Oct 27, 2026 earnings call — Margin recovery and pricing actions
Company updated full-year ongoing EBIT margin to between 2% and 2.2% and revenue decline of approximately 1.5%.
Revenue $3.7B (est $3.9B) · EPS $-0.21 (est $0.73)
Key quotes
"Third, we have implemented further pricing actions of 7% to 10% in North America and in Latin America."
"We expect to deliver free cash flow of approximately $300 million or approximately 2% of net sales driven by rigorous working capital discipline."
"In total, these manufacturing and supply chain actions represent $290 million in structural cost benefits."
Analyst Q&A 9
2027 costs, tariffs, and pricing
Q (Sam Darkatsh · Raymond James): Analyst asked how RMI, tariffs, and cost takeouts look for 2027 and asked about the 7% North American price increase and whether it is PMAP or list and how much will carry into 2027.
A: Management said internal cost actions and structural changes are on track and will carry into 2027. They said tariffs are assumed stable but raw materials—especially oil and steel—are the main uncertainty. They said the roughly 7% price action in December is a mix of MAP, PMAP and other tools and will carry into next year.
"That significant move, which, again, is in the ballpark of 7%, is actually a combination of MAP, PMAP, in some cases, also first." — Marc Robert Bitzer (CEO·CHAIR)
Q4 free cash flow and working capital
Q (David MacGregor · Longbow): Analyst asked what specific actions will improve working capital to hit the $300 million free cash flow target and how much of the Casa Bahia recovery to model in Q4.
A: Management said Q4 is typically when cash flow flips positive and they expect to collect a large portion of Casas Bahia receivables in Q4. They said they executed inventory actions earlier and now focus on cash collections and supplier terms to drive working capital improvement.
"Our expectation is to then collect approximately $100 million of that in Q4." — Roxanne Warner (CFO)
Pricing approach and steel contracts
Q (Mike Dahl · RBC): Analyst asked whether aggressive pricing is now favoring margin preservation over share and asked for more detail on steel dynamics and impact into 2027.
A: Management said they will lead on pricing when needed to expand margin and that market share has been broadly stable year to date. They said they moved to multiyear steel contracts to reduce surprises, have locked in two contracts at fair terms, and expect to close the third soon which gives predictability into next year.
"A couple of years ago, we changed our steel contracts from annual steel contracts to multiyear steel contracts." — Marc Robert Bitzer (CEO·CHAIR)
Channel inventories and liquidity
Q (Susan Maklari · Goldman Sachs): Analyst asked where trade and company inventories stand, implications for Q4 and 2027, and whether liquidity and the balance sheet give enough runway.
A: Management said trade and company inventories are low, among the lowest in years, so they do not plan further production cuts and will rebalance into 2027. They said they have sufficient liquidity and financial flexibility, with over $3 billion available and net debt guided below $4.5 billion.
"So a very, very short answer your question would be yes, we absolutely have the liquidity and the financial flexibility that is needed to operate in this challenging environment." — Roxanne Warner (CFO)
Working capital permanence and Brazil recovery
Q (Rafe Jadrosich · BofA): Analyst asked how much of the working capital improvement is structural versus one-time and asked for the FX assumption and timeline/process for the GCB/Casas Bahia recovery.
A: Management said inventory is near its practical low and further structural gains will take time; payables have been extended and receivable terms can be addressed with retailers. They said the judge’s recent bankruptcy decisions start a 60-day clock for restructuring, and the GCB process will take time with more visibility exiting Q4.
"The decisions from the judge on the bankruptcy proceedings happened just last week, which starts the 60-day clock on the restructuring plan." — Ludovic Beaufils (PRESIDENT)
Latin America pricing and SDA order shift
Q (Jeffrey Stephenson · Loop): Analyst asked whether the new 10% regional price is incremental to prior Brazil increases and about changes in promotional intensity, and asked why SDA Global orders jumped 40% in October.
A: Management said the August ~5% was Brazil-specific and volumes held; the up to 10% price applies across the whole segment with limited Q4 impact and promotional activity is being moderated around Black Friday. They explained SDA bulk seasonal orders shifted from Q3 into Q4, producing the 40% higher orders in October and giving confidence for strong Q4 shipments.
"The up to 10% price is across the entire segment." — Ludovic Beaufils (PRESIDENT)
Builder channel pricing and remaining steel contract
Q (Sam Reid · Wells Fargo): Analyst asked about pricing realization in the builder channel and whether benefits were seen in Q3 and will ramp in Q4/2027; also asked timing and size of the last steel contract.
A: Management said builder pricing is more complex because builders use quotes and longer contracts, so pricing progress is delayed versus retail but has improved in Q3 and will show more in Q4. They said two steel contracts are locked, the third is in advanced stages, and they can shift volumes between partners so they expect to close it soon.
"The pricing in the build is not as straightforward as with retailers, very simply because builders give out quotes, and we give quotes to builders quite a bit in advance." — Marc Robert Bitzer (CEO·CHAIR)
Price mix vs realized price
Q (Eric Bosshard · Cleveland): Analyst asked why retail price moves look strong but realized global price mix is weaker, and whether large cumulative North American price increases will stick or hurt demand/mix.
A: Management said the price chart is retail web scraping and does not capture builder pricing, which is less tracked; they noted Casas Bahia and replacement demand mix also lower the global price-mix metric. They said North American price increases largely relate to January 2025 and by and large are sticking with limited category demand impact so far.
"When we talk about these very big increase number, that always relates to January 2025." — Marc Robert Bitzer (CEO·CHAIR)
Market share, POS, and margin plans for 2027
Q (Andrew Carter · Stifel): Analyst asked how steady market share squares with larger shipment declines and requested POS visibility, and asked whether cost savings plus pricing can hold or expand margins in flat volumes in 2027.
A: Management said market share has been very steady across the three quarters and they monitor POS weekly while also gaining in independents not fully in POS data. They said margin expansion is the top priority, structural cost takeouts plus carryover pricing set a solid foundation, and they will provide more detail in January when they give 2027 guidance.
"Our market share this year is very steady throughout all 3 quarters." — Marc Robert Bitzer (CEO·CHAIR)