Whirlpool (WHR, Financial) shares plummeted 19% as the company approaches its lowest levels of 2025. This drop follows disappointing Q4 revenue figures and a bleak FY25 forecast, with earnings and sales falling below consensus. The appliance maker struggles with persistent macroeconomic challenges, such as inflation and high interest rates, affecting the housing market and consumer sentiment. Q4 revenue declined 18.7% year-over-year to $4.14 billion.

To address these challenges, Whirlpool (WHR, Financial) is focused on cost reduction. In FY24, the company implemented initiatives saving approximately $300 million, increasing ongoing EBIT margins by 170 basis points sequentially, and raising FY24's ongoing EPS to $12.21, surpassing its $12.00 forecast.

Looking ahead to 2025, WHR plans further cost improvements to combat the $2.5 billion cost inflation from 2021 and 2022. The company has already cut around $800 million in net costs and aims for an additional $200 million in savings through simplification and manufacturing efficiencies.

Despite these efforts, without a significant change in the housing market, WHR's cost-saving measures may not sustain bottom-line growth in FY25. The company expects adjusted EPS to drop 18% year-over-year to about $10.00, well below analyst predictions. Revenue is forecasted to decrease by 5% to approximately $15.8 billion due to ongoing macroeconomic headwinds.

WHR anticipates global industry volumes to remain flat in 2025, with no sudden improvements in sight. North America's elevated mortgage rates are likely to weaken home sales, while Latin America may see a modest 3% improvement. Asia is expected to accelerate with volume growth of 3-5%.

In a strategic move, WHR will reduce its stake in Whirlpool of India from 51% to 20%, generating $550-600 million in net cash. This cash will be used to reduce debt by $700 million in 2025, improving net debt leverage to about 3.4x.

WHR has faced significant macroeconomic headwinds, impacting demand for homes and discretionary purchases. While replacement demand provides a stable foundation for industry volumes, the near-term outlook remains uncertain. The Federal Reserve's indication of prolonged high interest rates adds to this uncertainty. WHR's 6.5% dividend could be at risk unless demand improves. Management plans to review dividend funding to ensure alignment with long-term goals, but this statement has added selling pressure on the stock.