Joshua Wilson

Joshua Wilson of Raymond James asked two housekeeping questions: to confirm the full-year corporate expense guidance used in the EBITDA calculation and to explain the year-over-year increase in inventory days.

Answer

EVP & CFO Brian Harris confirmed the corporate guidance remains at $55 million. He explained that inventory levels are higher than desired because a slowdown in consumer demand has caused customers to reduce their orders.

Joshua Wilson of Raymond James Financial asked about the company's updated assumptions for North American market share cadence in the second half and questioned what changed in the environment to catalyze the dividend reduction decision now versus earlier in the year.

Answer

Marc Bitzer, Chairman & CEO, reiterated expectations for healthy market share levels in the second half, driven by new product introductions and the eventual need for competitors to raise prices to cover tariff costs. James Peters, EVP and CFO, explained that the dividend decision was made now after gaining more clarity on the tariff rollout and its impact on the business, deeming it a prudent time to create additional balance sheet capacity for investment and deleveraging.

Joshua Wilson, on behalf of Sam Darkatsh, asked for clarification on the drivers of the implied 6% like-for-like sales growth in Q4 and requested more detail on why cost savings are expected to ramp up sequentially.

Answer

CFO Jim Peters attributed the Q4 revenue inflection to strong industry demand outside the U.S. and a seasonally stronger quarter for the Small Domestic Appliance business. Regarding costs, he explained the Q4 ramp is driven by two main factors: realizing the full run-rate benefit of the organizational simplification actions taken earlier in the year, and improved factory leverage from more normalized production levels following the significant inventory reduction in Q3.

Joshua Wilson of Raymond James sought clarification on the fiscal 2025 guidance, asking if the assumption of 'stable conditions' for the landscape contractor market implies flat year-over-year sales for that subsegment.

Answer

CFO Angela Drake and CEO Richard Olson clarified that 'stable' does not necessarily mean flat sales. They are still actively working to reduce field inventories for lawn care products but expect the overall situation to be better year-over-year, positioning them well for when the market normalizes.