Industry research signals rising demand for stone; recent acquisitions and a 32-state footprint position Capstone to lead the market NEW YORK CITY, NEW YORK / ACCESS Newswire / November 13, 2025 / Capstone Holding Corp. (NASDAQ:CAPS), a national building products distribution platform, today highlighted accelerating demand for stone in global construction markets. This industry trend is directly supportive of Capstone's strategy, as the company builds scale in stone distribution through Carolina Stone and i ...

Financial Data and Key Metrics Changes - The company achieved 4% net sales growth, with 3% organic daily sales growth and 11% growth in adjusted EBITDA compared to the prior year period [4][12]. - Adjusted EBITDA for the quarter increased 11% to $127.5 million, and adjusted EBITDA margin improved 60 basis points to 10.1% due to higher net sales, improved gross margin, and increased SG&A leverage [16][29]. - Net income attributable to the company increased 33% to $59 million due to net sales growth, improved gross margin, and SG&A leverage [28]. Business Line Data and Key Metrics Changes - Organic sales volume grew 2% during the third quarter, with agronomic products and landscaping products both achieving 3% organic daily sales growth [13][26]. - Pricing for landscaping products was up 1%, while agronomic products were flat, reflecting a recovery from previous deflation [66]. - Acquisition sales contributed approximately $13 million or 1% to net sales growth [27]. Market Data and Key Metrics Changes - The company estimates it holds about an 18% share of the $25 billion wholesale landscape products distribution market, indicating significant growth potential [6]. - The residential new construction end market was down during the quarter, particularly in Texas, Florida, Arizona, and California, while the repair and upgrade market showed signs of stabilization [13][55]. - Seven out of nine regions achieved positive organic daily sales growth in the third quarter, despite weaker sales in the Sun Belt states [26]. Company Strategy and Development Direction - The company aims to leverage its scale and resources to deliver superior value to customers and suppliers, focusing on organic growth and acquisitions to fill product lines [7][9]. - The acquisition strategy remains a key focus, with four companies added in 2025, contributing approximately $40 million in trailing 12-month sales [21][38]. - Plans to consolidate or close 15 to 20 branches in 2026 are in place to optimize operations and reduce costs [21][58]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive continued performance and growth despite softer end markets heading into 2026 [5][55]. - The outlook for the fourth quarter includes expectations for low single-digit organic daily sales growth, driven by positive pricing and commercial initiatives [57]. - Management noted that while the repair and upgrade market has been down, it appears to be stabilizing, providing a foundation for future growth [56]. Other Important Information - The effective tax rate for the third quarter was 20.4%, a decrease from 26.2% in the prior year period, primarily due to increased excess tax benefits from stock-based compensation [28]. - The company has repurchased approximately 656,000 shares for a total of approximately $78 million at an average price of approximately $118 per share year to date [29][31]. - The company plans to maintain financial strength and flexibility to execute its growth strategy in all market environments [31]. Q&A Session Summary Question: Why is the charge not excluded from adjusted EBITDA guidance? - The company maintains strict guidelines regarding adjusted EBITDA, which primarily reflect acquisitions and adjustments within the first year [65]. Question: What is the pricing outlook for agronomic versus landscape products? - Pricing for landscape products was up 1%, while agronomic products were flat. The expectation for the fourth quarter is a price increase between 1% and 2% [66]. Question: Are there signs of stabilization in the repair and upgrade market? - Management noted that discussions with customers indicate stabilization in the repair and upgrade market, with a more optimistic outlook than three months ago [72]. Question: How does the company plan to manage SG&A in the fourth quarter? - The company expects to achieve good SG&A leverage in the fourth quarter, with continued focus on productivity improvements [74]. Question: What is the company's approach to acquisitions moving forward? - The company expects to see a higher number of acquisitions in 2026 compared to 2025, focusing on well-run companies rather than turnaround opportunities [92].

Core Insights - Mohawk Industries reported third quarter 2025 net earnings of $109 million and earnings per share (EPS) of $1.75, with adjusted net earnings of $167 million and adjusted EPS of $2.67, reflecting a slight increase in net sales to $2.8 billion, up 1.4% year-over-year [1][2][3] Financial Performance - For the nine months ended September 27, 2025, net earnings were $328 million with an EPS of $5.24, while adjusted net earnings were $435 million and adjusted EPS was $6.96. Net sales for this period totaled $8.1 billion, a decrease of 1.4% compared to the previous year [2][3] - The company generated approximately $310 million in free cash flow during the quarter and repurchased 315,000 shares for about $40 million [5][17] Market Conditions and Strategy - The company faced weakened economic conditions but believes it outperformed its markets, benefiting from a successful product mix and ongoing productivity initiatives [3][10] - Mohawk is executing targeted actions to enhance performance, including operational improvements and cost structure reductions, aiming for annualized savings of approximately $32 million [4][10] Segment Performance - Net sales in the Global Ceramic Segment increased by 4.4% as reported, with an operating margin of 6.5% [7] - The Flooring Rest of the World Segment saw a 4.3% increase in net sales, while the Flooring North America Segment experienced a 3.8% decrease [8][9] Industry Outlook - The flooring industry is currently challenged by low home sales and postponed consumer purchases, but declining interest rates and increased disposable income are expected to support future home sales and remodeling [11][10] - The company anticipates that market volume will remain soft through the end of the year, projecting fourth quarter adjusted EPS between $1.90 and $2.00 [10][11]

Core Insights - Mohawk Industries will release its Third Quarter 2025 earnings on October 23, 2025, followed by a live conference call on October 24, 2025, at 11:00 am ET [1][2]. Company Overview - Mohawk Industries is the leading global flooring manufacturer, producing a wide range of products that enhance both residential and commercial spaces [3]. - The company has a vertically integrated manufacturing and distribution process, providing competitive advantages in producing various flooring types, including carpet, rugs, ceramic tile, laminate, wood, stone, and vinyl [3]. - Over the past two decades, Mohawk has evolved from an American carpet manufacturer to the world's largest flooring company, with operations across North America, Europe, South America, Oceania, and Asia [3].

Company Overview - Mohawk Industries is the leading global flooring manufacturer, enhancing residential and commercial spaces worldwide [2] - The company has transformed from an American carpet manufacturer into the world's largest flooring company over the past two decades, with operations in North America, Europe, South America, Oceania, and Asia [2] - Mohawk's vertically integrated manufacturing and distribution processes provide competitive advantages in producing various flooring products, including carpet, rugs, ceramic tile, laminate, wood, stone, and vinyl flooring [2] Upcoming Earnings Call - Mohawk Industries will release its Second Quarter 2025 earnings on July 24, 2025, followed by a conference call on July 25, 2025, at 11:00 am ET [1] - The conference call will be available for live streaming on the company's investor relations website [1] - For those unable to attend the live call, a replay will be available until August 22, 2025 [1]

Financial Data and Key Metrics Changes - The company reported diluted earnings of $0.44 per share for Q4 2024, including a net benefit of $6.8 million from a derivative litigation settlement [14] - For the full year 2024, diluted earnings were $1.90 per share, which also included the $0.05 benefit from the settlement [15] - Q4 2024 gross profit rose by 8.9%, with a gross margin rate of 43.5%, while the full-year gross margin rate increased to 43.3% from 42.1% [56] - Selling and store operating expenses increased by 10.1% in Q4 2024, while general and administrative expenses decreased by 5.4% [57][59] - Adjusted EBITDA for Q4 2024 increased by 11.1% to $119.8 million, while full-year adjusted EBITDA declined by 7.0% to $512.5 million [63][65] Business Line Data and Key Metrics Changes - Total sales for Q4 2024 increased by 5.7% year-over-year, while comparable store sales decreased by 0.8%, showing improvement from previous quarters [23][24] - The company opened 10 new warehouse format stores in Q4 2024, totaling 30 new stores for the fiscal year [19] - Spartan Surfaces experienced a 17.9% decline in Q4 sales, primarily due to weakness in the multifamily residential market [46] Market Data and Key Metrics Changes - The company noted that existing home sales rose for the third consecutive month in December 2024, despite elevated mortgage interest rates [24] - The west division showed encouraging comparable store sales trends, with modest growth year-over-year [28] Company Strategy and Development Direction - The company aims to open 25 new warehouse format stores in fiscal 2025, focusing on strategic growth despite industry pressures [20][21] - Investments in innovative merchandise and technology are prioritized to enhance customer experience and drive long-term growth [15][30] - The company is diversifying its supply chain to reduce reliance on China, with the U.S. now being the largest country of manufacture [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth opportunities in hard-surface flooring due to supply and demand imbalances in housing [16] - The company is carefully planning for fiscal 2025 amid geopolitical uncertainties and mixed economic indicators, with total sales expected to range from $4.740 billion to $4.900 billion [68][70] - Management highlighted the importance of existing home sales for driving growth in same-store sales [100] Other Important Information - The company achieved a record high net promoter score in January 2025, reflecting strong customer service [53] - The company plans to continue investing in technology and e-commerce to enhance customer engagement [37] Q&A Session Summary Question: What is driving the slightly weaker performance quarter-to-date? - Management attributed the slowdown to weather impacts, noting that sales typically recover over time [80] Question: How should we think about the incrementality or flow-through to the model? - Management indicated that better-than-expected sales lead to strong flow-through, with expectations of high 30s flow-through if sales exceed projections [84][86] Question: What are the expectations for housing backdrop and its impact on sales? - Management expects a slow recovery in housing, with benefits from immature stores contributing to sales growth [99][100] Question: How will the company manage supply chain costs and pricing in 2025? - The company plans to negotiate with suppliers, diversify sourcing, and adjust prices as necessary to manage costs [128]