Financial Data and Key Metrics Changes - The company experienced a 3% decline in net sales, excluding currency effects, due to negative consumer sentiment impacting global industry demand [10] - Ongoing earnings per share were reported at $1.34, negatively impacted by approximately $0.35 from a noncash loss associated with a minority interest in Becker Europe BV [11] - Free cash flow was unfavorable compared to the prior year by approximately $140 million, driven by seasonal inventory build [11] Business Line Data and Key Metrics Changes - MDA North America saw a 5% decline in net sales year over year, with EBIT margin approximately 6% [15][16] - MDA Latin America experienced a 1% decline in net sales year over year, with EBIT margin at 6% [17] - MDA Asia reported a 4% decline in net sales year over year, but achieved over 7% EBIT margin with 90 basis points of margin expansion [19] - SDA global business delivered 8% net sales growth year over year, driven by direct-to-consumer sales growth [20] Market Data and Key Metrics Changes - Asian appliance imports were estimated to approach the highest level on record during the first half of the year, contributing to promotional intensity [6] - The overall industry is expected to be flat to down 3% globally, with MDA North America and Latin America also expected to be flat to down 3% and 5% respectively [45][46] Company Strategy and Development Direction - The company is focused on new product introductions, with over 30% of North American products transitioning to new products in 2025, marking the largest product portfolio refresh in over a decade [21] - The company aims to leverage its strong U.S.-based manufacturing footprint to benefit from new tariff and trade policies [22][24] - The company is committed to investing in innovative products and reducing debt levels while maintaining a healthy dividend [49][50] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty, elevated interest rates, and evolving trade policies have negatively impacted consumer sentiment [5] - The company expects meaningful improvement in the North American business as the full impact of tariffs kicks in later this year [7] - Management remains confident in the long-term fundamentals of the housing market and believes the company is well-positioned to benefit from eventual recovery [25][34] Other Important Information - The company updated its full-year guidance, expecting approximately flat net sales of $15.8 billion in 2025, reflecting strong new product pipeline offset by worsening global consumer sentiment [41] - The company plans to adjust the annual dividend rate to $3.60 per share starting in the third quarter to create capacity for future investments and debt repayment [51][96] Q&A Session Summary Question: Estimate of pull forward tariff-free imported product currently on the ground - Management indicated that it is difficult to provide an exact estimate but noted a significant imbalance between declared sell-in and actual sell-out, with a potential 60 to 90 days of inventory from excess Asian imports [59][61] Question: Promotional calendar and second half outlook - Management stated that they significantly reduced promotional efforts in Q2 and do not expect a completely different behavior in the second half, anticipating a more muted promotional environment [62][64] Question: North America major margins and guidance - Management confirmed that the adjustment in guidance reflects continued delays for tariffs, with no change in the fundamental investment story [76][78] Question: Performance of SDA business and back half outlook - Management expressed satisfaction with SDA performance, driven by new product momentum and direct-to-consumer growth, while noting that the segment is back half loaded [88][90] Question: Update on India sale - Management expects proceeds from the India sale to be in the $550 million to $600 million range, with closure anticipated by the end of the year [110][112] Question: Confidence in pricing actions to offset tariffs - Management confirmed that necessary pricing actions have been implemented to offset tariffs, although the impact was masked by a loss in product mix [114]

Financial Data and Key Metrics Changes - The company experienced a 3% decline in net sales, excluding currency effects, due to negative consumer sentiment impacting global industry demand [8][9] - Ongoing earnings per share were reported at $1.34, negatively impacted by approximately $0.35 from a noncash loss associated with a minority interest in Becker Europe BV [9][11] - Free cash flow was unfavorable compared to the prior year by approximately $140 million, driven by seasonal inventory build [9] Business Line Data and Key Metrics Changes - MDA North America saw a 5% decline in net sales year over year, with EBIT margins around 6% [13][14] - MDA Latin America experienced a 1% decline in net sales year over year, with EBIT margins at 6% [15] - MDA Asia reported a 4% decline in net sales year over year, but achieved over 7% EBIT margin with 90 basis points of year-over-year margin expansion [16] - SDA global business delivered 8% net sales growth year over year, driven by direct-to-consumer sales growth [17] Market Data and Key Metrics Changes - The company noted a significant increase in Asian appliance imports, with estimates suggesting they would approach the highest level on record during the first half of the year [5][6] - The overall market is expected to be flat to down 3%, with MDA North America and Latin America facing similar challenges [47][49] Company Strategy and Development Direction - The company is focused on new product introductions, with over 30% of North American products transitioning to new products in 2025, marking the largest product portfolio refresh in over a decade [19][20] - The company aims to leverage its strong U.S.-based manufacturing footprint to benefit from new tariff and trade policies [20][21] - The company is committed to investing in innovative products and reducing debt levels while maintaining a healthy dividend [52][53] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment marked by elevated interest rates and evolving trade policies, which have negatively impacted consumer sentiment [4][6] - The company expects the full impact of tariffs to kick in later this year, with confidence in a meaningful improvement in the MDA North American business heading into next year [6][7] - Management remains optimistic about long-term growth potential, particularly in the U.S. housing market, despite not assuming a recovery in 2025 [23][24] Other Important Information - The company is updating its full-year guidance to reflect ongoing macroeconomic uncertainties and the timing of tariff impacts [43][44] - The company plans to reduce its annual dividend rate to $3.60 per share starting in the third quarter to create capacity for future investments and debt repayment [53][54] Q&A Session Summary Question: Estimate of pull forward tariff-free imported product currently on the ground - Management indicated it is difficult to provide an exact estimate but noted a significant imbalance between declared sell-in and actual sell-out, with a potential 60 to 90 days of inventory from excess Asian imports [61][63] Question: Promotional calendar and second half outlook - Management stated they significantly reduced promotional efforts in Q2 and expect a more muted promotional environment in the second half, with a focus on maintaining margins [65][66] Question: Sellout in North America MDA in Q2 and Q3 - Management described the sellout as flat to slightly down, with expectations of improvement as the excess inventory is sold through [104][105] Question: Update on the India sale - Management anticipates proceeds in the range of $550 million to $600 million and expects to close the transaction by the end of the year [109][111] Question: Confidence in pricing actions to offset tariffs - Management confirmed that necessary pricing actions have been largely implemented to offset tariffs, although the mix has been negatively impacted [113][114]