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Investing.com -- S&P Global Ratings has revised its outlook on Whirlpool Corp (NYSE:WHR). to negative from stable while affirming the company’s ratings, citing expectations of continued weak profitability and elevated leverage through 2025.
The ratings agency now forecasts Whirlpool’s adjusted leverage will remain at approximately 5x at the end of fiscal 2025, higher than its previous 4.5x projection, before improving to 4.4x by the end of 2026.
S&P maintained its ’BB+’ long-term issuer credit rating and ’B’ short-term issuer credit and commercial paper rating on the appliance manufacturer.
The negative outlook reflects ongoing challenges in Whirlpool’s North American major domestic appliance market, including higher-than-expected inventory levels, uncertainty around tariffs, weak consumer sentiment, and limited pricing power.
According to S&P, Whirlpool’s Asian competitors pulled forward imports ahead of potential tariffs, creating an estimated 60-90 days of excess supply in the channel as of May 2025. This inventory overhang could persist further into 2025 and possibly into 2026.
The company’s ability to raise prices will likely remain constrained in what S&P describes as a "highly promotional environment," at least until the inventory surplus clears. Production cutbacks are also reducing operating leverage, further hindering margin recovery.
S&P noted that the sale of Whirlpool India could be delayed until early 2026, potentially postponing the company’s target to repay $700 million of gross debt in fiscal 2025. This would require Whirlpool to rely on its $3.5 billion revolving credit facility to repay the $300 million outstanding on its term loan in 2025.
Management’s recent recommendation for a 50% dividend cut, which S&P expects will be approved by the board, is considered a "modest credit positive" as it will preserve approximately $200 million in cash annually to help address upcoming debt maturities.
S&P indicated it could lower Whirlpool’s ratings if operating performance falls short of expectations, sustaining adjusted leverage above 4.5x. Conversely, the outlook could return to stable if improving performance and prudent financial policies keep leverage below 4.5x.
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