Core Points - Mohawk Industries reported Q2 2025 net earnings of $147 million, with an EPS of $2.34, and adjusted net earnings of $173 million, with an adjusted EPS of $2.77 [1][2] - The company's net sales for Q2 2025 were $2.8 billion, showing a slight year-over-year decline of 0.8% when adjusted for constant working days and exchange rates [1][2] - For the first half of 2025, net sales totaled $5.3 billion, reflecting a 2.8% decrease year-over-year [2] Financial Performance - Q2 2025 gross profit was $714.4 million, down from $723.8 million in Q2 2024, with a gross profit margin of 25.5% [9][23] - Operating income for Q2 2025 was $188.7 million, compared to $214 million in Q2 2024, resulting in an operating margin of 6.7% [9][26] - Free cash flow for Q2 2025 was approximately $126.1 million, with capital expenditures of $80.2 million [11] Strategic Initiatives - The company is focusing on operational optimization, cost control, and market expansion to improve performance amid challenging market conditions [3][5] - Mohawk has initiated a restructuring plan aimed at achieving approximately $100 million in savings, which includes closing high-cost operations and optimizing distribution channels [3][5] - The company has also approved a new share repurchase program worth $500 million [3] Market Conditions - The industry is facing ongoing price pressures due to declining market sales and rising input costs, which are expected to peak in Q3 2025 [5] - Mohawk is adapting to increasing tariffs by emphasizing local production and adjusting pricing strategies [4][5] - The global ceramic business segment reported a 0.5% year-over-year increase in net sales, while the North American flooring segment saw a 1.2% decline [4][15] Future Outlook - The company anticipates that adjusted EPS for Q3 2025 will be between $2.56 and $2.66, excluding restructuring and other one-time costs [5] - Historical trends suggest that the industry may experience several years of sales growth following a downturn, and Mohawk is positioned to capitalize on this potential recovery [6]

Core Viewpoint - Mohawk Industries, Inc. reported second-quarter 2025 results with earnings and net sales exceeding Zacks Consensus Estimate, although the top line remained flat year-over-year and the bottom line decreased [1][10]. Financial Performance - Adjusted earnings per share (EPS) were $2.77, beating the Zacks Consensus Estimate of $2.62 by 5.7%, while the previous year's adjusted EPS was $3 [5]. - Net sales reached $2.8 billion, surpassing the consensus estimate of $2.79 billion by 0.4%, but remained flat year-over-year, with an adjusted decline of 0.8% [5]. - Adjusted gross margin contracted by 70 basis points to 26.4%, and adjusted operating margin decreased by 120 basis points to 8% [6]. Segment Performance - Global Ceramic segment sales totaled $1.12 billion, up 0.5% year-over-year, with adjusted operating income decreasing to $90.3 million [7]. - Flooring North America segment net sales were $946.8 million, down 1.2% year-over-year, with adjusted operating profit declining to $69.2 million [8]. - Flooring Rest of the World segment net sales increased by 1% year-over-year to $734.4 million, but adjusted operating income fell to $76.4 million [9]. Operational Strategies - The company is focusing on cost control, operational efficiency, and market development to navigate industry challenges, including inflation and weak consumer confidence [12]. - Mohawk is implementing productivity measures and restructuring efforts expected to yield about $100 million in savings this year [14]. - The company is enhancing its product mix with premium offerings and improving supply chain processes to offset pricing pressures [3][13]. Future Outlook - For Q3, Mohawk expects adjusted EPS in the range of $2.56-$2.66, compared to the previous year's figure of $2.9, not accounting for potential new tariffs [15].

Financial Data and Key Metrics Changes - Net sales for the second quarter were $2.8 billion, essentially flat compared to the prior year [6][14] - Adjusted earnings per share for the quarter were $2.77, reflecting strong productivity and restructuring actions [6][14] - Gross margin for the quarter was 25.5%, a decrease of approximately 70 basis points year-over-year due to higher input costs [14][16] - Free cash flow generated during the quarter was approximately $125 million [7][19] Business Line Data and Key Metrics Changes - Global Ceramic segment sales exceeded $1.1 billion, a 0.5% increase as reported, benefiting from new product introductions [16][17] - Flooring North America had sales of $947 million, a 1.2% decrease primarily due to lower volumes in soft surfaces [18] - Flooring Rest of the World reported sales of $734 million, a 1% increase as reported, but a 3% decrease on a constant basis due to pricing pressure [18][19] Market Data and Key Metrics Changes - U.S. housing inventory has risen to its highest level since February 2007, impacting sales of new and existing homes [9][10] - The architectural billing index in the U.S. is forecasting slowing conditions, indicating potential challenges ahead [8][10] - European housing markets are experiencing a shortage of units and affordability issues, although lower interest rates may stimulate sales [11][12] Company Strategy and Development Direction - The company is focusing on operational improvements, cost containment, and market development initiatives to navigate challenging market conditions [6][7] - Restructuring actions are on schedule, expected to deliver approximately $100 million in annual cost savings [7][15] - The company is emphasizing locally produced collections to mitigate the impact of tariffs and enhance its competitive position [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that ongoing inflation and low consumer confidence are constraining industry sales, with the timing of recovery remaining unpredictable [31][32] - The company expects input cost pressures to peak in the third quarter, with potential improvements in the fourth quarter as inflation eases [59][66] - Management remains optimistic about long-term growth as the industry recovers from the cyclical downturn [7][34] Other Important Information - The company repurchased approximately 393,000 shares for about $42 million during the quarter [7][19] - A new authorization to acquire $500 million of the company's outstanding stock was recently approved by the board [7][19] - The company released its annual sustainability report, highlighting its commitment to reducing carbon footprint and investing in green energy [13] Q&A Session Summary Question: Can you provide insights on the pricing environment in Flooring North America? - Management indicated that while the segment's sales were flat, stronger performance in hard surfaces was noted, with ongoing productivity initiatives helping to mitigate pricing pressures [36][37] Question: What is the expected impact of new tariffs on costs? - Management stated that the current tariff negotiations are ongoing, and while initial tariffs were around 10%, they could rise significantly, impacting pricing strategies [41][42] Question: How is the company addressing competitive pricing pressures? - The company has announced price increases of 8% to offset rising costs and is exploring supply chain optimizations to manage tariff impacts [46][47] Question: What is the outlook for profitability in the second half of the year? - Management anticipates continued challenges in the market but expects improvements in profitability driven by restructuring actions and a favorable product mix [58][66] Question: How is the M&A pipeline looking? - The M&A pipeline remains limited due to compressed earnings in the housing industry, but management expects opportunities to arise as market conditions improve [114][115]

Financial Data and Key Metrics Changes - The company's net sales for Q2 2025 were $2.8 billion, essentially flat compared to the previous year, both as reported and on a constant basis [5][14] - Adjusted earnings per share for Q2 were $2.77, with productivity and restructuring actions contributing positively, while higher input costs and plant shutdowns had a negative impact [5][14] - Gross margin for the quarter was reported at 25.5%, with an adjusted gross margin of 26.4%, reflecting a decrease of approximately 70 basis points year-over-year due to higher input costs and lower sales volume [14][15] Business Line Data and Key Metrics Changes - Global Ceramic segment sales exceeded $1.1 billion, a 0.5% increase as reported, benefiting from new product introductions and strong commercial business [15][16] - Flooring North America reported sales of $947 million, a 1.2% decrease primarily due to lower volumes in soft surfaces, although resilient and laminate businesses showed favorable product mix [16][17] - Flooring Rest of the World had sales of $734 million, a 1% increase as reported, but a 3% decrease on a constant basis, primarily due to pricing pressure in the residential remodeling channel [17][18] Market Data and Key Metrics Changes - The U.S. housing inventory has risen to its highest level since 2007, impacting sales of new and existing homes, with builders offering price reductions to stimulate purchases [7][8] - The architectural billing index in the U.S. is forecasting slowing conditions, indicating potential challenges in the commercial channel moving forward [7] - In Europe, the housing market is constrained by affordability issues, although lower interest rates are expected to stimulate consumer spending and housing sales [10][11] Company Strategy and Development Direction - The company is focusing on operational improvements, cost containment, and market development initiatives to navigate challenging market conditions [5][6] - Restructuring actions are on schedule, expected to deliver approximately $100 million in annual cost savings in 2025 [6][15] - The company is emphasizing the benefits of locally produced collections in response to increasing tariffs and is adjusting pricing strategies accordingly [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that ongoing inflation and low consumer confidence are constraining industry sales, with the timing of recovery remaining unpredictable [29] - The company expects input cost pressures to peak in Q3, with a forecasted EPS for Q3 between $2.56 and $2.66, excluding restructuring charges [31][32] - Management remains optimistic about long-term growth as the industry recovers from cyclical downturns, leveraging operational improvements and product innovations [29][32] Other Important Information - The company generated approximately $125 million in free cash flow during the quarter and repurchased about 393,000 shares for approximately $42 million [6][14] - Cash and cash equivalents were reported at $547 million, with a current net debt of $1.7 billion and leverage at 1.2 times [18][19] - The company has reduced planned investments to approximately $500 million in 2025, focusing on cost reduction and product innovation [18] Q&A Session Summary Question: Can you provide insights on the pricing environment in Flooring North America? - Management indicated that while segment sales were flat, stronger performance in hard surfaces was noted, with ongoing productivity initiatives helping to mitigate pricing pressures [35][36] Question: What is the potential impact of new tariffs on costs? - Management stated that the current tariff negotiations are ongoing, and while initial tariffs were around 10%, they could rise significantly, impacting pricing strategies [39][40] Question: How is the competitive pricing landscape evolving? - Management confirmed that they have implemented price increases in response to rising costs and expect the industry to follow suit as tariffs increase [45][46] Question: What are the expectations for the commercial market moving forward? - Management noted that while the U.S. commercial business is performing well, there are expectations for a slowdown in the market due to leading indicators [87] Question: How is the company addressing the impact of tariffs on imports? - Management is actively monitoring tariff negotiations and adjusting supply chain strategies to mitigate potential impacts on costs and pricing [107][108]

Company Overview - Mohawk Industries' 2024 net sales reached $10.8 billion[12] - The company has approximately 41,900 employees and operates in around 180 countries[12] - The company estimates ~$100 million restructuring savings in 2025[34] Financial Performance - Q2 2025 net sales were $2.8021 billion, essentially flat compared to Q2 2024[67, 68] - Adjusted diluted EPS for Q2 2025 was $2.77[67, 68] - Adjusted EBITDA for Q2 2025 was $371.4 million, with an adjusted EBITDA margin of 13.3%[67, 68] - The company's free cash flow was approximately $126 million in Q2 2025[71] - The company has ~$1.6 billion in total share repurchases since 2020, representing ~15% of outstanding shares[50] Segment Performance - Global Ceramic segment sales for Q2 2025 were $1.1209 billion with an adjusted operating income of $90.3 million[75] - Flooring Rest of the World segment sales for Q2 2025 were $734.4 million with an adjusted operating income of $76.4 million[80] - Flooring North America segment sales for Q2 2025 were $946.8 million with an adjusted operating income of $69.2 million[85] Outlook and Strategy - The company reduced its 2025 CapEx projection to ~$500 million[71, 89] - Q3 2025 guidance for EPS is $2.56 to $2.66[89]

Core Insights - Mohawk Industries reported $2.8 billion in revenue for Q2 2025, showing no change year over year, with an EPS of $2.77 compared to $3.00 a year ago [1] - The revenue was slightly below the Zacks Consensus Estimate of $2.79 billion, resulting in a surprise of +0.37%, while the EPS exceeded expectations by +5.73% against a consensus estimate of $2.62 [1] Financial Performance Metrics - Global Ceramic net sales were reported at $1.12 billion, matching analyst estimates and reflecting a +0.5% change year over year [4] - Flooring ROW net sales reached $734.4 million, surpassing the average estimate of $718.31 million, with a year-over-year increase of +1% [4] - Flooring NA net sales were $946.8 million, slightly below the average estimate of $947.28 million, indicating a -1.2% change year over year [4] - Adjusted Operating Income for Global Ceramic was $90.3 million, exceeding the average estimate of $80.12 million [4] - Adjusted Operating Income for Flooring NA was $69.2 million, below the average estimate of $72.17 million [4] - Adjusted Operating Income for Flooring ROW was $76.4 million, closely aligning with the average estimate of $76.45 million [4] - Corporate and intersegment eliminations reported an adjusted operating income of -$12.9 million, worse than the average estimate of -$10.13 million [4] Stock Performance - Mohawk Industries shares have returned +13.7% over the past month, outperforming the Zacks S&P 500 composite, which saw a +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Mohawk Industries reported quarterly earnings of $2.77 per share, exceeding the Zacks Consensus Estimate of $2.62 per share, but down from $3 per share a year ago, indicating a +5.73% earnings surprise [1][2] Financial Performance - The company achieved revenues of $2.8 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.37%, consistent with year-ago revenues [2] - Over the last four quarters, Mohawk Industries has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Mohawk Industries shares have declined approximately 2.1% since the beginning of the year, contrasting with the S&P 500's gain of 8.1% [3] - The current Zacks Rank for Mohawk Industries is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.74 on revenues of $2.73 billion, and for the current fiscal year, it is $9.13 on revenues of $10.77 billion [7] - The trend of estimate revisions for Mohawk Industries was mixed ahead of the earnings release, which may change following the recent report [6] Industry Context - The Textile - Home Furnishing industry, to which Mohawk Industries belongs, is currently in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

[Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Mohawk Industries reported Q2 2025 net sales were flat year-over-year, while both GAAP and adjusted net earnings and EPS declined Q2 & H1 2025 Key Financial Results (vs. Prior Year) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change | H1 2025 (USD) | H1 2024 (USD) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $2.8B | $2.8B | ~0% | $5.3B | $5.5B | -2.8% | | Net Earnings | $147M | $157M | -6.4% | $219M | $262M | -16.4% | | EPS | $2.34 | $2.46 | -4.9% | $3.49 | $4.10 | -14.9% | | Adjusted Net Earnings | $173M | $192M | -9.9% | $269M | $310M | -13.2% | | Adjusted EPS | $2.77 | $3.00 | -7.7% | $4.29 | $4.85 | -11.5% | [Management Commentary & Business Outlook](index=1&type=section&id=Management%20Commentary%20%26%20Business%20Outlook) Management highlights operational improvements and tariff management, anticipating input cost pressures to peak in Q3 with adjusted EPS guidance of **$2.56** to **$2.66** [Operational Performance and Strategy](index=1&type=section&id=Operational%20Performance%20and%20Strategy) The company is executing restructuring plans for **$100 million** in benefits, enhancing product mix, and leveraging North American manufacturing to mitigate tariffs - Restructuring actions are on schedule and expected to deliver approximately **$100 million** in benefits this year[10](index=10&type=chunk) - The company is mitigating industry pricing pressure by strengthening its product and channel mix, with a focus on premium collections and new introductions[3](index=3&type=chunk) - To counter increasing tariffs, the company is emphasizing its locally produced collections, as approximately **85%** of its U.S. sales are from goods produced in North America[6](index=6&type=chunk)[10](index=10&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) In Q2 2025, Global Ceramic net sales and operating margin slightly increased, while Flooring Rest of World and North America segments experienced sales declines and margin pressures Q2 2025 Segment Performance vs. Prior Year | Segment | Net Sales Change (Reported) (%) | Net Sales Change (Adjusted) (%) | Operating Margin (Adjusted) (%) | | :--- | :--- | :--- | :--- | | Global Ceramic | +0.5% | +1.1% | 8.1% | | Flooring Rest of World | +1.0% | -3.0% | 10.4% | | Flooring North America | -1.2% | N/A | 7.3% | [Future Outlook and Guidance](index=3&type=section&id=Future%20Outlook%20and%20Guidance) The company anticipates continued sales constraints due to inflation and low consumer confidence, with input cost pressures peaking in Q3, and projects Q3 2025 adjusted EPS between **$2.56** and **$2.66** - Q3 2025 adjusted EPS is guided to be between **$2.56** and **$2.66**, excluding any restructuring charges or potential new tariff impacts[11](index=11&type=chunk) - Input cost pressures are expected to continue, with the impact peaking in the third quarter as higher costs flow through inventory[10](index=10&type=chunk) - The company believes it is strategically positioned to capitalize on opportunities as the industry recovers from the current cyclical downturn[5](index=5&type=chunk)[12](index=12&type=chunk) [Capital Allocation](index=1&type=section&id=Capital%20Allocation) Mohawk generated approximately **$125 million** in Q2 2025 free cash flow, repurchased **$42 million** in shares, and authorized a new **$500 million** share repurchase program - Generated approximately **$125 million** of free cash flow in Q2 2025[4](index=4&type=chunk) - Purchased approximately **393,000** shares for **$42 million** during the quarter[4](index=4&type=chunk) - The Board of Directors approved a new **$500 million** share repurchase authorization[4](index=4&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a decline in Q2 2025 gross profit and operating income, an increase in total assets, and a significant decrease in H1 2025 operating cash flow [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q2 2025 net sales remained flat at **$2.80 billion**, while gross profit, operating income, and net earnings all experienced year-over-year declines Q2 2025 Statement of Operations Highlights (in millions) | Account | Q2 2025 (USD millions) | Q2 2024 (USD millions) | | :--- | :--- | :--- | | Net sales | $2,802.1 | $2,801.3 | | Gross profit | $714.4 | $723.8 | | Operating income | $188.7 | $214.0 | | Net earnings | $146.5 | $157.4 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 28, 2025, total assets increased to **$13.78 billion**, total liabilities decreased to **$5.48 billion**, and total stockholders' equity rose to **$8.30 billion** Balance Sheet Summary (in millions) | Account | June 28, 2025 (USD millions) | June 29, 2024 (USD millions) | | :--- | :--- | :--- | | Total current assets | $6,064.9 | $5,641.3 | | Total assets | $13,778.8 | $13,279.6 | | Total current liabilities | $2,853.2 | $2,937.7 | | Total liabilities | $5,481.2 | $5,627.1 | | Total stockholders' equity | $8,297.6 | $7,652.5 | [Other Financial Information (Cash Flow)](index=6&type=section&id=Other%20Financial%20Information%20%28Cash%20Flow%29) Net cash provided by operating activities for H1 2025 significantly decreased to **$210.0 million**, resulting in free cash flow of **$40.7 million** after capital expenditures Cash Flow Summary (in millions) | Metric | Six Months Ended 2025 (USD millions) | Six Months Ended 2024 (USD millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $210.0 | $417.3 | | Capital expenditures | $169.3 | $178.2 | | Free cash flow | $40.7 | $239.1 | [Segment Information](index=8&type=section&id=Segment%20Information) For H1 2025, all segments experienced year-over-year net sales declines, with Flooring North America's operating income halving, while Global Ceramic remained stable and Flooring Rest of World decreased Six Months Ended Segment Performance (in millions) | Segment | Net Sales H1 2025 (USD millions) | Net Sales H1 2024 (USD millions) | Operating Income H1 2025 (USD millions) | Operating Income H1 2024 (USD millions) | | :--- | :--- | :--- | :--- | :--- | | Global Ceramic | $2,114.7 | $2,160.4 | $130.0 | $131.9 | | Flooring NA | $1,809.2 | $1,858.7 | $61.8 | $123.3 | | Flooring ROW | $1,404.0 | $1,461.6 | $124.5 | $136.5 | [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section details reconciliations of GAAP to non-GAAP financial measures, adjusting for items like restructuring costs and currency effects to provide a clearer view of core operating performance [Reconciliation of Net Earnings to Adjusted Net Earnings and EPS](index=8&type=section&id=Reconciliation%20of%20Net%20Earnings%20to%20Adjusted%20Net%20Earnings%20and%20EPS) Q2 2025 GAAP net earnings of **$146.5 million** were adjusted to **$173.3 million**, primarily due to **$29.4 million** in restructuring costs, resulting in an adjusted EPS of **$2.77** Q2 2025 Reconciliation of Net Earnings to Adjusted Net Earnings (in millions) | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | | :--- | :--- | :--- | | Net earnings (GAAP) | $146.5 | $157.4 | | Restructuring & other costs | $29.4 | $41.4 | | Other adjustments (net) | $4.9 | $(7.3) | | Adjusted net earnings (Non-GAAP) | $173.3 | $191.5 | [Reconciliation of Net Sales to Adjusted Net Sales](index=9&type=section&id=Reconciliation%20of%20Net%20Sales%20to%20Adjusted%20Net%20Sales) Q2 2025 reported net sales of **$2.802 billion** were adjusted to **$2.780 billion** after accounting for constant shipping days and exchange rates, representing a **0.8%** adjusted year-over-year decrease Q2 2025 Reconciliation of Net Sales (in millions) | Metric | Amount (USD millions) | | :--- | :--- | | Net sales (GAAP) | $2,802.1 | | Adjustment for constant shipping days | $12.0 | | Adjustment for constant exchange rates | $(34.4) | | Adjusted net sales (Non-GAAP) | $2,779.7 | [Reconciliation of Profitability Metrics](index=10&type=section&id=Reconciliation%20of%20Profitability%20Metrics) Q2 2025 adjusted operating income decreased to **$223.0 million** (**8.0%** margin) from **$256.7 million** (**9.2%** margin) in Q2 2024, primarily due to restructuring cost adjustments Q2 2025 Reconciliation of Operating Income (in millions) | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | | :--- | :--- | :--- | | Operating income (GAAP) | $188.7 | $214.0 | | Restructuring & other costs | $29.4 | $41.4 | | Legal settlements, etc. | $4.9 | $1.3 | | Adjusted operating income (Non-GAAP) | $223.0 | $256.7 | | Adjusted operating margin | 8.0% | 9.2% | [Reconciliation of Net Earnings to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Earnings%20to%20Adjusted%20EBITDA) Mohawk's TTM Adjusted EBITDA was **$1,342.1 million** as of June 28, 2025, resulting in a net debt to Adjusted EBITDA ratio of **1.2x** - Trailing twelve months Adjusted EBITDA was **$1,342.1 million**[26](index=26&type=chunk) - The ratio of Net Debt to Adjusted EBITDA was **1.2x** as of June 28, 2025[26](index=26&type=chunk) [Reconciliation of Total Debt to Net Debt](index=9&type=section&id=Reconciliation%20of%20Total%20Debt%20to%20Net%20Debt) As of June 28, 2025, total debt was **$2.201 billion**, and after subtracting cash, net debt stood at **$1.654 billion** Net Debt Calculation as of June 28, 2025 (in millions) | Metric | Amount (USD millions) | | :--- | :--- | | Total debt | $2,201.0 | | Less: Cash and cash equivalents | $546.7 | | Net debt | $1,654.3 | - The company provides non-GAAP measures to help investors understand long-term profitability trends by excluding items that may not be indicative of core operating performance[34](index=34&type=chunk)[36](index=36&type=chunk)

Core Insights - Mohawk Industries reported second quarter 2025 net earnings of $147 million and earnings per share (EPS) of $2.34, with adjusted net earnings of $173 million and adjusted EPS of $2.77, indicating a decline from the previous year's figures [1][2] - Net sales for the second quarter were $2.8 billion, remaining flat year-over-year, but showing a decrease of 0.8% when adjusted for constant days and exchange rates [1][2] - The company generated approximately $125 million in free cash flow and repurchased around 393,000 shares for approximately $42 million, with a new authorization to acquire $500 million of outstanding common stock [4] Financial Performance - For the first six months of 2025, net earnings were $219 million, with an EPS of $3.49, and adjusted net earnings of $269 million, with an adjusted EPS of $4.29, reflecting a decrease from the prior year [2] - The company reported net sales of $5.3 billion for the first half of 2025, down 2.8% as reported and 0.7% on an adjusted basis compared to the previous year [2] Operational Insights - The Chairman and CEO highlighted ongoing operational improvements, cost containment actions, and market development initiatives as key factors in navigating challenging market conditions [3] - The company is focusing on enhancing productivity through equipment upgrades, energy conservation, supply chain optimization, and product re-engineering [3][9] Segment Performance - The Global Ceramic Segment saw a net sales increase of 0.5% as reported, with an operating margin of 7.9% [6] - The Flooring North America Segment experienced a 1.2% decrease in net sales, with an operating margin of 5.5% [8] - The Flooring Rest of the World Segment reported a 1.0% increase in net sales, but a 3.0% decrease when adjusted for constant days and exchange rates, with an operating margin of 9.0% [7] Strategic Initiatives - The company is addressing increasing tariffs by emphasizing locally produced collections and adjusting prices accordingly [5] - Mohawk's restructuring actions are expected to deliver approximately $100 million in benefits this year, while also strengthening operations for future growth [10] Market Outlook - The company anticipates that the third quarter adjusted EPS will be between $2.56 and $2.66, excluding any restructuring or one-time charges [10] - Historical trends suggest that down cycles in the industry are typically followed by several years of sales growth due to pent-up demand [11]

Company Overview - Mohawk Industries, Inc. operates as a provider of rugs, flooring, carpets, ceramic tiles, and other similar products [1] Investment Insights - Crude Value Insights offers an investing service and community focused on oil and natural gas, emphasizing cash flow and companies that generate it, leading to value and growth prospects with real potential [1] Subscriber Benefits - Subscribers gain access to a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions of the sector [2]