Masco (MAS) FY 2025 Annual General Meeting May 09, 2025 08:30 AM ET Speaker0 Good morning, and welcome to Masco's twenty twenty five Annual Meeting of Stockholders. I would like to introduce Ms. Lisa Payne, Masco's Chair of the Board. Speaker1 Thank you, and good morning. I'm pleased to welcome you to Masco's Annual Meeting. At today's meeting, we'll address six matters for stockholder consideration and respond to any questions about these matters in accordance with the meeting's rules of conduct that have ...

Group 1 - The article recommends a buy rating for Masco Corp. (MAS) based on expectations of a favorable macroeconomic environment in FY24 that should drive demand recovery [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets rather than just low multiples [1] - There is a recognition of the risks involved in investing in successful companies, particularly the potential to overpay, highlighting the importance of valuation [1] Group 2 - The article expresses a belief that in certain situations, the potential for growth can outweigh immediate price concerns [1]

Core Viewpoint - Masco Corporation reported weaker-than-expected earnings for the first quarter, missing both earnings per share and sales estimates due to macroeconomic uncertainties and tariffs [1][2]. Financial Performance - The company posted quarterly earnings of $0.87 per share, below the analyst consensus estimate of $0.92 per share [1]. - Quarterly sales amounted to $1.80 billion, missing the analyst consensus estimate of $1.84 billion [1]. - The adjusted operating profit margin was reported at 16.0 percent [2]. Shareholder Returns - Masco returned $196 million to shareholders through dividends and share repurchases during the first quarter [2]. Market Reaction - Following the earnings announcement, Masco shares gained 1.3%, trading at $60.08 [2]. Analyst Ratings and Price Targets - Baird analyst Timothy Wojs maintained an Outperform rating, lowering the price target from $72 to $70 [7]. - Evercore ISI Group analyst Stephen Kim maintained an In-Line rating, lowering the price target from $82 to $71 [7]. - Truist Securities analyst Keith Hughes maintained a Buy rating, lowering the price target from $92 to $75 [7]. - UBS analyst John Lovallo maintained a Buy rating, lowering the price target from $91 to $80 [7]. - Goldman Sachs analyst Susan Maklari maintained a Buy rating, lowering the price target from $82 to $73 [7]. - RBC Capital analyst Mike Dahl maintained a Sector Perform rating, cutting the price target from $74 to $62 [7].

Safe Harbor Statement This presentation contains statements that reflect our views about our future performance and constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "outlook," "believe," "anticipate," "appear," "may," "will," "should," "intend," "plan," "estimate," "expect," "assume," "seek," "forecast," and similar references to future periods. Our views about future performance involve risks an ...

Financial Data and Key Metrics Changes - In Q1 2025, the company's top line decreased by 6%, with a 3% decrease when excluding the divestiture of Kichler and unfavorable currency impacts [20][30] - Gross margins increased by 20 basis points to 35.9%, while operating profit was $288 million, resulting in an operating profit margin of 16% [20][32] - Earnings per share for the quarter was $0.87 [20][32] Business Line Data and Key Metrics Changes - Plumbing sales increased by 1% in local currency, with North American plumbing sales also up by 1%, driven by higher volumes in the spa and sauna business [21][33] - Decorative Architectural segment sales decreased by 16%, or 8% excluding the Kichler divestiture, with overall paint sales down high single digits [22][36] - Operating profit for the plumbing segment was $219 million, with an operating margin of 18.5%, while the Decorative Architectural segment had an operating profit of $96 million and an operating margin of 15.6% [22][23] Market Data and Key Metrics Changes - International plumbing sales were flat in local currency, with growth in Europe offset by softness in other markets, particularly China [21][34] - The company noted ongoing demand pressure in the DIY paint market due to a dampened macroeconomic environment, while pro paint sales were up mid-single digits [24][56] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through pricing actions, cost savings initiatives, and changes to its sourcing footprint [11][42] - The management emphasized the importance of maintaining core strengths, including market-leading brands and innovative product portfolios, amidst geopolitical and macroeconomic changes [15][26] - The company plans to invest approximately $175 million in capital expenditures and return $196 million to shareholders through dividends and share repurchases [39] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the impact of tariffs on demand trends and decided not to provide full-year financial guidance for 2025 [12][25] - The company anticipates a potential softening of demand in the near term but remains confident in its ability to navigate challenges due to its experienced teams and strategic initiatives [15][26] - Management highlighted the resilience of the repair and remodel industry and the strength of its product portfolio [26][41] Other Important Information - The company is undergoing a leadership transition, with Keith Allman retiring and John Nooty appointed as the new President and CEO [8][10] - The company has successfully reduced its tariff import exposure to China by approximately 45% since 2018 [110] Q&A Session Summary Question: Top-line trends and April performance - Management noted strong performance in e-commerce and international plumbing, with some softening in the retail channel and DIY paint market [52][54] Question: Mitigation efforts on tariffs - Management confirmed that pricing and cost reduction are the primary mitigation actions, with ongoing efforts to adjust sourcing [61][62] Question: DIY paint market performance - Management indicated that the DIY paint market is experiencing softness due to consumer price sensitivity and a demographic shift towards professional painting services [75][76] Question: New build channel strategy - Management clarified that the focus remains on repair and remodel, with selective engagement in new builds based on value and innovation [96] Question: Brand performance across different segments - Management reported strong performance in e-commerce and international plumbing, with some pressure in retail and DIY paint areas [101][102] Question: Sourcing strategy and tariff impacts - Management discussed ongoing efforts to diversify sourcing and reduce exposure to China, while monitoring market conditions closely [110][114]

Company Performance - Masco Corporation (MAS) reported adjusted earnings per share (EPS) of 87 cents, missing the Zacks Consensus Estimate of 92 cents by 5.4%, and down from 93 cents in the prior-year quarter [4] - Net sales were $1.8 billion, falling short of the consensus mark of $1.84 billion by 1.9% and declining 6% year over year; excluding divestitures, net sales decreased 3% in local currency [4] - The adjusted operating margin contracted 60 basis points year over year to 18.5%, with adjusted EBITDA at $245 million compared to $255 million in the prior-year quarter [7] Segment Analysis - Plumbing Products segment net sales declined 1% year over year to $1.18 billion, with North American sales up 2% and international sales flat in local currency [6] - Decorative Architectural Products segment reported sales of $617 million, down 16% from the prior-year period; total paint sales decreased in mid-single digits, while PRO paint sales increased in the mid-single digits [8] Financial Position - As of March 31, 2025, Masco had total liquidity of $1.246 billion, down from $1.31 billion a year earlier, with cash and cash investments of $377 million and long-term debt of $2.95 billion [13] - The company repurchased 1.8 million shares for about $130 million and returned $66 million to shareholders in dividends during the reported period [13] Market Environment - The disappointing performance is attributed to a challenging macroeconomic and geopolitical environment, including new tariffs; Masco is implementing pricing adjustments and cost-saving initiatives to address rising cost pressures [2] - Management has refrained from providing full-year 2025 financial guidance due to ongoing uncertainty regarding external developments affecting industry demand and pricing dynamics [3]

Core Insights - Masco (MAS) reported $1.8 billion in revenue for Q1 2025, a year-over-year decline of 6.5% and below the Zacks Consensus Estimate of $1.84 billion, resulting in a surprise of -1.91% [1] - The company's EPS for the quarter was $0.87, down from $0.93 a year ago, with an EPS surprise of -5.43% compared to the consensus estimate of $0.92 [1] Financial Performance Metrics - Decorative Architectural Products net sales were $617 million, below the estimated $665.29 million, reflecting a -15.9% change year-over-year [4] - Plumbing Products net sales were $1.19 billion, slightly above the estimated $1.18 billion, with a year-over-year decline of -0.6% [4] - Adjusted operating profit for Plumbing Products was $219 million, close to the estimated $220.91 million, while for Decorative Architectural Products it was $96 million, below the estimated $117.35 million [4] - Reported operating profit for Plumbing Products was $217 million, compared to the estimated $229.70 million, and for Decorative Architectural Products it was $96 million, below the estimated $123.89 million [4] Stock Performance - Masco's shares have returned -12.7% over the past month, underperforming the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Masco (MAS) reported quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $0.92 per share, and down from $0.93 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -5.43%, with the company previously expected to post earnings of $0.88 per share but actually producing $0.89, resulting in a surprise of 1.14% [2] - Masco's revenues for the quarter were $1.8 billion, missing the Zacks Consensus Estimate by 1.91%, and down from $1.93 billion year-over-year [3] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2][3] Stock Performance - Masco shares have declined approximately 15.4% since the beginning of the year, compared to a decline of 10.1% for the S&P 500 [4] - The current Zacks Rank for Masco is 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.22 on revenues of $2.03 billion, and for the current fiscal year, it is $4.25 on revenues of $7.7 billion [8] - The estimate revisions trend for Masco is currently unfavorable, which could change following the recent earnings report [7] Industry Context - The Building Products - Miscellaneous industry, to which Masco belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [9]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 1-5794 Masco Corporation (Exact name of Registrant as Specified in its Charter) Delaware 38-1794485 (I.R.S. Employer I ...

Exhibit 99 2025 First Quarter Results "During the first quarter, we delivered solid adjusted operating profit margin of 16.0 percent and adjusted earnings per share of $0.87, and we returned $196 million to shareholders through dividends and share repurchases," said Masco President and CEO, Keith Allman. "We also experienced significant changes in the geopolitical and macroeconomic environment, including the enactment of new and broad-reaching tariffs. Our experienced teams are actively taking steps in an e ...