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Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are home equipment and furnishings and household and personal products.

Fortune Sector Leaders: Household Products

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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The home improvement manufacturing conglomerate operates 60 facilities in the U.S. and more than 20 in other parts of the world. Delta faucets and Behr paints are among its best-known brands.

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F500-2020-384-Masco

The Livonia, Mich.-based distributor of home improvement and building products also makes faucets, cabinets, coatings, and windows.

This year's Fortune 500 marks the 65th running of the list.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Masco Corporation manufactures and distributes home-improvement and building products. Its plumbing portfolio includes shower drains, sinks, accessories for kitchens and bathrooms, spas, exercise pools, and saunas. The decorative products segment includes paints, primers, and bath and cabinet hardware. Its products appear under several brand names, such as Delta, Brizo, and Behr, and are sold through wholesalers, e-commerce, and other outlets for contractors and homebuilders, plus direct to the consumer.

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Masco (MAS): Company Profile, Stock Price, News, Rankings

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Masco

masco

morning, ladies and gentlemen. Welcome to the Masco Corporation Second Quarter twenty twenty five Conference Call. My name is Marissa, and I will be your operator for today's call. As a reminder, today's conference call is being recorded for replay purposes. I will now turn the call over to Robin Zondervan, Vice President, Investor Relations and FP and A. You may begin.

Thank you, operator, and good morning, everyone. Welcome to Masco Corporation's twenty twenty five second quarter conference call. With me today are John Nudi, President and CEO of Masco and Rick Westenberg, Masco's Vice President and Chief Financial Officer. Our second quarter earnings release and the presentation slides are available on our website under Investor Relations. Following our remarks, we will open the call for analyst questions.

Please limit yourself to one question with one follow-up. If we can't take your question now, please call me directly at (313) 792-5500. Our statements today will include our views about our future performance, which constitute forward looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward looking statements. We describe these risks and uncertainties in our Risk Factors and other disclosures in our Form 10 ks and our Form 10 Q that we filed with the Securities and Exchange Commission.

Our statements will also include non GAAP financial metrics. Our references to operating profit and earnings per share will be as adjusted unless otherwise noted. We reconcile these adjusted metrics to GAAP in our earnings release and presentation slides, which are available on our website under Investor Relations. With that, I will now turn the call over to John.

Thank you, Robin. Good morning, everyone, and thank you for joining us. I want to start today by expressing my gratitude to all of our employees, customers, suppliers, and investors who've been so welcoming and supportive as I officially started my role as president and CEO of Masco as of the beginning of this month. I am humbled by the opportunity to lead such an outstanding company, and I intend to build on Masco's successful history of creating exceptional value for all of our stakeholders. During my two years serving on our Board of Directors, I came to deeply respect and admire this company.

I strongly believe in the power of our brands, the strength of our people and the opportunities ahead. I plan to use my first one hundred days to actively engage with internal and external stakeholders to hear their views on Masco, our industry, and further opportunities for our business. I already had the opportunity to kick off my listening tour, the headquarters of Delta Faucet and one of their manufacturing facilities. I returned from that trip energized by the team's passion, shared sense of ownership, and desire for growth. As I visit our other businesses over the next several weeks, I'm excited to work closely with our entire Masco team to continue to strengthen our portfolio of brands, enhance consumers' lives, drive profitable growth and deliver meaningful shareholder value.

Now let's turn to our second quarter performance. Please turn to Slide five. As I mentioned, I believe in the power of Masco's brands. During the quarter, our innovative products received several recognitions. Beginning with North America Plumbing, we are very pleased with Delta Faucet's performance in their newest product category of water filtration and a $1,200,000,000 market for under counter water filtration products.

Delta and Breezos award winning reverse osmosis systems are the most certified tankless systems based on leading competitors, National Sanitation Foundation certifications. These products are also the first reverse osmosis systems in the industry to earn the WaterSense certification label from the U. S. Environmental Protection Agency. In our international plumbing business, Hansgrohe continues to demonstrate their leadership in branding and design.

This quarter, Hansgrohe won four Red Dot Design Awards, including the Best of the Best Award for their Rain Dance Alive showering products. In our Decorative Architectural segment, Baer received the number one rating for interior paint from a leading independent third party rating agency for the twelfth year in a row. This year, we swept the top three spots with our Dynasty, Marquee and Ultra products. Two of Behr's Wood Stain products were also rated number one in the respective categories. These top ratings across multiple product categories show the depth and strength of products across our Behr brand.

Finally, Behr introduced ChatHue, an innovative AI tool designed to make choosing the perfect paint color even easier. I'm incredibly proud of the team at Behr for evolving the way we approach color selection, providing our consumers with a more personalized and enhanced experience. I'll now shift to discuss our second quarter results and outlook for 2025. Please turn to Slide six. We were very pleased with our operating performance in the second quarter, particularly as we navigated a dynamic geopolitical and macroeconomic environment.

We have worked diligently to address the impacts from additional tariffs through various mitigating actions, including cost savings initiatives, ongoing changes to our sourcing footprint and pricing where necessary. For the quarter, our net sales decreased 2%. However, in local currency and excluding the Kichler divestiture, sales were in line with the year prior. Gross margins increased 10 basis points to 37.7%. Operating profit grew $14,000,000 to $413,000,000 and operating profit margin increased 100 basis points to 20.1%.

Lastly, we delivered earnings per share growth of 8% in the quarter to $1.3 per share. Turning to our segments. Plumbing sales increased 4% in local currency. North American Plumbing sales increased 5% in local currency, driven by favorable pricing and volume. Delta Faucet continues to deliver strong performance through consumer driven demand for their innovative products and industry leading brands.

International plumbing sales increased 1% in local currency as we continue to see stability in many European markets, while other markets such as China remain challenged. Operating profit for the segment was $276,000,000 and operating margin increased 110 basis points to 21. Turning to our Decorative Architectural segment, sales decreased 12% in the quarter or 4% excluding our divestiture of Kichler. Overall, paint sales decreased mid single digits. DIY paint sales decreased high single digits.

Demand for DIY paint remains soft across the industry, driven by low existing home turnover and the dampened macroeconomic environment, and we expect this pressure to continue throughout the remainder of this year. In propane, sales increased mid single digits. Our strategic investments in this category and our close partnership with The Home Depot continue to result in growth with pro customers. The strength of our Behr brand and the quality of our products resonates with pro customers and allows us to capitalize on the sizable growth opportunity in the propane market. Operating profit for the segment was $157,000,000 and operating margin was 21.3%.

We are proud of the work of our teams across our business during the first half of the year as they mobilized quickly to implement various mitigation actions in response to increased tariffs, higher commodity costs and the macroeconomic uncertainty. Our teams were able to deliver strong financial results through focused execution and responding rapidly to the changing environment. Now turning to our expectations for the full year. While some uncertainty surrounding near term market conditions persist, we are restoring financial guidance for 2025. Rick will provide more detail into the components of our guidance.

However, given the overall macroeconomic environment, we now anticipate the global repair and remodel market to be down low single digits. We expect to continue to outperform the market. We anticipate our sales to be roughly flat, excluding the impacts of divestiture and currency, with lower volumes largely offset with pricing. Based on our expected operating performance and capital deployment actions, we anticipate adjusted earnings per share for 2025 to be in the range of $3.9 to $4.1 per share. It is important to note that the 2025 estimates we are providing today include the impact from an active tariffs that are currently in effect net of our various mitigation actions.

These estimates do not include impacts from any potential future tariffs or changes in existing tariffs. While some market uncertainty remains for the near term, the structural factors for repair and remodel activity over the mid to long term are strong, namely the growing age of the housing stock and home equity levels. Nearly 1,700,000 more homes will reach the prime remodeling ages of 20 to 39 years old by 2027. Homeowners are staying in their homes longer and home equity levels are near record highs. We continue to be focused on achieving additional growth, and we are structured to achieve favorable incremental benefits from volume growth due to our available capacity, high levels of productivity and disciplined cost structures.

We believe we are well positioned to grow faster than our competition to evolve and lead while remaining true to the values that have been foundational throughout our nearly one hundred year history. It is an absolute privilege for me to join such a high performing company, but on iconic brands are part of people's daily lives, and I'm honored to help write the next chapter. With that, I'll turn the call over to Rick to go over our second quarter results and our 2025 outlook in more detail. Rick?

Thank you, John, and good morning, everyone. Thank you for joining. As Robin mentioned, my comments today will focus on adjusted performance, excluding the impact of rationalization charges and other onetime items. Turning to Slide eight. Sales in the second quarter decreased 2%, but were in line with the prior year, excluding the impacts of our divestiture of Kichler and favorable currency.

Our divestiture of Kichler in the 2024 decreased sales by 3% year over year in the 2025, while currency represented a 1% increase in sales. In local currency, North American sales decreased 3% or were in line with the prior year, excluding the divestiture impact. International sales increased 1% in local currency. Gross margin increased 10 basis points in the quarter to 37.7%. SG and A decreased $27,000,000 driven by our divestiture and lower employee related expenses.

SG and A as a percent of sales improved 90 basis points to 17.6% in the quarter. Operating profit increased 4% to $413,000,000 in the quarter, and our margin expanded 100 basis points to 20.1%. Operating profit was driven by cost productivity initiatives, favorable SG and A and a positive price cost relationship, partially offset by lower volume. Lastly, our EPS increased 8% to $1.3 per share. Turning to Slide nine.

Plumbing sales increased 5% in the second quarter or 4% excluding the favorable impact of currency, largely driven by pricing, which increased sales by 3%. In local currency, North American Plumbing sales increased 5% in the quarter. This performance was primarily driven by Delta Faucet, which delivered strong growth in both the trade and e commerce channels. In local currency, international plumbing sales increased 1% driven by pricing actions. Hansgrohe achieved growth in many of its European markets, including its key market of Germany.

This was largely offset by softness in other markets, particularly China. Segment operating profit in the second quarter increased 11% to $276,000,000 and operating margin expanded 110 basis points to 21%. Operating performance was driven by cost savings initiatives and a favorable price cost relationship. Turning to Slide 10. Decorative Architectural sales decreased 12% in the second quarter.

The divestiture of Kichler reduced sales by 8%. In the quarter, total paint sales decreased mid single digits due to lower volume. Pro paint sales were up mid single digits and DIY paint sales decreased high single digits. Given the continued softness in the overall DIY market and the unfavorable impact of inventory timing this year versus 2024 as discussed on prior earnings calls, we anticipate our total paint sales for the full year to decrease mid single digits. We anticipate our full year DIY paint business to decrease high single digits.

In our Pro Paint business, we expect sales to increase mid single digits for the full year. Operating profit in the second quarter was $157,000,000 impacted by lower volume and an unfavorable price cost relationship, partially offset by cost savings initiatives. Operating profit margin was 21.3% and was favorably impacted by the divestiture of Kichler. Turning to Slide 11. Our balance sheet remains strong with gross debt to EBITDA at two times at quarter end.

We ended the quarter with $1,300,000,000 of liquidity, including cash and availability under our revolving credit facility. Working capital was 20.1 of sales at quarter end. Working capital was impacted by tariff related dynamics, including higher material costs and pricing, increasing our working capital balances. As a result of these tariff related impacts, we anticipate that our working capital as a percent of sales will be approximately 17.5 at year end. Given our strong cash generation, we returned $167,000,000 to shareholders in the second quarter through dividends and share repurchases, including the repurchase of $101,000,000 in stock.

As it relates to capital allocation, we expect to invest approximately $175,000,000 through capital expenditures to pay a dividend of $1.24 per share and currently anticipate deploying at least $450,000,000 towards share repurchases or acquisitions in 2025. Now let's turn to Slide 12 and review our outlook for the full year. The market environment remains volatile and uncertain, particularly related to tariffs. That said, there has been some improved visibility since our Q1 earnings. Based on this visibility, we are reinstating our 2025 guidance.

Please note that the guidance being provided today includes the impacts of currently enacted tariffs in effect in July. We estimate the total annualized cost impact of these incremental tariffs to be approximately $210,000,000 before mitigation, down from $675,000,000 as of our Q1 earnings call. Of the $210,000,000 annualized cost impact, approximately $140,000,000 relates to the incremental 30% China tariffs, while the remaining $70,000,000 is driven by the 10% global reciprocal tariffs and 50% tariff on steel and aluminum. Of this approximately $210,000,000 total annual cost, we expect a 2025 in year impact of approximately $140,000,000 before mitigation, with the impact largely occurring in the second half of the year. Our teams continue to actively work to mitigate these additional costs through a combination of levers.

These include cost reductions, continued efforts to change our sourcing footprint and pricing where necessary. We anticipate that these mitigation actions will largely offset the direct cost impacts of the currently enacted tariffs in 2025. It is important to note that our guidance does not attempt to estimate the impact of potential future tariffs, including on copper or any changes in existing tariffs. Turning to the overall market. Our expectation is that The U.

S. And international repair and remodel markets will decrease low single digits in 2025. For Masco, we expect our sales in 2025 to decrease low single digits, impacted by the 2024 divestiture of Kichler, which will reduce sales by approximately 2% year over year. We anticipate currency will have a favorable impact of approximately 1%, similar to the favorable impact experienced in the second quarter. Excluding the impacts of divestiture and currency, we anticipate Masco's overall sales to be roughly flat year over year, with lower volumes largely offset with pricing.

We will continue to invest in our business for future growth, while also maintaining cost discipline. As a result, we expect SG and A as a percent of sales to be in line with 2024. As always, we will take appropriate actions to address our costs as the year develops based on market conditions. We anticipate total company operating margin to be approximately 17% in 2025, including the impacts of tariffs and lower volume. As we think about our results in the first half of the year versus our expected second half performance, we anticipate there to be some headwinds in the second half, particularly as it relates to tariff costs and commodity inflation.

In addition, we experienced some favorability in certain cost items in the second quarter, such as lower employee related costs that are not expected to repeat in the second half of the year. Finally, as a reminder, fourth quarter sales will face a challenging year over year comparison due to the favorable inventory timing impact we experienced in our paint business in the fourth quarter of last year. In our Plumbing segment, we expect 2025 full year sales to be up low single digits. We anticipate the full year Plumbing margin will be approximately 18.5%. In our Decorative Architectural segment, we expect 2025 sales to decrease low double digits or mid single digits excluding the impacts of our divestiture.

We anticipate the full year Decorative Architectural margin to be approximately 18%. Finally, as John mentioned earlier, our 2025 EPS estimate is $3.9 to $4.1 per share. This assumes a $211,000,000 average diluted share count for the year and a 24.5% effective tax rate, which is consistent with our 2024 effective tax rate. With that, I would like to open up the call for questions. Operator?

Thank And the first question comes from John Lovallo with UBS. Please go ahead.

Good morning, guys. Thanks for taking my questions. The first one is on the expectation to allocate $450,000,000 to repos and acquisitions. I guess maybe two parts here. One, I mean, you expect any acquisitions to be pretty close to core?

In other words, not adding an additional leg. And then more importantly, I mean, what does the landscape look like out there? And would you expect the majority of this $450,000,000 to be allocated to share repos this year?

Hi, John. It's, John Nudi. Maybe I'll take the first part of the question. I'll let Rick, give a little bit more color as well. We feel really good about where we are from a portfolio standpoint.

Keith and the management team over the last decade have done a terrific job really being focused on, you know, r and r, low ticket items, and we really like where we play today. So I would say m and a is gonna be bolt on in nature. We'll stay committed to the strategy that we have in place. As you know, I've been on the board for the last couple of years. So myself and the rest of the board have been actively involved in the strategy to get a believe in it. Maybe over to Rick for little bit more detail.

Yeah. John, with regards to the $4.50 estimate for the year, we've we've repurchased about 230,000,000 of shares through the first half of the year. And absent any m and a transaction, you'd expect us to deploy the remaining amount to share repurchases.

Okay. Yeah. That's really helpful. And then in terms of propane, it's been growing really nicely. It's sort of mid single digits each quarter over, I think, the past five quarters.

I mean, how are you sort of thinking about the sustainability of the of this growth as we move through the back half of this year and into next year?

Hey, John. Our our propane business has grown nicely, between 2020 and 2024. It's grown 70%, and obviously taking share, through that period. We think there's a lot more room to run. As you know, our our partner, the Home Depot, is very focused on the pro.

We're very committed to working with them and putting strategies in place to continue to grow into the future. So we think it can continue to grow at an outsized rate for us as we move into the future.

Your next question comes from Stephen King with Evercore ISI. Please go ahead.

Yes. Thanks very much, guys. Appreciate it. Yes, obviously strong results here, particularly domestically. And I guess in the Plumbing business, in particular, was curious if you felt like there was maybe any pre buy activity, maybe ahead of some anticipated price increases.

I think you said e commerce was strong. Maybe you could give us a sense for did you see what you might consider to be some element of prebuy, you know, in some of your channels?

Yeah. Good morning, Steven. It's Rick. So we we did see a little bit of of prebuy really on the plumbing side. It wasn't significant, so we didn't call it out in our prepared remarks.

But we did see a bit on the plumbing side as it pertains to getting ahead a little bit of the tariff prices. But I would say from an overall channel inventory standpoint, channel inventories are are reasonably healthy, really, across the the plumbing segment. So for this time of year, everything looks pretty pretty normal.

Right. And I'd like to expand our our our business is really, you know, firing at all cylinders right now. We really like our our brand building. We like the innovation that they're putting to the market. We know they're growing share overall, and they're growing quite a bit of share when it comes to ecommerce. So really like the performance of our our biggest plumbing business in in North America.

Encouraging. Appreciate that. Wanted to switch gears to Paint, and particularly DIY. I think you've done a good job laying out the dynamics between DIY and Pro. So my question is a little bit of a broader one.

I'm curious about the handoff from baby boomers to millennials. I think you said in the past that the as baby boomers sort of age out of the DIY kind of age bracket that the backfilling by millennials isn't quite sufficient to take up the slack. And so I was wondering if you could expound on that. In particular, do you have any data or any research which suggests how millennial paint consumption looks compared to baby boomers when they were at a similar age? I'm thinking particularly on a gallons basis.

I was curious if you have any insight into that.

Steven, this is John. We we won't get into that specific data right now. We can continue to look and talk about as we move forward. I think the bigger thing that's affecting DIY right now is really existing home sales, which we know is highly correlated to DIY sales. And if you look at existing home sales, they're down dramatically certainly during the COVID period.

They're down pretty significantly since the pre COVID period as well. In fact, existing home sales are at a three decade low right now. So we would say that's the major driver of the softness in DIY. And as consumer confidence improves, as interest rates get a bit better, we'd expect that to pick up. Continue to look hard at, you know, millennials.

They're they're forming households now, and their behaviors are are certainly different than other generations. At the same time, we are seeing DIY behaviors being exhibited by them. We'll continue to look at that. We can continue to talk about that as we move into the future as well.

Your next question comes from Anthony Pettinari with Citi. Please go ahead.

In Plumbing, given some of the consumer trends that you called out, I'm wondering how the brands are performing between good, better, best, so Peerless, Delta, BRISO. And then for the full year sales guidance of up low single digits, I'm sorry if I missed this, but in terms of price versus volume, what would you expect that would break out as?

Yes. So, Anthony, this is John. I'll take the first part and turn it over to Rick for the second part. We we really like the performance of our brands. When we look at what's holding up best, it's really our upper premium and luxury brands that consumer continues to spend and continues to invest in remodeling.

I would say some of our our mid tier brands, we're seeing a bit of trade down, but nothing overly concerning But our luxury brands and our upper premium is really performing quite strong quite strongly right now. Turn over to Rick for the second part.

Yeah. Sure, Anthony. With regards to our our expectations on sales in the plumbing segment, so we we had we we indicated in our guidance that we would expect plumbing sales to be up low single digits. The composition of that is really pricing partially offset by lower volume. So we do expect a bit lower volume as we as we move through the course of the year, but more than offset by by pricing.

Okay. That that's helpful. I'll turn it over.

Your next question comes from Michael Rao with JPMorgan. Please go ahead.

Thanks. Good morning, everyone. Thanks for taking my questions. Wanted to first try and dive in a little bit to your demand trends during the second quarter. You know, we've heard so far this earning season from, you know, other companies that there's been some disruption, more on the inventory and, retail side as opposed to the end user perhaps.

But would love to get a sense across both Plumbing and Decorative, how that progressed throughout the quarter, you know, if there were any kind of unusual movements, know, from a channel perspective or from an end customer perspective?

Yes. So, Mike, this is John. I would say, in plumbing, we didn't see anything all that unusual. Rick mentioned earlier, again, we've seen with with tariffs and pricing, maybe a little bit of pull forward, but nothing too concerning. And, again, across our different channels, we have seasonal movements and other things, but nothing a surprise there.

In paint, it's really the dynamic between DIY and pro. And, again, our our DIY business is soft. I think that's consistent across the rest of industry. We believe that we are holding share in DIY. At the same time, pro is growing nicely for us, and we believe that we absolutely are taking share.

We think there's a lot more room to run there. Again, if you look at our over overall share levels in pro, you know, they're much lower than they are in DIY. So, again, that's an area that we believe that we can continue to focus on with our retail partner in the Home Depot and continue to get some nice sized gains as we move forward.

Great. Thanks for that. Secondly, on the mitigation actions against the tariffs, was wondering if you can give a little more detail there in terms of maybe unpacking how those actions would fall out if you think about the $140,000,000, how that would roughly be offset between supply chain cost control and price? And if it would be kind of evenly matched in 3Q or 4Q or if there'd be a kind of a greater hit in 3Q maybe before some of the actions fully come to bear? And if I could just throw in a small third question, if you're able to quantify the second quarter non repeating cost benefits that help the margins, you know, in in 2Q, that'd be helpful as well. Thanks.

Yeah. Sure, Mike. It's Rick. I'll answer your third question first. With regards to the the cost benefits that we experienced in q two, so our just to dimension it, our s g and a cost were down favorably about $27,000,000.

About half of that related to the divestiture of Kichler. So the the the those costs going away. And then the other half of that, roughly speaking, was favorable cost performance. Some timing, but mostly favorable items that we don't expect to repeat in the second half of the year. So, hopefully, that dimensions the magnitude of the favorability we saw in cost in q two.

As it pertains to your your second question on on the tariff cadence and the mitigation actions, what we've said is with regards and it's important to note that we are talking about currently enacted tariffs. So not tariffs that are, you know, may or or expected to go into effect here in August, but tariffs that are in effect here in July are in your impact of those tariffs is approximately 140,000,000 and largely in the second half of the year. In terms of our mitigation, we really are pulling on all three levers. And there's many other elements to our mitigation activity, but the three main levers are pricing, cost, reductions, and sourcing footprint. Really, the the drivers of the mitigation this year are gonna be the the cost reduction and pricing activities.

As we mentioned before, the resourcing activity that we've been doing, primarily moving imports from China to other markets, is going to be something that we've accelerated, and we continue to build on momentum in that regard. But that's largely gonna be a 2026, mitigation, impact. But we're not gonna get into the the the dimension or the split between pricing costs. Suffice it to say that they're both significant contributors in terms of our mitigation. I think in terms of cadence during the course of the year, again, mostly largely in the second half of the year, in terms of tariff impact as well as as well as our mitigation activities.

I think the one thing to note, that we will highlight, it wasn't mentioned in the in the prepared remarks is, as you may recall, well, first of all, China tariffs, as we all know, are are currently sitting at an incremental 30%. But as you recall, for about a month period of time from about April 10 to May 12, there was incremental tariffs of a 145% imposed on imports from China. Although we did manage, our import activity during that window of time, we did still import products into The US during that window of time, and we're, impacted by the increased tariffs at a 145%. That really is flowing through our inventory, and that will be an impact that we'll experience in the first half of the second half of the year, so really on a q three basis. So that's the one kind of timing element that I would call out.

Your next question comes from Matthew Bouley with Barclays. Please go ahead.

Good morning, everyone. Thanks for taking the question. Welcome, John, to the call. Questions for you. You know, obviously, you've only been in the seat here for, just a few weeks.

But curious, you know, as you've kinda, you know, delved deeper into the company, obviously, you're not new to the company having been previously on the board. But as you've delved deeper, as you've spoken to the board under the new role, any any just kinda high level thoughts on your early priorities? You know, what what might you've looked to kinda tweak from a strategic perspective? And, you know, what might be some of the goals and and and, I guess, milestones we can look for from you. Thank you.

Yep. You're welcome. Absolutely. So, you know, I am spending my first hundred days just really listening and learning. I've been active in getting out with our teams.

I I was, again, with our Delta team. I'm heading to Germany next week. I'll be on the West Coast with the Baron Watkins team the week after that. Spent time with customers. I I really value that.

I've been met all of our major customers and and some of them twice since I was announced, and we'll continue to focus on that. And and what I see and what I continue to hear is that Masco is an incredibly strong company. And, again, I knew that being on the board and coming in with teams that really know our business, know how to innovate. We have strong brands, which is great. And our strategy, think, is is spot on with repair, remodel, and low ticket items.

I think the one thing, and and this won't surprise anyone likely, is that we we would like to grow a bit faster on top line standpoint and to do that profitably. So that's what I'm really focused on is understanding what are some levers for us to continue to drive, you know, strong margins and profit like we have historically, and at the same time accelerate our top line. And some of the opportunities we're talking about internally are leveraging digital bit more aggressively in things like ecommerce and digital marketing and even strategic revenue management. But, again, it's early days, but just know that that is the area that I will be focused on with the rest of the team to continue to do all the great things that we do here at Masco. We'll probably do it with a bit more top line and and profitable top line at that.

Excellent. Great. Well, we'll we'll certainly look forward to the the news on that front. Second question, guess, for Rick. You know, you had mentioned that this is on the tariffs, of course.

So the you know, you're you're not including what may change from a tariff perspective in August, perhaps even tomorrow. So if I'm thinking about Vietnam, perhaps even the copper announcement yesterday. I'm not sure if what you source from a brass components perspective would or would not be included in that. So we just kinda love to hear your thoughts on as some of these things go into effect, any potential framework, dollar framework you can give us, and and how you would be thinking about mitigating those those, you know, new tariffs coming. Thank you.

Yeah. Sure, Matt. And and appreciate the question. Obviously, it's a very dynamic environment. Remains uncertain as as you mentioned.

There was a proclamation yesterday as it pertains to the $2.32 tariffs on copper that are effective August 1. What I would say is we're pretty focused on providing our outlook and guidance based off of tariffs that are in place and enacted, and that informed us with regards to our guidance that we shared here this morning. As it pertains to dimensioning the future tariffs, whether that's copper or in in the case of of other countries, the reciprocal tariffs changing, you know, it's premature for us to really dimension that. Obviously, we've run different scenarios and and and the like internally. But as it pertains to to influencing our outlook, at the end of the day, it really will depend on what the ultimate rates are, the timing of those, and some of the specific regulations.

So with regards to copper, we know the timing and the rate, but we don't know the composition and the HTS code. So it's premature for us to estimate what the impact is for Masco specifically. It does impact our our sourcing. It will also have an impact on commodities. As you've seen lately, the commodity costs have been fairly volatile.

So at this point, you know, it would be, premature for us to to to share estimates just because we don't have full visibility in terms of the implications of where they may settle. That said, as we've demonstrated in the past, we'll be transparent, with regards to what those impacts are once they're once they're known and we provide an updated outlook. We'll update the, the street as it pertains to those impacts, again, when we have have those, those known and and we provide an updated outlook.

Alright. Understood. Thanks again, and good luck, guys.

Your next question comes from Sam Reid with Wells Fargo. Please go ahead.

Awesome. Thanks so much. John, also welcome aboard. I believe you took anywhere from, I want to say, a 7% to 9% price in May in plumbing based on, the letter you sent out to some of your customers, if

I was reading it correctly. Just wanted to talk through the reception on that price, perhaps by channel. Give us a sense as to what realization on that pricing could look like, especially as we move into the second half. And then, you know, just digging a little bit deeper, it does sound like plumbing volumes are gonna slow a little bit in the second half, if I'm listening to your commentary correctly. Is that just a function of elasticity, or are you embedding something, you know, kind of more market specific like a slowdown? Just wanna unpack those dynamics.

Hey, Sam. It's Rick. With regards to pricing actions, we're not gonna disclose specific pricing actions, certainly not by channel. You know, we we'll we provided an outlook as as it pertains to pricing impacts on plumbing segment overall, and we indicated it was a low single digit 3% benefit here in q two, and we're expecting a mid single digit benefit for the full year. And so you can kinda read into that what you can as it pertains to the the magnitude of the pricing.

Mean, it continues to be something that we continue to to look at. And it's really something that we work with our channel partners on in addition to our our cost in in sourcing mitigation actions. As it pertains to Yeah.

Masco (MAS) Q2 2025 Earnings Call Transcript

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