Our Financial Position

We faced another challenging year as an industry, navigating a multitude of macroeconomic pressures. Our team demonstrated resilience and agility in 2025, delivering ~$200 million in cost take out to partially mitigate the unfavorable impacts of tariffs. We strengthened our balance sheet by paying down $300 million of debt and proactively refinancing $1.2 billion in debt at attractive interest rates.

Financial Summary

We delivered $6.23 ongoing EPS(a) - despite unprecedented macroeconomic shocks - through operational actions, supported by favorable tax planning strategies. In the U.S., the environment has been challenged by delayed industry pricing response to the increased cost of tariffs. Strong execution of cost reduction actions partially offset these challenges, resulting in ongoing EBIT margin(a) of 4.7%. While navigating a complex macro cycle, we defended our position in the industry and maintained a healthy operational profile. Our new products delivered share gains throughout the second half but required more inventory to be built. This ultimately led to lower levels of free cash flow than anticipated.

Clear Capital Allocation Priorities

Our capital allocation priorities are unchanged. We are focused on:

  • Debt paydown: Our long-term commitment to a 2x net debt leverage target remains firm. We continue to focus on progressing this target and proactively managing our balance sheet position to ensure ample liquidity.

  • Fund organic growth: In 2025, we launched 100+ new products globally and transitioned over 30% of our major domestic appliances in North America, executing the largest portfolio refresh in over a decade. We continue to deliver distinct innovation, like the new KitchenAid suite, elevating what consumers expect from their kitchen and improving life at home.

  • Fund dividend: We funded our dividend at an adjusted annual rate of $3.60 which creates balance sheet flexibility. We will continue to evaluate our dividend funding on a quarterly basis.

Looking Ahead to 2026

Through our unique domestic footprint, cost-take-out discipline and strong portfolio of innovative products, we are uniquely positioned to win as the U.S. housing market enters a long-awaited recovery. We will execute on margin expansion initiatives within our control and are committed to advancing cost-take-out initiatives. We will take immediate actions to improve our working capital, delivering $400-500M of free cash flow(a) in 2026 and $400M of debt paydown, further strengthening our balance sheet.

Roxanne Warner
Executive Vice President and Chief Financial Officer

  • (a) The ongoing measures, including ongoing earnings before interest and taxes, as well as free cash flow, are non-GAAP measures. Please see Financial Reconciliations for a reconciliation of these non-GAAP measures to their equivalent GAAP measures.