Masco Corporation

Masco reported third-quarter net sales up 3%, or 4% excluding the Bristan divestiture and unfavorable currency. Operating profit was $351 million, up 13%, with operating margin of 17.9% (up 160 basis points). Gross margin improved 250 basis points to 37.1%, and EPS increased 23% to $1.19 per share. In Plumbing, sales rose 4% and operating profit increased 25% to $256 million, with margin at 19.1%; in Decorative Architectural, sales were flat and operating profit was roughly flat at $126 million, with margin at 20.1%. For 2026, Masco now expects sales to increase low single digits, operating margin to be 18% to 18.5%, and EPS to be $4.65 to $4.75, versus prior EPS guidance of $4.40 to $4.60. Segment outlooks: Plumbing sales are still expected to rise low single digits, now toward the high end, with operating margin around 20%; Decorative Architectural sales are expected to be roughly flat and operating margin around 19.5%.

Jon Nudi said the quarter reflected disciplined execution and resilience despite a difficult macro backdrop. He framed the strategy as above-market growth through brand investment, commercial capability building, and operational excellence, and highlighted progress in digital, AI, and customer partnerships. He also pointed to share gains, strong brand positions, and long-term repair-and-remodel fundamentals as reasons for confidence.

Rick Westenberg focused on the financial drivers behind the quarter: gross margin up to 37.1%, SG&A at 19.2% of sales, and operating profit aided by pricing actions, cost savings, and lower year-over-year tariff costs, partly offset by higher commodity and employee-related costs. He said the balance sheet remains strong, with gross debt-to-EBITDA at 2.1x, liquidity of $1.6 billion, and working capital at 18.8% of sales, with a year-end target of about 16.5%. He also noted $322 million returned to shareholders in the quarter, over $850 million of share repurchases year-to-date, and an expectation to deploy about $1 billion toward buybacks or acquisitions in 2026.

Analysts pressed on whether tariff-refund-related investments had started to show benefits; management said the investments are still early and will play out over several quarters. Several questions focused on the Q4 slowdown in earnings and the impact of rising input costs, freight, and higher employee-related expenses; Rick said Q4 is seasonally weaker, margins should be roughly in line year over year, and mid-single-digit input inflation is still expected. On pricing, management said price/cost should remain modestly positive in Plumbing and roughly neutral in Decorative, while emphasizing that pricing is the last lever they pull after cost actions and efficiency efforts.