Whirlpool (WHR)

Home appliances manufacturer Whirlpool (NYSE:WHR) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 1% year on year to $4.03 billion. The company’s full-year revenue guidance of $15.8 billion at the midpoint came in 1.9% above analysts’ estimates. Its GAAP profit of $1.29 per share was 5.1% above analysts’ consensus estimates.

Company Overview

Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

Competitors in the household appliance industry include Electrolux AB (STO:ELUX-B), LG (KRX: 066570), and Haier (SHA: 600690).

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Whirlpool’s demand was weak and its revenue declined by 4% per year. This wasn’t a great result and is a sign of poor business quality.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Whirlpool’s recent performance shows its demand remained suppressed as its revenue has declined by 10.2% annually over the last two years. Whirlpool isn’t alone in its struggles as the Electrical Systems industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

This quarter, Whirlpool reported modest year-on-year revenue growth of 1% but beat Wall Street’s estimates by 2.5%.

Looking ahead, sell-side analysts expect revenue to decline by 1.2% over the next 12 months. Although this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

For industrials businesses, cost of sales is usually comprised of the direct labor, raw materials, and supplies needed to offer a product or service. These costs can be impacted by inflation and supply chain dynamics in the short term and a company’s purchasing power and scale over the long term.

Whirlpool has bad unit economics for an industrials business, signaling it operates in a competitive market. As you can see below, it averaged a 17.3% gross margin over the last five years. Said differently, Whirlpool had to pay a chunky $82.72 to its suppliers for every $100 in revenue.

Whirlpool’s gross profit margin came in at 14.7% this quarter, marking a 1.4 percentage point decrease from 16.1% in the same quarter last year. Zooming out, the company’s full-year margin has remained steady over the past 12 months, suggesting its input costs (such as raw materials and manufacturing expenses) have been stable and it isn’t under pressure to lower prices.

Whirlpool was profitable over the last five years but held back by its large cost base. Its average operating margin of 4% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, Whirlpool’s operating margin decreased by 8.8 percentage points over the last five years. Whirlpool’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q3, Whirlpool generated an operating margin profit margin of 5.1%, down 1.5 percentage points year on year. Since Whirlpool’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Whirlpool, its EPS declined by 17.6% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

Diving into the nuances of Whirlpool’s earnings can give us a better understanding of its performance. As we mentioned earlier, Whirlpool’s operating margin declined by 8.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Whirlpool, its two-year annual EPS growth of 66.2% was higher than its five-year trend. Its improving earnings is an encouraging data point, but a caveat is that its EPS is still in the red.

In Q3, Whirlpool reported EPS of $1.29, down from $1.97 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 5.1%. Over the next 12 months, Wall Street is optimistic. Analysts forecast Whirlpool’s full-year EPS of negative $3.37 will flip to positive $6.45.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Whirlpool has shown weak cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 3.4%, subpar for an industrials business.

Taking a step back, we can see that Whirlpool’s margin dropped by 8.4 percentage points during that time. This along with its unexciting margin put the company in a tough spot, and shareholders are likely hoping it can reverse course. If the trend continues, it could signal it’s in the middle of a big investment cycle.

Whirlpool burned through $52 million of cash in Q3, equivalent to a negative 1.3% margin. The company’s cash flow turned negative after being positive in the same quarter last year, suggesting its historical struggles have dragged on.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Whirlpool historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 8.5%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Whirlpool’s ROIC has unfortunately decreased significantly. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

Debt is a tool that can boost company returns but presents risks if used irresponsibly. As long-term investors, we aim to avoid companies taking excessive advantage of this instrument because it could lead to insolvency.

Whirlpool’s $8.28 billion of debt exceeds the $934 million of cash on its balance sheet. Furthermore, its 6× net-debt-to-EBITDA ratio (based on its EBITDA of $1.20 billion over the last 12 months) shows the company is overleveraged.

At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company’s rating if profitability falls. Whirlpool could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies.

We hope Whirlpool can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt.

We were impressed by Whirlpool’s optimistic full-year EPS guidance, which blew past analysts’ expectations. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $73.69 immediately following the results.

Updated: December 4, 2025 at 10:32 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Whirlpool.

We cheer for all companies making their customers lives easier, but in the case of Whirlpool, we’ll be cheering from the sidelines. First off, its revenue has declined over the last five years. On top of that, Whirlpool’s diminishing returns show management's prior bets haven't worked out, and its projected EPS for the next year is lacking.

Whirlpool’s P/E ratio based on the next 12 months is 12.8x. This valuation multiple is fair, but we don’t have much confidence in the company. There are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $86.78 on the company (compared to the current share price of $80.15).