Whirlpool (WHR) Up 8% in 6 Months: Will the Momentum Prevail?
Whirlpool Corporation WHR currently remains a mixed bag as its cost-containment efforts and margin expansion in North America are poised to drive growth, while high costs and softness in the Latin America and EMEA segments remain concerns. Also, it is benefiting from its robust product pipeline and solid innovations.In the past six months, shares of this Zacks Rank #3 (Hold) company have increased 7.7% outperforming the industry’s growth of 5.5%.Moreover, the company remains confident to accomplish long-term financial targets. This marked eighth straight quarter of margin growth for the North America segment.Looking ahead, the company expects to continue delivering strong results for the region, driven by favorable price/mix and price increase along with improvement in the demand environment in the United States. Consequently, the segment reported an operating profit of $9 million, down 30.8% from the year-ago period.Operating margin also contracted 140 bps in the reported quarter, as gains from rise in volume, lower raw material inflation and cost-reduction efforts were more than offset by higher brand transition investments in China. Although management reaffirmed margin guidance for Asia at 3% for 2019, higher spending toward brand transition in China might continue to pressurize margins and hurt profitability.Nevertheless, we expect all aforementioned growth drivers to offset these hurdles and help Whirlpool to sustain its solid momentum.Key PicksBoot Barn Holdings BOOT has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy).