Core Insights - The company reported Q1 revenue of $871 million, an increase from $749.5 million in the previous year, indicating a year-over-year growth in revenue [1] Group 1: Residential Segment Performance - The residential segment continues to face challenges due to a difficult housing market, which has not shown signs of improvement [1] - Factors such as housing affordability issues, insurance availability and costs, and overall economic uncertainty are negatively impacting consumer demand, leading to a decrease in residential revenue and earnings for Q1 of fiscal 2026 compared to the prior year [1] - The company is prioritizing plumbing and HVAC expansion plans in markets where it already has a strong presence in the single-family electrical business, in response to the challenging market conditions [1] Group 2: Future Outlook - Despite the current economic challenges expected to persist, particularly through the slower winter season, the company remains optimistic about the long-term outlook for its residential business [1]

Core Insights - The U.S. housing market is facing significant challenges, and recent Federal Reserve rate cuts are unlikely to improve affordability [2] - A structural housing shortage is identified as a key issue in the U.S. housing market, with a need for more housing units [3] - The Federal Reserve's previous purchases of mortgage-backed securities during the pandemic may have contributed to overheating the housing market, though the extent is uncertain [3] Economic Context - The U.S. labor market has softened, with the latest unemployment rate at 4.4%, which is above the cycle low of 3.4% recorded in April 2023 [4] - The Federal Reserve is transitioning from a restrictive to a neutral policy stance, indicated by several cuts to short-term rates [4] - Long-term yields and mortgage rates have decreased from their cycle highs over the past year [4]