Moody’s cuts Whirlpool to B1 as sales fall 8.8% and leverage worsens
Key Facts
Moody’s cut Whirlpool’s corporate family rating to B1 from Ba3 on Wednesday, October 28, 2026, and kept its outlook negative, Investing.com reported. The decision came amid declines in sales and profitability, as the agency expects adjusted leverage to exceed 10 times by the end of fiscal 2026. Moody’s said operating performance had deteriorated because of “slower discretionary consumer spending and a sluggish housing market.” The downgrade puts the company under mounting credit pressure as demand remains weak and margins decline. Whirlpool shares closed at $27.42 on October 27, according to EL7 data.
Third-quarter results show a widening decline compared with the same period a year earlier: net sales were $3.677 billion, down 8.8% from $4.033 billion in the third quarter of 2025. The company said sales, excluding the impact of currency, fell 8.2% year over year because of weak sector demand. The contraction in activity was reflected in ongoing operating profit, which fell to $97 million from $180 million a year earlier, a 46.1% decline. Ongoing EBIT margin narrowed to 2.6% from 4.5% in the comparable period. The figures do not establish that profit came in below market expectations, but they show a sharp decline in earnings and margin over the year.
Weak performance coincided with what Moody’s described as slower discretionary consumer spending and a sluggish housing market, both of which weigh on demand for home appliances. The company’s results also cited weak industrial demand as a driver of lower sales, while the agency linked the deterioration in operating performance to spending and housing conditions. The decline comes as the company faces a double hit: lower sales and weaker profitability per dollar of revenue. That makes improving cash flow and reducing debt more important as the end of the fiscal year approaches. The evidence did not provide a separate estimate of each factor’s contribution to the decline in sales or profit.
Whirlpool lowered its fiscal 2026 guidance to net sales of about $14.5 billion and ongoing EBIT margin of 2.0% to 2.2%. The company, meanwhile, is targeting free cash flow of about $300 million and net debt below $4.5 billion by year-end. These targets show the financial path management is seeking to achieve amid operating and credit pressures. But Moody’s forecast for adjusted leverage, or debt to EBITDA, points to more than 10 times at the close of fiscal 2026. The negative outlook remains in place alongside this divergence between the company’s cash targets and the agency’s debt forecast.
The company announced a 7% price increase in its North American major domestic appliance business, effective in the fourth quarter of 2026. The increase is among the measures management cited in addressing sector pressures, along with cost-cutting and pricing efforts. Chief Executive Mark Bitzer said “the pace of recovery is slower than expected,” but added that these measures “set a clear path for further improvement in 2027.” Management thus set its expectation for improvement next year while acknowledging that the recovery is proceeding more slowly than previously estimated. 2027 remains the year for improvement identified by the company, while current financial guidance focuses on fiscal 2026 results.