惠而浦 (WHR) 2026年第三季度业绩电话会议：更新利润率展望与新一轮提价

核心要点

• 惠而浦（NYSE: WHR）公布2026年第三季度净销售额为37亿美元，北美行业需求放缓对营收造成拖累。
• 持续经营EBIT利润率环比提升80个基点至2.6%，但原材料、燃料、物流和关税成本上升限制了预期的利润率修复。持续经营每股收益（EPS）为-0.21美元。
• 公司宣布在北美进一步提价7%，在拉丁美洲提价最高达10%。管理层预计第四季度受到的提价益处有限，更完整的贡献将从2027年开始显现。
• 惠而浦更新了2026年业绩展望，预计可比净销售额将下降约1.5%，持续经营EBIT利润率将在2.0%至2.2%之间。
• 在库存减少、现金回收及供应商付款举措的支持下，全年自由现金流指引维持在约3亿美元。预计年末净债务将低于45亿美元。
• 管理层对2027年利润率扩张持谨慎乐观态度，理由包括提价滞后效应、新产品推出以及2.9亿美元的结构性制造与供应链成本效益，其中大部分预计将在明年实现。

核心财务数据

惠而浦表示，北美和拉丁美洲的提价抵消了全公司范围内的组合压力，为利润率环比改善贡献了250个基点。净成本贡献了100个基点，而原材料通胀使利润率降低了75个基点，净关税则带来了225个基点的阻力。

业务与经营表现

北美地区

该季度北美行业需求下降3.3%，符合惠而浦全年约下降5%的预期。4月和7月的提价以及新产品上市带来了约230个基点的利润率环比扩展，但通胀将净EBIT利润率环比改善幅度压缩至30个基点。

计划于11月1日在加拿大、12月3日在美国进一步提价7%。该举措结合了促销定价、最低广告定价以及部分情况下的首购成本调整。管理层表示，几个百分点的正面提价效应预计将延续至2027年。

渠道和公司库存均处于低位。管理层表示，销量去杠杆效应大部分已经过去，在2027年之前可能会谨慎增加生产以重建库存。

惠而浦的制造与物流计划包括爱荷华州阿马纳（Amana）工厂的现代化改造、俄亥俄州佩里斯堡（Perrysburg）的垂直整合，以及墨西哥的制冷设备生产转移。公司还将美国本土配送中心数量减少了25%，同时保持97%的客户在配送中心100英里范围内。这些举措代表着2.9亿美元的结构性成本效益，大部分预计将在2027年显现。

拉丁美洲地区

在销量的推动下，拉丁美洲地区的销售额在扣除汇率因素后增长了2.5%。由于销售重心偏离了Grupo Casas Bahia偏高端的产品组合，EBIT利润率降至2%。

公司宣布在该地区全面提价最高达10%。管理层预计第四季度的影响有限，因为大部分提价将在期末生效。管理层预计随着零售库存的调整和销量的重新分配，产品组合将随着时间的推移回归正常。

全球小家电（SDA Global）

全球小家电业务实现了18.6%的EBIT利润率。季节性客户订单从三季度推迟至四季度，其中10月份的美国订单同比增长约40%。管理层重申了对全年实现双位数增长且利润率有所提升的预期。

管理层业绩指引

更新后的全年利润率桥接图包含来自价格/产品组合的25个基点正面效益，扣除通胀和销量去杠杆化影响后的125个基点净成本阻力，100个基点原材料阻力，以及缓解措施后75个基点的关税阻力。汇率预计将贡献25个基点。

管理层表示，这些关税假设仅包含目前已宣布的措施，不包含未来潜在的贸易政策变化。

风险与关注事项

• 北美非必需家电需求依然疲软，尽管更换需求继续对市场构成支撑，但高端产品组合依然承压。
• 钢材、树脂和贱金属通胀仍是重大阻力。管理层指出，北美钢材价格在过去12个月中上涨了约50%。
• 油价波动可能会影响2027年的树脂、燃料和物流成本。
• 关税环境仍存在不确定性，尤其是涉及加拿大的部分，不过管理层目前假设环境总体保持稳定。
• Grupo Casas Bahia的破产重组继续影响拉丁美洲地区的产品组合、应收账款和销量分配。管理层预计第四季度后可见度会更高。
• 价格上涨可能会导致部分消费者转向低价型号，尽管管理层尚未观察到对整体品类需求产生重大影响。

分析师问答要点

2027年利润率驱动因素：管理层拒绝提供形式上的2027年指引，但表示结构性成本削减、按价值设计（Design-to-Value）生产力以及提价滞后效应为利润率扩张奠定了坚实基础。惠而浦三大钢铁供应合同中已有两份完成续签，第三份正在深入谈判中。

自由现金流与营运资金：与Grupo Casas Bahia相关的约1.5亿美元应收账款影响了第三季度的自由现金流。惠而浦预计将在第四季度收回约1亿美元。公司还计划通过收收款项、优化库存和改善供应商条款，实现全年约3亿美元的营运资金改善。

流动性：惠而浦报告称，包含现金和资产支持贷款额度在内的可使用流动资金超过30亿美元。自8月以来未曾使用过循环贷款，且公司在2028年之前没有重大债务到期。

置换需求：管理层表示，目前市场以置换购买为主，而可选消费需求占了预计全年行业降幅的大部分。可选消费活动疲软对产品组合不利，因为这部分通常包含利润率较高的产品购买。

定价与市场份额：管理层表示，即便在提价方面保持领先会带来一定的市场份额风险，提升利润率依然是首要任务。惠而浦表示今年迄今的市场份额保持稳定，新的高端产品将对定价和产品组合提供支撑。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good morning, and welcome to Whirlpool Corporation's Third Quarter 2026 Earnings Call. Today's call is being recorded. Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer; Roxanne Warner, our Chief Financial Officer; Juan Carlos Puente, our Executive President of North America and Global Strategic Sourcing and Ludovic Beaufils, our Executive President of KitchenAid Small Appliances in Latin America.

Our remarks today track with the presentation available on the Investors section of our website at whirlpoolcorp.com. Before we begin, I want to remind you that as we conduct this call, we will be making forward-looking statements to assist you in better understanding -- more Corporate's future expectations. Our actual results could differ materially from these statements due to many factors discussed in our latest 10-K, 10-Q and other periodic reports. We also want to remind you that today's presentation includes non-GAAP measures outlined in further detail at the beginning of our earnings presentation.

We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you with a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the Investor Relations section of our website for the reconciliation of non-GAAP items to the most directly comparable GAAP measures.

[Operator Instructions] Following our prepared remarks, the call will be open for analyst questions. [Operator Instructions] With that, I'll turn the call over to Marc.

Marc Bitzer

Thanks, Liz, and good morning, everyone. During the quarter, our execution focused on 2 core imperatives: protecting and expanding our margins in a tough macro environment and disciplined cash management. These imperatives not only shaped our third quarter results, but are also driving our actions as we move towards the end of 2026 and into 2027.

What you will hear today are essentially 4 key messages: First, we delivered another quarter of sequential margin improvement against macroeconomic challenges that undoubtedly intensified over the last 3 months. Second, we made good progress on our pricing actions, in particular in North America. This progress was partially offset by incremental inflationary costs. And as a result, we did not deliver the margin step-up we had expected. In line with a slower pace of margin recovery in the third quarter, we are updating our full year margin guidance.

Third, we have implemented further pricing actions of 7% to 10% in North America and in Latin America. We expect the impact of these new actions to be somewhat limited in Q4 and fully ramping up in January. Our structural cost initiatives around strategic sourcing, manufacturing optimization and warehouse footprint consolidation are on track. But as mentioned in prior calls, the majority of the cost benefits will impact 2027. These structural cost initiatives together with the additional pricing actions set up a strong foundation for margin expansion in 2020.

And fourth, we are prioritizing highly disciplined working capital management that positions us to deliver on our full year free cash flow goal. Turning to Slide 7. Let me cover our third quarter results. We delivered net sales of $3.7 billion, which was impacted by softer industry demand in North America. We saw a sequential margin improvement of 80 basis points to 2.6% and resulting in ongoing earnings per share of negative $0.21.

While we made progress on our pricing and cost takeout actions, this progress was partially offset by higher raw material, fuel and logistic costs. During the quarter, we maintained strict working capital discipline to prioritize balance sheet strength. Our free cash flow was a consumption of approximately $1.1 billion which was negatively impacted by the timing of our recovery of insurance claims related to Grupo Casas Bahia. This is a major retailer in Brazil, which filed for bankruptcy reorganization the equivalent of Chapter 11 in the U.S. in August.

We expect to receive a majority of insurance claim payments related to Vizient in the fourth quarter. Turning to Slide 8, I will walk through our sequential ongoing EBIT margin drivers. We delivered sequential margin improvement of approximately 80 basis points. Our pricing actions in North America and Latin America fully offset the mix headwinds across the business and result in 250 basis points of improvement. Net cost was a tailwind of 100 basis points as we continue to make progress on structural cost takeout and ongoing cost productivity with the benefits being partially offset by the impact of fuel and logistic costs. Raw material inflation unfavorably impacted margin by 75 basis points, primarily driven by higher steel, resin and base metal costs.

Net tariff impact was an unfavorable 225 basis points driven by incremental Section 232 tariffs in the U.S. Marketing and Technology investments increased by 25 basis points, offset by a favorable currency impact of 25 basis points, primarily from a Mexican peso and Brazilian real and favorable transaction impacts of a [ probaly ] 25 basis points. Now I will turn the call over to Juan Carlos to review our MDA North America results.

Juan Puente

Thanks, Marc. Turning to Slide 10, I will provide an overview of our MDA North America segment. In the third quarter, net sales were $2.5 billion, negatively impacted by the persistence of industry demand. In Q3, the industry was down 3.3% and which is in line with our full year guidance of down approximately 5%. The solid execution of our price increase implemented in April and July combined with our new product launches, drove approximately 230 basis points of sequential margin expansion. This improvement was masked by the inflationary headwinds resulted in 30 basis points of net sequential EBIT margin benefit.

More recently, we announced an additional 7% price increase effective November 1 in Canada and December in the U.S. while the impact of Q4 results will be limited, we expect this action, combined with our structural cost takeout actions to further expand margins in 2027. Turning to Slide 11, let's review the positive impact of this price increase in our retail sellout price data. As a reminder, this chart represents the aggregated view of thousands of price data point collected every week from public sources. The yellow line shows that our price realization progressed strongly through Q3, maintaining 8% to 9% gains over the January 2025 baseline prices.

The blue line shows that competitors' average pricing has also meaningfully moved upwards since the beginning of 2026. This trend is consistent with the full burden of tariffs and increased transportation costs. Ultimately reinforcing our confidence in the long-term value of our domestic footprint. Another element that is centered to our strategy is delivering meaningful product innovation that delights our consumers.

Turning to Slide 12. You can see our latest industry first product induction in our refrigeration lineup. We recently launched the industry-first refrigerator with an indoor [ novatized ] maker under the Whirlpool brand. This true counter debt French store refrigerator is a great addition to our portfolio. It hits the marketplace as the consumer demand for logged ice accelerates across North America, setting a new benchmark for consumer innovation. By combining highly valued features with premium design, this product serves as a standout differentiator that directly supports our premium growth strategy. Turning to Slide 13.

We're bringing another industry-first innovation to our core laundry category. Our Table washer now features a removable delicate basket which addresses a long-standing consumer pain point by allowing delicate items to be gently washed at the same time as the everyday laundry load by combining delicate care with daily laundry capacity in a single cycle. This unique offering drives premium mix and reinforces our product leadership in MDA North America.

On Slide 13, we're maximizing benefits from our manufacturing and supply chain footprint to optimize our structural competitive advantage. In our last earnings call, we discussed 3 key manufacturing footprint initiatives that we announced in Q1. A multiyear modernization and operational optimization of our plant in Amana, Iowa, unlocking supply chain efficiencies through vertical integration in our facility in Perrysburg, Ohio and shifting refrigeration production between Supsa and Ramos, Mexico to leverage scale and lower conversion costs.

We have hit key milestones across all 3 initiatives, and our progress year-to-date gives us confidence in our operational trajectory. In U.S. logistics, we have completed 25% reduction in our local distribution center count and continue to advance with the consolidation of regional distributions and return centers. Importantly, we are maintaining reach and proximity with 97% of our customers remaining within 100 miles of our distribution centers. In total, these manufacturing supply chain actions represent $290 million in structural cost benefits. While these benefits are largely expected into 2027, our cost initiatives continue to progress contributing to our sequential margin progress and offsetting incremental fuel logistics costs.

Now I'll turn the call over to Ludo to review our MDA Latin America and SDA global results.

Ludovic Beaufils

Thanks, Juan Carlos. Turning to Slide 15, I'll review the results for our MDA Latin America business. Excluding currency, net sales increased 2.5%, driven by higher volume, partially offset by price/mix. We experienced temporary margin pressure as our mix shifted out of Grupo Casas Bahia more premium portfolio, resulting in an EBIT margin of 2%. As retail inventories adjust and our volume redistribution settles, we expect the mix to normalize over time. We have announced incremental price increases across the segment of up to 10%, effective in Q4, and which, alongside our key new product launches are expected to increase profitability in 2027.

Turning to Slide 16, you can see 2 key product launches that are driving premium growth in MDA Latin America. First, a new lineup of induction cooktops in Brazil, featuring a fresh design that aligns with the premium breast amp aesthetic. Second, the new Whirlpool and Brastemp French store refrigeration line, with its stunning Black liner combining sophisticated design reversal functionality.

These are just 2 examples of how we're expanding our premium product pipeline in Latin America with high-margin products as we continue to focus on margin expansion.

Turning to Slide 17. Let's review our SDA global business. New product launches in our direct-to-consumer channel continued to support share gains globally and helped deliver a healthy EBIT margin of 18.6% in the third quarter. We had another quarter of strong sellout globally, while seasonal order shifts pushed the top line growth into Q4 as evidenced by the approximately 40% increase year-over-year in our October U.S. orders.

We continue to take actions to grow our business beyond our core categories and have recently bolstered our portfolio of licensed products by expanding our kitchen accessory sales through our direct-to-consumer channel. We are also introducing Kitchenette Kids, a new line of Royal play toys with light sounds and motion to captivate aspiring young shafts. Kitchenatoys can already be found in key retailers globally.

On Slide 18, let me showcase 2 of our newest product innovations. On the left is our KitchenAid 2026 design CRE stand mixer, the luminaire. It combines the built in light of our new Artisan Plus with the new fluid glass ball and the result is a striking new visual expression for this iconic kitchen appliance. The luminaire complements our successful Artisans+ lineup, which has generated strong interest from trade customers and enabled us to capture high-value incremental flooring and a high-mix POS. On the right, we're highlighting the expansion of our kitchenAid Gold cordless line. We've added a greater slicer shredder and a vacuum sealer, which means a single rechargeable battery can now power 10 different appliances across the kitchenAid gold collection.

To summarize, we've had a strong performance in the first 3 quarters and now enter Q4 highly confident in our ability to deliver double-digit growth for the year at highly accretive margins, in line with our full year guidance. Let me now turn the call over to Roxanne to review our updated guidance and capital allocation priorities.

Roxanne Warner

Thanks, Ludo. Turning to Slide 20. We are updating our full year guidance across organic net sales, ongoing EBIT and ongoing EBIT margin to reflect the current piece of our margin recovery. On a like-for-like basis, we now expect revenue decline of approximately 1.5% in 2026. This reflects softer demand in the U.S. along with price and mix pressures, particularly in Latin America. We anticipate our full year ongoing EBIT margin between 2% and 2.2% driven by continued momentum from our new product launches, strategic pricing and sustained structural cost deco.

We are being extremely aggressive around what we can control. On a full year basis, we expect to deliver approximately $250 million of gross cost savings driven by design to value cost reductions and strategic cost initiatives. These positive drivers are being offset by the negative impact of volume deleveraging tied to softer demand and fuel and logistics costs resulting in net cost takeout below $150 million.

Despite these external headwinds, our cash generation is resilient. We expect to deliver free cash flow of approximately $300 million or approximately 2% of net sales driven by a rigorous working capital discipline, including proactive inventory reductions and stronger cash collection. Turning to Slide 21. Let me walk you through our updated EBIT margin guidance for the year. We are now expecting a benefit of 25 basis points in 2026 from price mix with the benefits of our multiple pricing actions [ expanding ] into 2027. We expect a 125 basis point headwind from our cost actions being more than offset by inflation and volume deleverage.

We now expect a 100 basis point headwind from raw material inflation, driven by elevated resin and base metal costs. We expect a lowered 75 basis point headwind from the impact of tariffs, net of tariff mitigation actions. It is important to note that these impacts represent currently announced tariffs and do not factor in any future or potential changes in trade policy. We also now expect no material impact from marketing and technology and a favorable currency impact of 25 basis points driven by the Mexican peso and Brazilian real.

Turning to Slide 22. I will review our updated segment guidance. Starting with industry demand, we now expect MDA Latin America to increase 5% to 7% with our expectations for MDA North America and FDA Global unchanged. For MDN North America, we now expect to deliver a full year EBIT margin of more than 2%. For MDA Latin America, we now expect to deliver a full year EBIT margin of approximately 3%. Our full year EBIT margin expectations for our FDA global business remain unchanged.

Turning to Slide 23. I will outline the components of our free cash flow guidance. As I mentioned, we expect to deliver approximately $300 million in free cash flow in 2026. We expect our lower earnings contribution to be fully offset by robust working capital management, including stronger cash collection and inventory optimization, which are expected to protect our cash flow generation and maintain our balance sheet resilience to navigate challenging market conditions.

Turning to Slide 24. Let me reiterate our capital allocation priorities. Investing in organic growth through product innovation is critical to our business. We will continue to invest in product innovation, digital transformation and cost efficiency projects with approximately $400 million of CapEx expected this year.

Turning to our balance sheet and capital allocation. We are very pleased with the proactive steps we've taken to secure long-term financial flexibility in what remains a challenging operating environment. As part of our commitment to optimizing our portfolio, we fully exited our stake in [ Veco ] Europe during the second quarter. In tandem, our strategic capital structure actions have successfully extended our debt maturity profile leaving us with no major maturities until 2028.

Furthermore, we are raising our year-end net debt outlook. We now expect to close the year below $4.5 billion, improving on our prior target of net debt of less than $5 billion. Now I will turn the call back over to Marc for closing remarks.

Marc Bitzer

Thanks, Roxanne. Turning to Slide 25. Let me wrap up before we take questions. Despite the persistent macroeconomic headwinds, we are focused on what we can control, driving margin expansion through pricing realization and disciplined execution of our structural cost takeout actions are front and center. Our rigorous working capital management is protecting our free cash flow, reinforcing our balance sheet and maintaining our financial flexibility. Beyond our core major appliances, our business units continue to deliver exceptional value.

[ Incinerator ] delivered its second consecutive quarter of year-over-year revenue growth and SDA Global is on track to deliver a very strong performance in 2026. As we look forward to 2027, we are cautiously optimistic. A combination of, one, a very strong pipeline of new product launches; two, the benefits from the pricing actions we have already taken and announced; and three, the structural cost reduction initiatives that are fully underway together create a solid foundation for margin expansion.

And this is absent of a change in the macro environment. Most importantly, we are fully committed to creating shareholder value. Strategic investments in our U.S. domestic manufacturing footprint are deepening our competitive advantage and our portfolio of iconic brands and leading position in the builder channel will capitalize the tailwinds from eventual U.S. housing market recovery.

Now we will end our formal remarks and open it up for questions.

Operator

[Operator Instructions] Your first question comes from the line of Sam Darkatsh from Raymond James.

分析师问答

Sam Darkatsh

Yes. Marc, Roxane, Juan Carlos, Ludo. How are you First question, a lot of moving parts. We're starting to get a little bit more visibility into 2027. As it stands right now, I mean, I know things are fluid. But as it stands right now, what is RMI and tariff and cost takeouts look like for 2027? And then I've got a quick follow-up.

Marc Bitzer

Yes. So Sam, I mean, obviously, as you know, it's -- we give guidance and everything else in more detail in our January call. Having said that, let me give you a little bit of perspective and as you may have heard in my remarks earlier, we're cautiously optimistic for 2027.

Now on the cost side, specifically. And again, these are, call it, the external cost elements and the internal ones. Let me first start with the internal ones. What we call our gross productivity from design changes, et cetera, is actually also is a pretty well on track. You also need to understand that -- and you know it is these are massive engineering efforts, which very often have a quite a bit of sizable carryover benefit. So we know pretty much today what we will get next year from these cost changes and they're on track.

The second part is what we earlier highlighted is the structural cost changes with what we've been doing in the [ manner, ] what we're doing in [ super, ] what we're doing in Brazil also between Argentina and Brazil and lastly, [ Perisur. ] These are all massive structural cost changes, frankly, which cost us money this year, so they didn't give us that much benefit this year, but they will carry over. So we feel very good about, call it, the cost which we can control. And I would argue, from today's perspective, we're probably heading towards 1 of the highest gross productivity numbers in a number of years.

The flip side is, as you point out, RMI and tariff. The tariff. I mean, we all know that we don't know. Right now, we're assuming it's pretty -- a more stable tariff environment. Obviously, there's a little bit of uncertainty on the Canadian tariff. That's probably the only one. But right now, factor-in just staying, hopefully, at one point will go away. But again, we just don't know right now, we just assume it's stable.

On the raw material. As you know, the 2 biggest raw materials to have is steel and resins. Steel is in particular for North America has seen a massive price increase over the last 12 months, actually of 50%, which I think in many ways, you could argue it's a little bit disconnected from reality because iron ore went down and the international steel prices are on a completely different level. Having said that, we locked in 2 out of 3 contracts, which are long-term contracts. And I would call them at fair prices, not spectacular, but they're fair. So to some extent, we have a certain buffer and we have a certain protection not yet entirely.

But it's going to be a hit versus the full year run rate. Having said that, that is largely baked in already in the back half of this year. So sequentially, it's not that much of a dramatic change. And then you have a plastic side of a resin side, which in the long term, typically follows oil as you've all seen, all just in Q3 went up 20% for the reasons which we're all aware of. And right now, the only thing which we can do right now, if oil stays, let's say, around $100, yes, that would largely be reflected with our run rate of Q3 and Q4.

But we all know there is a certain, call it, volatility risk, which by the way, could go in both ways on the oil side heading into 2027. So on raw material, I think oil is right now the biggest factor, which we can't fully foresee, steel, a little bit better because we have these contracts. And then, of course, you have a large tail end on raw materials, which for entire '26 were not necessarily favorable. But I would say largely reflected in the Q3 and Q4 run rate.

Sam it was a long answer to a short question, but I just want to give you a little bit of color.

Sam Darkatsh

The second question, the 7% North American pricing effective in December. I'm guessing that's mostly PMAP, but is that PMAP, is that list? And then what is the 2027 price rollover at this point, understanding that almost everything is really to 27%, not to 4Q?

Marc Bitzer

Sam, let me start and maybe I will ask Juan Carlos to give some additional color. And then let me combine your question, which probably like the question, which we might get on Page 11 anyhow on the price development, which Again, this chart on price 11 shows pretty much with price development since January 25, us versus a competitor. You clearly saw in Q3, we were June, July, we were aiming very high.

We had to course correct a little bit in Q3. And right now, we're kind of call it boosting another price element in Q4 and that's what's already been announced to the trade. Obviously, we trade is fully aware of what we're doing, which, in reality, there are some, call it, more smaller tactical moves throughout October, November and then there's a significant move effective kind of first week or end of the first week in December, which fully carries over into next year.

That significant move, which again is a ballpark of 7% is actually a combination of MAP, PMAP in some cases, also first cost. So it's a mixed bag of elements, but it's largely on the map where we also gave -- and the [ Mather ] we gave trade visibility for quite some months out. So it's not just a kind of a 1 week, it's a fairly predictable one. Again, that has already been communicated to the trade, but it's a combination of different tools. Juan Carlos?

Juan Puente

Yes. So obviously, the focus is in the U.S. In the U.S. it's 7% starting December 3, and in Canada is November 1. But it is -- basically, we provide to our trade partners 90-day lead time on all the promotional pricing moving forward, and that's what has been communicated with the trade..

Marc Bitzer

Just the last comment I want to make, Sam, on your carryover question. Needless to say when you kind of with the price increases and knowing that this is a holiday quarter, you can't impact that much anymore of Black Friday in the promotion period would cause correct a little bit, but you can't impact it. So yes, there in the month of December, we expect a sizable lift, and that's already baked in.

And of course, that lift will carry over into next year. That's part of the reason why we're cautiously optimistic. Again, this is a competitive environment. But this is what we communicated. And obviously, exit run rates, we have, I would say, several points of positive pricing carrying into '27.

Operator

Your next question comes from the line of David MacGregor from Longbow Research..

David S. MacGregor

I wanted to ask you about the fourth quarter free cash flow that's implied in your $300 million for the year. And specifically around working capital because you talked about reducing inventories, increasing collections. Maybe you can provide some examples of exactly what is your plan to do differently there that gives you confidence in that number? And then also, you've got your Casas Bahia recovery coming through in 4Q and how much of that, should we be more...

Marc Bitzer

So David, let me maybe give you a high level, and then I would ask Roxane to give you a little bit more color and details. So first of all, as you know, I mean, in Q4, that's typically the quarter where our cash flow flips from negative or low to positive. So that's not unusual for typical seasonality. Q3 is -- and on time give a little bit more color, is heavily impact because, of course, we had to receivable from Casas Bahia are out negative in Q3, of which we collect a big portion back into Q4.

If you look at our full year cash flow guidance in the bridge, of course, we're kind of softer on the earnings side, and we basically make it up on the working capital. You also saw on the working capital initially, so it's now showing $300 million. If you compare it to last year, last year, we consumed working capital of $150 million. So the first $150 million is basically just to flip back to normal working capital. But yes, we challenge ourselves with an additional $150 million of working capital, which requires work, and the first 1 to admit it.

The reason why we're positive about it is our inventories, which is typically the most difficult piece to kind of adjust in the short term are on a very low level. I would even argue, to some extent, too low level, so typically, when you have a lot of work in Q4 to take it down, we're already at that level. So we know that's on a pretty good level. In fact, we may even produce more, which gives us a little bit of a boost on the payable side.

So -- but yes, we're collecting. We challenge ourselves with an additional $150 million working capital beyond what we had in mind to offset the earnings shortfall. And right now, we have plans in place to go after that Okay?

Roxanne Warner

So just to put some numbers, particularly on the Casas Bahia portion. In Q3, there's approximately $150 million of the receivable that we wear and that has an impact on the Q3 free cash flow. Our expectation is to then collect approximately $100 million of that in Q4. So you see that timing shift -- and then as Mark said, to be very specific, we came into this year saying that we're going to go after working capital with everything we have, and that's exactly what we did. We did in the first half, execute the inventory actions precisely as we mentioned in the call that we would do. And then now in the Q4, we're very, very focused on cash collections, reducing over the use to levels that we haven't had before. And then similarly, on accounts payable, working very closely with our suppliers to get those terms that we need to ensure that we deliver the working capital of approximately $300 million for the year..

David S. MacGregor

Okay. Second question, I guess I just wanted, Mark, to get your impression on replacement demand. And I think we can all track what's going on in the builder channel and discretionary. But the replacement demand we've always thought of as being kind of the rock, right? That was the 55%, 60% of demand that we knew we could count on, it seems as though that's easing up a little bit. People are maybe finding it a little easier on the household cash flow to repair rather than replace. What are you seeing in the numbers right now when you look at replacement demand? And how are you thinking about that.

Marc Bitzer

Yes. So David, I would say there's a long-term perspective on replacement and kind of more temporary one. First of all, the long-term one is reality is we're living right now in the replacement market. You also -- you know as well as anybody else at the minus 5% of manless which we're forecasting is largely coming off discretionary. It's -- that's essentially what -- that's a painful part because of discretionary, as you all know, is the more margin-rich and mix rich part of our business. So replacement is right now a dominant factor now come to a temporary one, which you probably alluded to, we've seen in situations in the past where you had a very negative consumer confidence or elements that people even hold back some replacement decisions.

For example, on dishwashers, or on a second appliance. So we've seen this kind of situation before what people living in a replacement market, which with our supply chain, et cetera, we're well set up to deal with it. But right now, it doesn't help you on the mix side.

Operator

Your next question comes from the line of Mike Dahl from RBC Capital Markets.

Michael Dahl

Just wanted to start out on the price increase in North America. I mean, Marc, you mentioned you're having a course correct a little in 3Q. And when you think about the additional price actions, it doesn't seem like, at least at this point, your competitors didn't follow on the summer increases, and I don't believe they've announced similar ones, the way you have incrementally.

So is this going to represent kind of a shift in how you're viewing margin preservation or progress versus share in the near term? Or how would you describe that?

Marc Bitzer

Yes, Michael, first of all, obviously, as you know, I can't comment on the competitive price move or but the plan or not plan I can refer to what is not on the slide, but what we've seen in October, and we've seen price moved by the competitors. So -- but that's just what we see, and I can't speculate on going forward. As we've shown in Q3, we will take the lead, and that's what we're doing because it reflects real cost, it reflects real material costs and real tariff costs.

So yes, we take a very rational approach and but it's in the context of what you alluded to is our focus is on margin expansion. And that is our focus in Q4. That's our focus in 2017, and you will see that also when we talk about it. And if sometimes you go a little bit ahead and you take a certain risk on the share, that's what we will do and what we've been doing, but all in the context of margin expansion and frankly, even if I look year-to-date, our overall year-to-date market share is pretty stable. That comes from very strong new products and today, partially you saw already something. But in particular, when you look at our Q1, what we will show where we have a lot of strong products coming.

And that's why I think it's also -- I think we can take a certain risk on pricing because we have good products.

Michael Dahl

Got it. Got it. Okay. And then shifting gears, I want to make sure we understand your comments about steel dynamics. So I think we all appreciate as a large volume buyer not paying anywhere close to what the spot rates would have done. But I think conceptually, you guys are -- your steel buy is multibillions in the U.S. alone I believe, correct me if I'm wrong.

So even if it's not 50% even in its 20%, 10%, I mean that could be theoretically hundreds of millions of dollars in terms of incremental steel costs to you. And when I look at your bridge in the second half of this year on raw mats in total, raw mats in total aren't that bad. So your comment about that being largely reflected in the second half. Can you just flesh that out a little and maybe again, like correct us if we're wrong on kind of ballpark there, but help us understand what you're really trying to say on steel into '27?

Marc Bitzer

Yes, Michael, just as a caveat is, of course, I don't want to tell every of my competitors what I'm doing on steel. Second of all, we have steel partners out there, and we're trying to be respectful and not revealing too much detail. To give you a little bit broader context and some of you followed that very closely. A couple of years ago, we changed our steel contracts from annual steel contracts to multiyear steel contracts. That was actually pre-election pre-tariffs because we just want to be secured and we didn't want to have big surprises.

We -- steel contracts, in their nature, are a little bit like a hedging contract. So you basically typically define certain floors. You define a certain cap, and you typically agree on a trailing price versus a spot rate. So it's a combination of this one. What it basically does is it gives you clearly a certain buffer. It gives you too big a discount versus spot rates, but ultimately, it doesn't completely disconnect you from a long-term steel price trends. That's the reality.

And we felt that also in '26. So yes, we had multiyear contracts. But given that the steel prices went pretty much for roof, we also felt it. I really want to emphasize A big part of that cost is sitting in our Q3 and Q4 margin. So a big element of our Q3 is not in line with our expectation was actually raw material being very prominent in this one.

In that context, Mike, we have secured 2 of these long-term contracts already because they pretty much expired or are about to expire and we renew them. And as I really want to emphasize, I would call them at fair prices. Not hugely positive or negative, but it gives us a certain predictability. And we know pretty much what we carry into next year, which again, is not too different from our Q3 r Q4. There's one contract which is still open, but I'm confident we can close that also pretty soon.

Of course, there's always a question what happens to steel price in the long term. And we're all seeing this massive run-up in the last year of basically almost 50%, which I want to emphasize is disconnected from iron ore prices. So there is not a big rationale element behind this one. And ultimately, we also know thankfully, some of the steel producers are putting in capital investments to improve productivity because, as you know, American still today is not cost competitive versus China or Europe by a wide margin.

And we welcome these investments to make it more productive and competitive because we all believe in a strong American steel industry, but it only works [ if it's ] competitive. And there is capital investments, we're going in the right direction. You also know where our capacity investment plan, which may not immediately help you for '27, but over time, we'll bring a, what I would call, a much healthier, much stronger U.S. steel market.

Operator

Your next question comes from the line of Susan Maklari from Goldman Sachs.

Susan Maklari

My first question is going back to your comments, Marc, on the channel inventories. It sounds like they are running fairly lean despite the deceleration in demand that we saw this quarter. Can you just give a little more color on where things are, what that implies for the fourth quarter and as we think about going into next year?

And within that, as you mentioned that your market share was stable, is there any mix shift in terms of the floor space that you're -- that you have that could also be a benefit as we think about next year as those new products continue to come through?

Marc Bitzer

Yes. Susan, let me start and maybe also and Carlos can give some additional color on this one. So first of all, I would say, trade inventories and our inventories are low. And I'm talking about North America, in particular. So I think there is a certain cautious side, both with the trade and frankly also with us. So I think the combination if you would look at an aggregate number of inventory between us and our retailers with pro 1 of the lowest in multi years.

Again, that's probably more reflective of people we're cautious about the current market. which for Q4 means also we certainly don't have to lower production any further. So all the volume deleveraging, which we talked about is largely behind us. So we're sitting right now on low inventories, and we're actually carefully because we don't want to overshoot kind of ramping up production also to be in the right inventory position as we head into '27.

So right now trade inventories are low, which by the way is also part of the reason by industries and our revenues were also down in Q3 because we know specifically where some of our retail partners reduced inventories. But again, it's right now, it's certainly not elevated. It's quite the opposite. And we will -- we have work also in front of us to kind of rebalance everything.

Juan Puente

I would just add to consumer confidence and market volatility is what is translating into trade and also being a little bit more cautious on the supply chain and be more effective. Like Marc was commenting, we will be able to live more of inventory so we can get that one back on track, and we can capitalize on growth opportunities moving forward.

Marc Bitzer

So the only other comment I want to make relates to your mix question. I mean, as we talked about, and we didn't reiterate today we feel despite the softness of a discretionary demand side, we feel very good about the premium products we brought to the market this year. So the kind of volumes, which we've seen on the kitchen at build in line some of our French or bottom out, which we brought to market, we feel very good. So that -- it works even more the discretionary environment is just very soft, but even I'm giving that into context, I'm really pleased -- and again, we will talk a lot more in our generic call.

We're now bringing a major push on our premium laundry space, which has not yet launched, but we launch throughout Q1 and Q2 where we have another strong element to help on our mix, despite discretionary poor or discretionary soft environment, which probably will be around us for some time.

Susan Maklari

Okay. That's great color. And then maybe shifting to the balance sheet. You've obviously done a lot in the last couple of quarters to restore your liquidity and you're guiding to having less than $4.5 billion of debt by the end of the year. At a high level, do you feel like you have enough liquidity to operate in this kind of an environment?

And can you just talk about the ranges and what happens if things continue to stay more challenging versus perhaps an incremental recovery next year?

Roxanne Warner

Thanks,. So a very, very short answer to your question would be, yes, we absolutely have the liquidity and the financial flexibility that's needed to operate in this challenging environment.

The longer portion of the question is, as I mentioned in my earlier remarks, I am very, very happy that we very early on took the proactive steps that we needed to have the liquidity for us to operate in an environment that, at that time, we saw was challenging. What that has led to us is a situation where now we have over $3 billion of available liquidity in a combination of cash as well as our asset-backed lending credit facility.

We are now in a position based on the strong work that we've been doing in working capital to adjust the guide for the net debt to say that it is one that will be lower to a number that's below $4.5 billion. But then the other thing, Sue, as I've touched on before is based on these proactive actions that we've taken, we've cleared the runway in terms of the next time we have a huge debt maturity, it's not until 2028, which gives us the opportunity with the proactive board actions we've taken in terms of cost and pricing going into 2027, to bring us to a position where we can expand margins and that also would then contribute overall to the free cash flow and contribute to our priority, which is paying down our debt.

Marc Bitzer

Susan, let me maybe add some additional comments on the balance sheet because obviously, everybody knows we've done a lot of actions in Q1 and Q2 be it between equity offering, renewal of revolver credit in some bonds. Some people probably accuse us, well, you went too far. But in reality, if we would do the same action, first of all, keep in mind, it would cost us 1 point to 1.5 points more than it did half a year ago. So we're actually in hindsight very pleased with the timing of when we took the action.

Two, to give a little bit color on liquidity, yes, we took a lot of time to renegotiate revolver credit. We have not used the revolver since August. It's 0, i.e., we haven't even tapped into this one. As Juan pointed out, we have a lot of liquidity end of the year. Some people might even argue too much liquidity.

But I think seeing what has happened around our industry for the last 2 or 3 years, we want to be on the safe side. I'm the first one to admit the success liquidity cost us interest, and that's why the big part by EPS was disappointing also but right now, I'm prepared to carry a little bit too much liquidity around us because we're living in a very uncertain environment, but we feel very good about the strength of liquidity, balance sheet, the maturities where we are. So I feel much better despite all the negative news in the industry.

Operator

Your next question comes from the line of Rafe Jadrosich from Bank of America.

Rafe Jadrosich

Just on the working capital improvement that you're talking about for the fourth quarter and the full year, can you talk about how much of that is sort of structural versus onetime and how do we think about that going forward? Is there any specific metrics around like AR, AP that we should be thinking about in terms of a target?

Marc Bitzer

So Rafe, I would say, let me split it in 2 pieces or 3 of working capital. I think on inventory levels, I don't think with the current system constraints, I don't think we can go a whole lot lower. I mean we and we're testing this limit every day, but we're now over time, can we -- I would say, over timing 1 or 2 years, can we further improve our system, become better and how we manage inventory, yes. But it's in the current constraints, there's not a whole lot we can do more.

But payables, as you all know, largely follow what we do in our inventory because it's basically just production. Having said that, we've made some good structural progress on extending some terms. Not only with overseas suppliers but also some other suppliers. So we feel good about work, which has been done over actually the last 1 or 2 years on structurally expanding payment terms.

On receivables, I would say there's going forward, there's still some opportunities on addressing some of the terms because I think some of the terms do not necessarily reflect inherent logic that they should cover the inventory, i.e., we give more terms when they carry inventory. And that will be a discussion which we will have with our partners from the retail side.

The one big element you guys should also all keep in mind is a part of a working capital improvement comes also, yes, our Q3 revenues were down. Revenues are down but working capital requirements, in particular receivables also come down. So there is also an element of just reflecting to you brief in or brief out on the top line, which ultimately comes through in the working capital.

Rafe Jadrosich

That's very helpful. And then the second question, just when we think about the outlook in LatAm, specifically just Brazil, 2 things should -- can you remind us what the FX assumption is just because it's changed really materially in the last like 40 hours or so, like what's baked into guidance?

And then what's the sort of time line for recovery? And like what's the process right now with Casas Bahia, understanding you have the insurance recovery, but like on the fundamental standpoint in terms of the inventory clearance like like where are we in that process?

Marc Bitzer

So Rafe, let me maybe address the overall current and [ Ron, ] if you can address the customer here recovery.

So on the FX, first of all, I mean we typically don't publish our currency assumption. Having said that, keep in mind, when we talk about the Brazilian real, and obviously, you followed it, but day after election moved by 10%, which by way is pretty close to where it was at the beginning of the year, just to put it in context.

So yes, we've seen that massive currency move. There is elements, which call it softened a little bit. One is, of course, we have hedging in place in a strong rand environment, hedging cost to you, and now we will see the hedging benefit. So we're we will see only a fraction of these moves in our actual P&L once you net out the hedging. The second thing is which you also need to keep in mind, more operational. I'm not -- Yes, some of the components over time because some of them are imported, then cost you more.

At the same time, it makes the imports of finished goods a little bit more expensive. And keep in mind, we're a local producer. So from a competitive environment, [ I bet ] that's not necessarily all bad news for us because, again, we are a local producer in Brazil, much like where local producer in the U.S. So it's not all bad. But given that it is fresh, very transanal, we're now going through all for potential ramifications, which come with election outcome in Brazil.

Unknown Executive

Yes. In regards to the GCB recovery, there's a lot of uncertainty out there. The decisions from the judge on the bankruptcy proceedings happened just last week, which starts the clock a 60-day clock on the restructuring plan. So we're watching that intently. Obviously, we're a very big supplier to GCB a verb player in Brazil.

So we have a seat at that table, and we'll be watching how these guys proceed in terms of recapitalizing the business. This is going to take a little bit of time. We'll have more visibility as we exit Q4. Sequentially, therefore, there's not going to be a whole lot of change from Q3 to Q4. But we expect things to normalize going into '27 as the volume gets redistributed to other players and/or GCB reemergence with a much better structure.

Operator

Your next question comes from the line of Jeffrey Stevenson from Loop Capital Markets.

Jeffrey Stevenson

Today. I wanted to follow up on Latin America. And I wondered whether the 10% price increase across the region was incremental to the August 5% increase you announced last quarter for Brazil? Or was the timing push back on that? And then could you also talk about any sequential change in promotional intensity in the region as we move through the back half of the year?

Marc Bitzer

Yes. So the pricing we took in August, this was specifically Brazil pricing to the extent of about 5%. So we've actually being fairly pleased with the fact that our volumes held as we went through that price increase. Obviously, we were also dealing with the Casas Bahia situation at the time. So that led to a little bit of erosion in that pricing realization, but it's still there and being realized.

The up to 10% price is across the entire segment. So it's -- there's a wide range across the various markets that we deal with. Some of that is going in markets very, very shortly. You'll see limited impact in Q4 when it's all said and done, given that we're sort of unwinding and some of that will hit mostly December but not have a whole lot of impact to the quarter.

With that, we're also to the second part of your question, we're moderating to some extent, the promotional activity around Black Friday, again, in a variety of markets, in particular, I would say, in Mexico at this point into some [ dare ] as well in Brazil.

Jeffrey Stevenson

No, that's very helpful. And then I was hoping you could provide more color on the meaningful demand shift in your SDA global business from the third to fourth quarter, where you're seeing orders up 40% in October. Just any more color there would be helpful.

Ludovic Beaufils

Yes. So maybe let's take a quick step back on sort of how this business works, specifically in the U.S. You have large trade partners that buy in what we call bulk orders for the season to get ready for the [ meter ] activity happens around Black Friday in particular. These bulk orders will sometimes concentrate more so in Q3, sometimes more so in Q4. And this year is a year where they have shifted Q3 to Q4, which led to this more muted top line in the third quarter for the business.

The result of that is visible and tangible at this point. In our hands, that's the 40% increase in our order position as of this point in the month of October. Going into the quarter, we also had an extremely strong year-over-year comp in terms of orders on hand for the entire quarter because the good news is while these bulk orders are bulky -- or lumpy, I'm sorry, they are known. And so we're readying ourselves from a production standpoint as well as from a shipment standpoint. They are on our hands in our books and they're being shipped as we speak, which again gives us really strong confidence we can have a fantastic Q4 and exit the year at double-digit growth consistent with the guidance we've given.

Marc Bitzer

And Jeffrey, it's Marc again. I know this is a Q3 call, not necessarily an October business review, but obviously, just to echo what Ludo was saying, October for SDA because it's almost done, is a very, very strong month, which exactly confirms an actual what Ludo pointing towards to. So we feel very good about the SDA run rate and the over Q4. So we feel very good and exactly confirms what Ludo was highlighting.

Operator

Your next question comes from the line of Sam Reid from Wells Fargo.

Richard Reid

I wanted to touch on the builder channel here. I believe your pricing in the channel is already in place. Just want to discuss realization, any benefits that you got from that in the third quarter or whether that's supposed to ramp into the fourth quarter in 2027?.

Marc Bitzer

Sam, it's Marc, maybe I will have Juan Carlos to add on this one. I think what you're pointing out is a very important aspect, but the builder segment, as you know, is a very big part of our business. Unfortunately, not that big as it could be because of the market environment but it's a big part. But pricing mobile is not as straightforward as with retailers, very simply because builders give out quotes and we give course to build this quite a bit in advance.

And in many cases, we have annual or national contracts. So -- and of course, we're trying to find with our builder partners the right balance between not breaking quotes, which we've already given, but at the same time, not dragging our price increase forever. And that's a careful balancing app, which we've, I think, done in partnership with our builder partners. So I would say in Q3, we've gotten some pricing, in particular towards the end of the quarter, more and more of the pricing, maybe not fully to the level of retail, but we'll continue to work our builder partners to kind of make sure we reflect the real cost and keep also in mind in particular builder segment, you have cost increases coming from final mile delivery to construction sites, which are significant. We are getting it, pursuing it.

I think there's a good discussion with our builder partners because they understand these costs. But of course, nobody wants to surprise the final consumer with a cost increase.

Juan Puente

What I would add, so it is consumer pricing plus support that we give to the channel. In Q3, we saw a significant improvement between Q2 to Q3 more than more tended to Q3, and we will see some of that also coming in Q4. But it is pricing in the quotes plus the adds that we have on serving the customer, especially on the final mile like Mark was commenting. -- but that comes with a little bit of lag, and we saw in Q3, and we will see more in Q4.

Richard Reid

That's helpful. And then maybe let's switch gears and talk commodities a little bit. So I understand you've locked in, I think, 2 of your major steel contracts, but there is that third 1 that's still out there. I think you mentioned that you've had some visibility into that soon. Maybe just contextualize the timing there and then perhaps the magnitude of how large that contract hypothetically would be, so we have rough senses to implications for 2027..

Marc Bitzer

Yes, Sam, now getting really into the details of lower steel contract. And again, that's why I'm not quite sure I want to share with our competitors everything we're doing. Again, we're -- we have locked in 2 of the contracts and they are fair terms. The third one is, I would call it an advanced stages. And I'm confident we can close it. Keeping also in mind we have flexibility on shifting volumes between different partners. And between all of this one, I'm very confident we can close it very soon.

And -- and again, from today's perspective, assuming steel prices stay this -- at least stay on the super elevated level, which we are right now, I think we will not have a huge surprise coming into '27.

Operator

Your next question comes from the line of Eric Bosshard from Cleveland Research.

Eric Bosshard

To follow up, I heard the comment about making good progress with price on builders. That chart was super helpful of progress on retail pricing. The yellow line was helpful. It must be apples and oranges, the flow through of that I think you reduced your price mix number. And so can you just help me square like lots of progress, except that the realized price mix is less than what was targeted 90 days ago? What's the difference between those 2?

Marc Bitzer

So I mean, Eric, again, first of all, just to clarify, this chart, which you see on Page 11. Given that this is a price graping tool, which we get every week basically from websites, literally 10,000 of data pretty much on a monthly base. But by definition, is retail, it's not necessarily builder price, okay? So that's -- well, unless -- the indirect builder pricing, which will come through some of our home improvement channel. So -- but it's largely a retail pricing.

The builder pricing, of course, is a whole lot less covered and track-proof for the real data. Again, having said -- and I want to repeat what I said before, we got significant progress in Q3 on the builder pricing. It is -- it was clearly and is delayed versus the retail pricing. And that is simply driven by the fact that [ Nibbles ] now want to kind of give a huge surprise to consumer who already agreed on a certain overall price. And that's what we're kind of managing through but right now, I would say, overall, the moves on the builder pricing are just happening the same way, just a little bit later. Any comment?

Juan Puente

I would just say that it's magnified with a lower mix basically because of the replacement market. So that's kind of also impacted in the PMR.

Roxanne Warner

In terms of the global price mix, the 2 things to keep into consideration is, one, it does not only reflect the U.S. So the decline that you're seeing is also us reflecting the GCB bankruptcy reorganization impact. that Ludo just touched on from a mix standpoint. And then the second element is the element exactly that Marc and JC just touched on, which is the mix related to the replacement demand. And us just reflecting that in the overall price/mix number. The pricing itself is absolutely on track.

Eric Bosshard

Okay. Perfect. Great. And then secondly, the progress you've made on price and the additional price -- this is a North American retail question. In aggregate, it's like 15%, almost 20% price into North American retail, North American consumer. How are your thoughts about making that level stick? And does that have any impact on demand or mix? Or does that just basically flow through?.

Marc Bitzer

So Eric, again, specifically in North America, again, when we talk about these very big increase number. That always relates to January 2025. And as you saw last year, we already took some price, so year-over-year, it's a little bit less than since January overall. Having said that, and this is what you saw in Q3, I think, by and large, is sticking. And whenever we see certain elements where we are, of course, correct, we like the course correct, but by and large, is sticking.

I absolutely today do not see an impact on the overall category demand from a consumer perspective. Again, it's a replacement market. Consumers know -- have to replace a product, typically the awareness of a consumer going into a store up expected prices to limited. So by elasticity, if you want to say so, is very limited. Having said that, you do see sometimes that a consumer wants to just stick to a certain budget, i.e., consumer goes in the stores, I don't want to spend more than $600 on the top loader.

So what it basically means for us, it could be the consumer mix down on price point or 1 SKU from our perspective. And that's exactly what we're kind of trying to balance between what is the benefit of raising prices versus how much you lose on the mix side, I think over years, we've gotten a pretty good experience in how we fine-tune that, and that's what we do also going forward.

Juan Puente

I will ask Eric is our new product launches, and we described 2 of them in the presentation, but we've been talking about them throughout the different earnings release, that is supporting and enhancing our margin expansion and top line growth. So we will continue leveraging our product launches to be able to drive innovation, pricing and margin expansion.

Operator

Your next question comes from the line of Andrew Carter from Stifel.

W. Andrew Carter

I wanted to ask, and I know what I'm kind of thinking through on your actual pricing is kind of -- is difficult, but I think you would be probably from what you're saying at retail and what's flowing through somewhere in the kind of mid- to high single-digit range. Your organic growth in the fourth quarter -- our third quarter was down 8% in North America. That puts your kind of shipment volume whatever in the minus 12. I realize there's some mix in there.

That's probably unfavorable. But that compares to AHAM shipments down in the minus 3% range. So I guess, first off, like you said you were holding market share earlier. So how do those 2 square? And anything you can give us on POS, where you have visibility of your brands relative to the overall category?

Marc Bitzer

So Andrew, there's a very simple answer this one. Our market share this year is very steady throughout all 3 quarters. You had last year following our price [ goes ] you had in Q2 a very soft market share and in Q3, a much higher market share. So it's a pure baseline comparison. Actually, if I look at our market share Q1, Q2 and Q3, it is very, very stable, and I feel very good about it.

Having said that, we monitor our POS trends every week and see exactly what we need to be doing and what we don't need to be doing. But it's -- of course, we saw in the month of September and also October, the industry was soft. And of course, we see that also reflected in our POS trends. There's one big element, which I want to also add, which is a point of strength for us increasingly we typically have POS data from our big trade partners. But there's still a very significant independent retail all builders, and particularly in independent retail, where we actually have strengthened our position over last year. And that is a little bit richer from a mix perspective channel. It's not fully captured in POS data.

So I would say whatever we might lose on some POS accounts we have right now good compensating element on the independent retail.

W. Andrew Carter

Next question, I guess, in terms of -- you said at the top of the call, you wanted to expand margins in 2027. I guess, simply put, at this point, with the cost savings you have in hand, the kind of known inflation -- what kind of pricing do you have to execute next year? And could you do it -- could you hold margins in a flat volume environment with your savings, pricing, et cetera, next year?

Marc Bitzer

Yes. So Andrew, of course, we're not yet giving 2027 guidance. Having said that, our clear focus for Q4 and also for next year is margin expansion period. And we -- as some of you followed us a little bit longer. Every once in a while, every couple of years, we have a clear focus on margin expansion, and we tend to be doing what we talk about. And that is the #1 priority across the entire company. Of course, if you right now add up what we're doing in the structural cost increases. And if you add on top of that, the carryover pricing would feel very good against that objective.

But we all experiencing '26 the macro environment turned out very different than we assumed in January, okay? That's the reality. Not bad would like it, but that's reality. So as you would expect from us, we're kind of right now having plans on margin expansion which might go well beyond what we actually end up communicating. But again, that's a decision which we'll make in January once we see the year unfolding.

But from an underlying work, which has been done with structural cost takeout, and the pricing action, I think we set ourselves up for what I would call a very solid foundation for margin expansion.

So with that in mind, I think that was the last question. I'm not even sure I should repeat what I just commented, but again, it's -- I want to reiterate is, of course, '26 was full of challenges, and I'm not blaming external environment. We focus on what we can control, and that is cost takeout and pricing. You heard us talking quite a bit about it. We are, I would say, beginning to be cautiously optimistic about '27, but we also recognize we have work to be done and we're still living in a very volatile overall macro environment.

With that in mind, I want to thank you for listening to us and hope to talk to you sometime soon. Thanks a lot.