Mohawk(US:MHK)2026-02-12 21:22Financial Performance - In Q4 2025, Mohawk Industries reported net earnings of $42 million and adjusted net earnings of $124 million, with an adjusted EPS of $2.00[1][2] - Net sales for Q4 2025 were $2.7 billion, reflecting a 2.4% increase as reported but a 3.3% decrease on an adjusted basis compared to Q4 2024[1][2] - For the full year 2025, net sales totaled $10.8 billion, a decrease of 0.5% as reported and 1.3% on an adjusted basis compared to 2024[2] - Adjusted net earnings attributable to Mohawk Industries, Inc. for the twelve months ended December 31, 2025, were $559.3 million, down from $617.2 million in 2024, reflecting a decline of 9.4%[23] - Adjusted diluted earnings per share for the twelve months ended December 31, 2025, were $8.96, compared to $9.70 in 2024, a decrease of 7.7%[23] - Earnings before income taxes for Q4 2025 were $66.0 million, a decline from $108.5 million in Q4 2024[32] - Adjusted earnings before income taxes remained stable at $149.5 million for both Q4 2025 and Q4 2024[32] Cash Flow and Capital Management - The company generated free cash flow of approximately $621 million in 2025 and repurchased about 1.3 million shares for approximately $150 million[3] - Capital spending in 2025 was reduced to $435 million, approximately 30% below depreciation levels, in response to market conditions[6] - Total debt as of December 31, 2025, was $2,030.5 million, with net debt standing at $1,174.4 million after accounting for cash and cash equivalents[24] Segment Performance - The Global Ceramic Segment saw net sales increase by 6.1% as reported, while the Flooring North America Segment experienced a 4.8% decrease in net sales[7][8] - The Global Ceramic segment reported net sales of $1,070.0 million for the three months ended December 31, 2025, an increase from $1,008.2 million in 2024[22] - Flooring NA segment experienced a decline in net sales to $892.5 million for the three months ended December 31, 2025, down from $937.2 million in 2024, a decrease of 4.9%[22] - Flooring segment operating income for Q4 2025 was $44.6 million, down from $60.9 million in Q4 2024[31] - Adjusted segment operating income as a percentage of net sales decreased to 8.8% in Q4 2025 from 10.0% in Q4 2024[31] Future Outlook - Mohawk anticipates first quarter 2026 adjusted EPS to be between $1.75 and $1.85, excluding any restructuring or one-time charges[10] - Mohawk expects improvements in sales and earnings for 2026, contingent on economic conditions and the recovery of residential remodeling[11] Tax and Accounting Adjustments - Income tax expense increased to $24.0 million in Q4 2025 from $18.3 million in Q4 2024[33] - Adjusted income tax expense as a percentage of adjusted earnings before income taxes was 17.1% in Q4 2025, slightly down from 17.8% in Q4 2024[33] - The company identified an immaterial error affecting prior financial statements, resulting in a $42.1 million reduction in reported accounts receivable[34][35] - The company recorded expenses of $9.5 million for the year ended 2023 and $3.0 million for the year ended 2024 due to prior period corrections[35] Non-GAAP Measures - The company emphasizes the use of non-GAAP measures to provide insights into growth trends and long-term profitability[36][38] - Certain items are excluded from non-GAAP measures to avoid obscuring underlying business trends, including restructuring and legal settlements[37][38] Asset Growth - Total assets increased to $13,687.3 million as of December 31, 2025, up from $12,736.5 million in 2024, representing a growth of 7.5%[21] - Consolidated net sales for the twelve months ended December 31, 2025, were $10,785.4 million, a slight decrease of 0.5% from $10,836.9 million in 2024[22] Gross Profit and Operating Income - Gross profit for the three months ended December 31, 2025, was $622.2 million, slightly up from $620.6 million in 2024[28] - Adjusted operating income for the three months ended December 31, 2025, was $152.1 million, compared to $159.8 million in 2024, a decrease of 4.7%[30]