure pressure think bigger? that I'm will at see from constraints And bit exist, less we're I perspective. little promotional one environment. you concerned. very global supply it Yes. will the So in chain market perspective, point, broader in right current seeing a get not now, the

Good.

And question, at guess, of minimum of a regard investments, and with given what lower underperforming regard downside support to level cost I earnings? As that or risk of earnings power, confidence just productivity the what whatever earnings of to exiting you power look just a talk businesses accomplished and end that be? you've with about might the could and to like. cycle I you all reductions level gives mean follow-up might sort

significant start in out a as we globe is second our Jim. dropped benchmark and good can And the overall for around here. margins there disruption, really quarter you think significant when off drop this I saw that volumes the of X%. quarter I'll David, And Yes, a XXXX take to maybe only

XX% you business, during our North actually America at If look it that. was

I a So there. beginning that's proof one think point

a at and to in and lot more out. I costs to always XXXX, out we margins we've point think brought margins to type recessionary overall came period up America got XXXX, And of of X% improvements that our we've our is those thing kept that up second that we North taken the made pointed fixed the time. the when of really out

in the So, as a drops that some that in situation very volatile I with come extreme as think handle we what in well XXXX shocks handle type of we can saw volume you can proves of these environments.

Your Darkatsh next of question from Sam Raymond comes James.

Mark, two questions. Jim, Joe,

I'm First, what regaining market with sure beyond respect And do what in which to your be within market price? anticipate on about so? through North are share you to your specifically defending by about the it backlog. to fiscal And more talking you're At your Or long-term just going America. obviously, you goals, Is new do Is point share? working rollouts? talked recovery, 'XX? it product that defending plan is share market you methods

Okay.

maybe then COO, So kind will me and answer of Joe Sam, let it. first take it Liotine, our

on first XX% healthy target seen we we increased we're undersupplied forward is decades. mid long me the exceptionally on demand So term. significantly to been share and long demand of The And the market is, strength, of that goal revenue X%. you XX%, based out, for beyond long housing outlook housing a establishing That will market be -- term and going strength. The the X% a let driven positive in market pointed comment both aspirations. growth just is the out driven of by margin on terms the to by, term, a EBIT earlier, as market all, that has as in to our kind of you've pointed very

years. XXX position been a strongest one. is very the channel builder strong probably in in the Our It's

period crisis. into as what strong people On at couple and little turning headwind a starts they because post-financial crisis. enough, in of years of certain I comping against market. good you bit against when a look has the been, now the been growth in and housing installed that, last stronger brought COVID or feel tailwind appliance pointed It many out, low of years or the still of stress replacing usage. because get that's a Replacement were or the market. sales has increased has wrong cycling years way a top financial we about we now So Replacement, comping this this you're can't

cycles. spend. will you if you significantly higher So bullish tear, to on which and discretionary very replacement want the so, a say lastly, have drive we're further wear And

income, kind reorientation yes, all of the think do put further of towards expand is Joe But North on why streams. this America, we believe of the one, we in beyond revenue before, -- I business, demand. share To I good demand is there's disposable had which also in the we this that the and very background feel through we in high not fundamental rarely thing consumer one, just As the different all our there's existing scenario globe. point home. we is let out three direction. mentioned presentation components That around pointed can It the the right other tools. that together, But comment where about the early

a per you unit. DXC higher If a have revenue you gives it business,

If you like that ecosystem of revenue or detergent revenues kind additional business revenue. sources the other have additional is

traditional calling beyond going perspective. on natural is or share it Joe? market unit So, the a the

a the in Yes. product year. launches, to Marc. add, Maybe just been of On has new volatile a Sam. world last Thanks, the place our couple points

and of have how And product so seeded innovation and doing market. really yet the will do. that continue very lot they're We're be a we've is fully that about are to best-in-class, to really excited already launched in our dishwashers

areas load just XXXX. touched some products growth so on In will those into here and are last about There's super then products products now in in the the trajectory just we've or detergents. seeded fantastic recently laundry getting and excited in have We're those addition, new launched our the top it. and quarter really Marc around

marketplace just that we've as now that are recently us participated that Our in we getting Yummly growth essentially for in Pro historically. not and the just launched new of are areas really well

optimistic very So profile. with behind you the demand, we're fundamentals put overall that all about demand the together

I'm down implies get sales a little know price be year a versus XXX My second that despite that like question, don't might -- if sequentially. basis worse, of fourth guidance, margin quarter I getting XXX that fact Thanks. that versus That's the the the down step think meaningfully step sense but could the unusual you a raw I pretty explain entirety the it will step that your seasonal up from drivers guidance the for trying in of margin to what is help. the perspective bit points historically. of third sequentially, basis points, down doesn't be. margin quarter

Yes.

So, Sam, it's Marc.

guidance, lower like XX perspective honest full I is don't of with. It we year. probably First business. all, think your where We before read a out today, it guidance up I confidence. it raised the of point to on we XX, Whenever the timeline very too a it in a good exact the question, would The much row. mark answer also direct for you mathematics having on would end to and like of of feel good around, about sign describe on probably October, and says end will raise I

we would out And have supply, but and XX. we but procuring I'd -- about these Sam, do maybe strength are other our the have XX, QX talk capacity against call around you against tactical see historical tactical, is seasonality. might and probably smaller Yes. the one thing investments we which I in getting are strength have XX, to XX. some to the There purely So need

a we periods to being is that's fourth and seasonal not This at think had a smoothed consistently business as especially results little history positive and it's see and whether small how be cash an from now. flow I look our more you're both in promotional a generate was perspective, used throughout out year it you demonstration, as earnings cash free do year or the our with quarter. business appliance the we've starting the large bit when previous more, to

of comes Rehaut Your JPMorgan. next question Michael from

results. the on Congrats

we to just on a First bear right. prior see, of could things make sure just we question, couple if and down and wanted ones understand revisit I maybe

share the obviously, growth to appreciate X% I are component of key the organic products X% the question, On the and new always a market that. confidence in

understand results America Just XQ want bit particularly. in a and to little North unpack

single-digit benefiting I increases. If from, maybe you imply me, single-digit you're It don't price high low volume a tell even would know, probably mid, decline.

am that explain And continued I a So, that. thinking drivers about right? imply of market loss if bit might little that share, you the would of

me North So to America. Michael, let explain the try

progress regaining we not is correct. market So, did make on share in North America. That

we Let you to has pointed with nothing okay? me entirely you here dial to pricing. has in bit production, finally do little than or up and products much give as a nothing It do products, with perspective. how bit do of more That new out. It's to Joe background, QX to in produced Now XXXX. XXXX QX we also QX than in little more can give with

off because just to inventory, reducing why ship didn't we had we the were -- build the Last started Now up carefully QX, selling make we still now, And -- to Carefully, were year logistics flow inventory. work. you we more. i.e., we rebound wonder inventory. we because to we have back we inventory,

expect labor we also can to better, it's we bottlenecks. the not disappear production hear to We're from constraints, a and But as overnight. facing different. more. bit going slowly frankly, through component liked transportation read and already that slowly as continue its would press, volumes, QX that dial to up in but have shortage, you Again, getting to little So getting you it's yes, better production shortage, explains similar

will very constraint about we certain price year. hopefully market heard now, from some product from constraints our is But right into next We you Joe against confident, a regaining share the positioned. So that the levels. carry that well fundamental which feel of still range, and perspective,

can it's much increase So, we just how production. further about

Okay.

obviously, bit just This and But a remains up build Before you're extent that regain to things couple to question, to would be strategically. over hit today. my kind this as the two? starting saying months inventory they clarify, backdrop little expect and that start you the the share of the or backdrop again, just last able but know same to that a huge if, stable, quarter were you've So I -- assuming to to I the is to you're of stay of second are next in had Or if. persist, big

Yes.

I it's a supply. So have is always of that, also demand enough. to quarter. continue strong reason I fundamental pause question an give to Having a why we right production start to again, is Michael, produce and That's we a order we expect as this. now, The said demand And backlog positive. reason where can't so every could increase

increase Now, it's dramatically we're because, very just not to which produce not be a to dramatic a continuous to all the overnight continue going to constraints, simply, increase of And production. the it's But that's going can't you demand, of. increase we should we of and driven even expect be against shortage sequentially shift enough. very able by regain aware share. simply better some market to But

that. appreciate I Great.

plus done the the talk the not Second guess when terms se? certainly, about guidance, revised benchmark want you generation, sure expecting XXXX in outside does guidance that amount I is I obviously, continued quarter. and say, new per And flow would question, we're make be share of of secondly, to in in of of cash kind repurchase on free clear M&A. solid Because you've that you're -- just just a opportunistic XXXX, right. million the that share $XXX fourth on XQ repurchase. that To -- include appears the it understanding I

impact do maybe $XXX math back when very quarter a to those Michael, this you be the the on of Jim. I'll the half shares And because the the if QX, And that. year. minimal honest, for throughout start is million you with, Yes. take you're in That buying has given ratably that we've

-- say guidance of that, So at the said the we've would Marc more low that, kind that end. we given is I as earlier,

of free this cash that And about where the mover the obviously, you within year. so been it's from but we've if with when buyback have dividends through see different whether very perspective you increased amount be five think it'd or to year. priorities. flow, shareholders, share say this thing are And we as we allocation the don't that, our look year, we capital second strong -- we return a at cash significant this there. And I'd

levels to along. do look right right to launches able out see in highlighted along this product Now some in will share haven't also CapEx different an of of we in we those. we is that did things now Elica one where or we've continue of balance to especially to you continue acquisition look some picking opportunistic we come continue higher business, coming to stake our or in up period will should we cash, have M&A, forward, our environment But purpose for within remaining continue as factories, think I at that there where strategic India those would all implement we invest don't the invest to we buyback additional be to expect priorities. in continue the that. of an things of now is, our large we the been And example with especially And how

broader also maybe And comment. add Mike, let a me maybe

cash we it right significant now sheet. our As because sheet balance good optionalities. we in That have numbers, balance are having balance steady a you and on you've seen strong is very our gives a

create the we As return valuation Board, plan can comes you we our is. look right for two these a we decision. in made have, dollar, that's decision should where The back Jim reviews with biggest regular a alluded options, the discounted significant What accordance in price? buy market as share these disconnect right a for numbers, in buyback. What how not And do buyback, which with the see our tactical the about expect share we allocation, our versus Board fairly ultimate imagine, ultimately it's value amount now, significant And shares. now decision capital have a as long-range why to, look QX. you between for of allocated at we to is we to to that and of back also share we basically shareholders at attractive particularly discuss the can each

Maklari Susan Sachs. from comes Goldman question of next Your

question you've really us seeing for thinking about improved that about these In how especially my of in has still relation U.S.? this Would asset, that guess for mix about that the thinking that past, the morning? talked to shift, you've say you're I kind out you. first is put in longer-term you mix goals that improved shift. And you're the this

is This Sure. Joe.

Just of that in is launches that essentially earlier, segment which Part hit mass referred terms of continued there. shift, have the to consequence of as our product we more seen premium improvement of a the business. new mix we

constraints across different also our addition, has we've that advantageous mix. and suppliers, In most improve labor in a prioritized and had we've continue way business was the as to helped

done successfully And of we we our the with We've in and to do future. few here. feel last tools the so, we expect that employ. go-to-market able the product the be launch combination this about in to And years to good our continue

of And the and built so been foundation baseline we've of. a generally speaking, for something that's kind us good

obviously when from to you about line at at about margin it actually about of think these you're top XXXX? you've been Marc, follow-up, as a and think about perspective, what quarters. a levels a you time? of moving goals and some the much sort all in Obviously, you that we higher level when as about different think these mean over How we do you arrive it to then Can and think you thinking pieces factors. they some outlined cash operating today we relative those talk these And for us Okay. expect operate business generation, where all how

me if some extent Susan, to you that see see because Yes. question. I expected me, you would smiling would

the some if you you XXXX. a you bit, And of goals may them as them ambitious last ever very creation also, established back value you time and recall, step called the achieve in little delivered. them? we We Now can

line refraining you up So mind, we keep when a more them. And the we the because margin, new saying I'm the these not think we time five but we're four are be where going them can our goals. pointed our quarters, exact course, ones lot importantly, we're of indication. from as years, an them? to I giving That best should question But last year about out, hit you came delivered be in after certain delivered years. but four have kind after will plans have these internal of a of

away is, X% We and from And because on change, confidence on pointed X%. you X% think would we to but time as can do that lines, And see goals is out, change deliver numbers trends. have growth our X% is really, that strong to real all both X% short, from that from big levels. that biggest the term. creation The demand we should I I these see we and -- strength again, to revenue to see moving margin goal mid earlier, the demand think, where long coming I longer-term this stay in is trying value

Your Zener next question Ken KeyBanc. of from comes

I'm in they actually might, how consumers, to you you retailers big get And perhaps, have the Friday have comment Maybe promotions. can Joe, the chains American on these mind, my landscape, to don't of Black take impact obviously, i.e., how Peter X. have these supply your address the maybe events. wondering about issues the acknowledgment how on sales question. cadence North product guidance chain the July first supply changing that be you congratulations. talked of kind specifically That's And if changing if affected don't

Thanks, Ken. Yes.

them with zoom throughout supply a a had events deal from go and good always I the I although successfully. very would have shown different to XX if many months, a to but not back last deal over constraint mean we say we've So we them, ability little we've mean I with just experienced bit XX last standpoint, months, what the perfectly, out

labor, supplier to factors, a look that be could is going it I certainly, all components, still might across so as bit think, be world, whatever disruptions, be. forward we different And challenged

a in we the so, around of Jim of will the point had more -- And and a less year looking we've even consequence what throughout is our is in terms what cash business seasonality think To and or been that even bit we little earlier flow, experienced term in little as there made I inherent these short a the here segments. forward. constraints, either holidays expect promotions or

month of a So else comment How as every for something promotions is impacts decide. retailers? consequence opposed it I we've has think that of generally But with that. speaking, that even to that a I us say, them on would being historically. really I can't That's we've experienced Marc kind experienced as in really for to been what a our consequence relieve everything we're But chain us, And it well, how of increase production our touched year-over-year are managing and it doesn't seeing how on and certainly, an supply from quarter-over-quarter managing we equation. and as positive. that's the completely production. we're

look very know and this thing the Again, about think I the a past. we perspective, I before, consumer only want appliances going the this is will forward than I spoke to to from add at one, differently consumer

freestanding of terms and washers, connected I increased First I earlier just the XXX,XXX often at units. we actual XX% not have ovens, rate. data, on pre-COVID. higher several want repeat to real And remarks, Xx of from not our we the reported, usage data. said significant usage in look see On research, ranges see know know install usage we we We where it. of usage appliance, all, And of what how they in base a

will the at more doesn't -- spend go quickly people work, because away time and So that hybrid home.

So often more of more product see the the use consumers will first it often. and all,

invest investing care kind about consumers have home of what all, they more in for for there. home, of all Second in the these of because nesting and products they what trends and

argue you would probably investing also I home. higher willingness see cycles and terms, high to strongly spend general the replacement in that, because people will in So, are

Understood.

some with my appliances. I think that I had issue of

sell past much relates have walking discretionary do you so out large that? where to they appliances is also update any is that how suites, someone you you kitchen. Can in you of features. go into is us an appliance But us actually and construction, because not just versus if Could it disclosing looks but because comfortable remodel that together, kitchen give replacing feel projects, new on your someone's is remodel that's you you which a new on the how we discretionary one-off that consider a As those right, of purchases? doing replacement to interesting, the broken to who on kind the commentary discretionary talked want about all

and in Yes. of in spaces, really your these Ken, those that alluded trends family's home, more, needs. that discretionary Marc has meet in their remodel, consumers about a resulted being customize to nesting, caring want spaces, more that exactly to at the of appliances using to, lot essentially, favorable experience. what wanting And terms results caring more get those in them invest they really

trend generally have ensuring even and And in a favorable see all so, and that their right terms likely in of we space as features suites they the that functionality. this and remodels

general don't what really position their we trend perfect have that more get data sentiment but one So want family. exactly to say need makes the is that they here, and for invest money would consumers time and and I for the us improves to

people are that to going think only I still so the and here, position. that's here so experience continue to And Marc's going bolster to in hybrid that point, To midterm. environment going in we're to a remain

which is, strong I add consumers homes, the probably which at with new very buying years, you an as undersupplied home have dynamic is, new it's still XX undersupplied, price for thing the simpler interesting the to increases. would completely you market, houses as here result only you the been -- I are high had a of Ken, looking want demand, highlight despite mean, are and that,

into, some So, these I home, the about or of kitchen more prices home of frustrated consumers, sheet just availability, investments instead. of remodel let's absolutely see being and the may think a balance would capable who you the lack more it household who from, are shift call buying

So, periods. more you more that of if And in prior surprised I would that see going be not happening and we've seen forward.

I we particularly of home attractive an will what the have we -- what segment there. and I think kitchen So forward. think, remodel, offerings attractive going think with traditional centers, I the discretionary some our be very the suites, the retail improvement call we have segment in is whole And

RBC next question Mike Your comes from Capital of Markets. Dahl

that backlog? more color a build mentioned and door inventory wondering, kind guess you've in strategically us on you to backlogs. prioritize versus wanted Could built you on inventory. to of follow comment made servicing Mike response I'm extended the you give question, you I I little the little Rehaut's kind shipping Marc, decision out the up got to and of the such a up

high maybe I level. can on Michael, Yes, a

distribution which distribution many serve to distribution the direct-to-consumer when centers. you and centers the you home question field -- have of have need you and builder business, regional to -- refers U.S. from U.S. center, large particular The First also of obviously, look the we but in in the all, improvement you factory have market, your I also a but think particular down smaller market. channel,

distribution basically consumer So a reduced year, expensive which smaller came we translate inventory centers, particular for it last as into basically ultimately service.

in we to to some times. So wait inventory, had order of better and downstream rebalance of it, some service consumer these reduce call them

Now that just it what just coast couple transportation from an It's is is. hour one getting with these slower days.

normal which circumstances. in inventory than possible. as we reduce think, So the that's, you you basically trying backlog of of in tie to what course, a do transportation little as have assured, bit have But more you quickly I up we're would rest in orders QX. would And seen

Yes.

I is Jim. think, Michael, this

things. thing the costs component inventory to there's you in out there, number, up at Raw another when point big in look other have too, that's a cost. The material gone

of driver So portion only in the is costs. is Marc our repositioned, of increase The is about that this. inventories part we've that the increased that a talking input biggest

suggest in guess a that question. second XQ. volume price seems I continue would is quarter flattish I likely a is your And Okay. just total dynamic positive in for then revs, kind like that, of and fourth quick which still It environment to clarification, had implied a guide,

This that? around So acknowledged. environment. clarify second inflationary for such question the your confidence every dynamic could environment as is more then in been But the a company, has you you just

confidence terms kind this of in you So are visibility the peak seeing that's giving just you being as the the or out? of look what you

Mike, say, is on at QX and we I full the end guidance year now, we we'll low alluded to here look do I'd right start be. where all say, Marc believe that, we that, question when that's and the first our And Yes. as if of with earlier, the that for believe

we assumptions produce around the to our and to and of increase. out continues QX into get that door that take you So product have the ability

done a do forward, we've see cost as environment And this obviously and very cost-based we today, offsetting alluded that to to can expect see so continue just be. come. revenues us But look do then with with into say, And continue some as and and are sales we we the increases And dynamic I to our price our to throughput job much okay, where look think good pretty from we've when now will to back going guidance understanding given that of to throughout the factories was we at I around where what on the carryover earlier, right said, we've you we the year. Marc within expect still the increase. of market benefits

were and I we to that that then. these time to think were with even our had within back which cost the ability back if offset increases frame, of of thing by look we historically the dynamics, handle pricing XXXX, I'd driven within 'XX also some able other business to them tariffs, you our many to and point cost-based like more

expect So trends offset believe we that again, to and now, actions the we the we continue to to see we're taking right right do that.

But the is gave We inflation to want be again, in which our outlook, pretty we saw the Yes, make April I true, markets we want markets, so probably said that's coming. the out short-term I turned "Oh, But and inflation. on earlier, also many were in the Mike, think reading comment markets. of additional accurate that to as, inflation pessimistic." this I commodity very I it basically what broader people repeat to dynamic. perceived

but QX, prime And it which year-over-year leave and the pretty dent also -- our bottom probably as a remarkable. this X.X such, is increase didn't say, in So pretty line. that's reason I inflation why points, of brutal would that's, a had

And outlook earlier. in the read you we've demonstrated than helps just little it So others deal QX. it bit with inflation able to earlier a being think then I

also course, pricing, of QX use carryover comes As again I would there and year, point. before, there from next But carryover. as it proof to mentioned a will be as be a will I

operate pretty We are do so. challenging to in to able a continue and will environment, dynamic we

Eric next comes from from Bosshard Research. Your Cleveland question

longer-term of the Two things guide. in terms

is underlying in give the And in if of or of America the years, progress I First clarity, that the markets? of all from margin the all, coming guide, you assume bit could a enhanced improvement that guess margin that across assume margin in sustained question just North here? is. Does terms for guiding does

haven't goals outside in our say, laid in would margin terms really just EBIT overall America continue in of targets and EMEA. that type a business, our now. of it our what North believe I if there. what profitability changed When we see is our you at America, we And margin assumes North here's improvement, assume out, to goals at within we margin does what that our look Eric, the right Yes. range of at look is business we it terms especially that long-term indicates of above XX% stay businesses that, will

our was And about so, previous very we that. Remember, XX% for we where are. plus guidance good feel

outside But continue So step our big margin. made discount U.S., do a to America. you profitability businesses the shouldn't that will driver expand North we've international, that believe within is in we here change the a the

last, I there And few achieved over but the five X%. were the years X%. increased the Okay. That's you guide, guess, it secondly, didn't then felt was that goal grow in like helpful. a you And where goal total, years revenue

last share to at and years, trying explain what goal. on focus that into of a it you you that default short look this is in I of when an I'm given few felt understand guess, market years margin, you margin number fell like to X%, X% to may As the that or opportunity

move representing commitment a different market that in focused the growth? is does you growth revenue As accelerated to faster performance Or forward, mostly imply share? confidence market

one. just me take this let So

economic strong demand, to were as before. think view were for bit, ago it Because it as said margin lever compared on answer confidence operating your X% years margin, stepping we very First question, EBIT second market already higher of and just know couple Having it's when the the little you that demonstrates at a you pure of how outlook. create of at the financials, you I market growth. primarily back to revenue all, the the Company, just if or have of a part look expansion you we X% value it in the

on are levels. operating We different

if you look more by America XX%, drive If definition, the basic at XX% North the creation, take just operating you growth. or create if you value, business, value, at value you can even economic

it term. we and will wouldn't margin course, business, Europe. in we yet you call of forward where theme turnaround. where lever progression I depending a demand done depends again, in shift. economic it So, near Europe, is a on confident a slightly just to where -- because on overriding the But we're different with and margin on creation. expansion your with value where particular very again, kind revenue have market That highest all are that's or the and depends it margin you have And highly of expansion It on strong for drive going continue respected very in are, focus regions long In dependent, of where not we're are the a expansion. the we kind hard in our is, we picture,

with Q&A the of coming I session. end we're think this to that, So

challenging. was five reiterate we everybody after First environment, because was smooth but today exceptionally again, more quarters, strong of creation QX not long-term I lot number of a no us that and all easy we that's the we confidence this we appreciate but going dialing way, these is not to would perform where just four last in quarter kind it's performance. have be it absorb you And all-time weekend. agile But we'll these about what earnings This year agile almost all, exceptionally wish certain year. and I call. we calling the just with you it's see have sailing, all call value every not planning nice five be a give particularly all want in, can material the In was I I the year-after-year you long-term questions I thank nice and well, to And think goals, environment, It well now will well. should agree, rough said year quarters, than expecting appreciate can you a on business going think record a to of can delivered. a with say, forward. trading I or Friday is nice We're And I There next point, also what in proof all lot creation in, an it an above goals. also the With this mind, you for was we of and and from to perform have organization, deal model in. value comes that circumstances. a and continue calling

call. today's that Ladies concludes and conference gentlemen,

disconnect. now may You