MAS · Q4 2024 Earnings

Cautious

Masco

Reported February 10, 2026

30-second summary

30-second take: Masco closed FY2025 with adjusted EPS of $3.96 (-3% YoY), narrowly clearing the cut $3.90–$3.95 guide set at Q3 by a penny, on Q4 revenue of $1.79B (-2% YoY) and full-year revenue of $7.56B (-3% YoY). Q4 adjusted operating margin of 14.4% (-150bps YoY) confirms what Q3 hinted at — the prior "approximately 17%" FY frame did not hold; full-year landed at 16.8% adjusted (16.5% reported). FY2026 guidance debuts with adjusted EPS of $4.10–$4.30 (midpoint ~6% growth) and GAAP EPS of $3.91–$4.11, against a "roughly flat to up low-single digits" sales backdrop, meaning the EPS growth has to come from pricing, cost savings, and operational efficiency rather than volume. Two structural items land alongside the print: Liberty Hardware moves from Decorative Architectural into Plumbing (Delta Faucet) effective 2026 — recasted segment data provided — and the board authorized a new $2.0B share repurchase program replacing the prior authorization.

Headline numbers

EPS

Q4 FY2024

$0.82

Revenue

Q4 FY2024

$1.79B

-2.0% YoY

Gross margin

Q4 FY2024

33.9%

Operating margin

Q4 FY2024

13.8%

Key financials

Q4 FY2024

Metric	Q4 FY2024	YoY	Q3 FY2025	QoQ
Revenue	$1.79B	-2.0%	$1.92B	-6.5%
EPS	$0.82	—	$0.97	-15.5%
Gross margin	33.9%	—	34.2%	-30bps
Operating margin	13.8%	—	15.8%	-200bps

Guidance

FY2025 adjusted EPS beat guidance slightly; FY2026 guidance introduced with mid-single-digit EPS growth but flat-to-low-single-digit revenue outlook, reflecting expected market stagnation.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS	FY 2025	$3.90 - $3.95	$3.96	+0.01 to +0.06 above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS	FY 2026	$4.10 - $4.30	+3.5% to +8.6% YoY
Revenue	FY 2026	roughly flat to up low-single digits (excluding currency and divestitures)	—
Global repair and remodel markets	FY 2026	roughly flat	—

Segment KPIs

Q4 FY2024

Segment	Q4 FY2024	YoY
Plumbing Products	$1.248B	+5.0%
Decorative Architectural Products	$0.545B	-15.0%
Plumbing Products Operating Margin (adjusted)	16.3%	—
Decorative Architectural Products Operating Margin (adjusted)	13.9%	—

Other KPIs

Q4 FY2024

Segment	Q4 FY2024
Gross Margin (adjusted)	33.7%
Operating Margin (adjusted)	14.4%
Full Year Free Cash Flow	$866 million
2026 Adjusted EPS Guidance (midpoint)	$4.20

Management tone

CEO Jon Nudi framed Q4 as "largely in line with our expectations" against "a dynamic geopolitical and macroeconomic environment." The capital allocation message was prominent — $281M returned in Q4, $832M for the year, and a new $2.0B repurchase authorization replacing the prior program. Nudi also flagged the formation of "an Executive Committee with dual corporate and business unit representation to fully leverage our enterprise strengths," paired with restructuring actions to "streamline our business, reduce headcount, and optimize operations." That is a structural cost-out and governance message, not a market-recovery message.

The FY2026 framing — "roughly flat" global R&R, sales "roughly flat to up low-single digits" with continued outperformance — is consistent with a market that has not yet pivoted to sustained growth. The Liberty Hardware integration into Delta Faucet was positioned as "a key component of our consumer driven strategy to leverage our brands, capabilities, and scale," and the recasted segment data confirms it materially reshapes both segments going forward.

Recurring themes management leaned on this quarter:

Margin expansion through pricing discipline and cost efficiencies rather than volumeMarket stabilization but delayed recovery to historical growth ratesGeographic divergence with North America weaker, international showing resiliencePortfolio streamlining through selective divestitures driving operational focusTariff mitigation and supply chain optimization as ongoing priorityPro paint outperformance offsetting DIY paint weakness

Risks management surfaced:

China tariff uncertainty and potential for future tariffs beyond current $45 million annualized impactNorth American plumbing wholesale and retail channel softness persisting into 2025DIY paint market slower-than-expected recovery timelineGlobal repair and remodel markets expected flat to down low single digits in 2025Currency headwinds with stronger US dollar reducing international sales by approximately 1%

Q&A highlights

John Lovallo · UBS

How can Masco maintain FY26 margin targets despite Kichler divestiture (contributing ~$250M sales at mid-single-digit EBITDA margins, which should mechanically improve margins by ~100 bps)? When will DIY volumes turn positive after years of negative comps?

Management indicated the DIY headwind is offsetting the mechanical Kichler benefit. They expect DIY recovery depends on consumer confidence and fundamental tailwinds (millennial household formations, age of housing stock, deferred demand). Management emphasized their ability to manage volatile markets and gain share. They look to point-of-sale information and market trends; exiting 2024 in a position of stability rather than decline.

Kichler contributed ~$250M sales at mid-single-digit EBITDA marginsDIY headwind offset mechanical Kichler margin benefitExiting 2024 in position of stability vs. prior yearFocus on consumer confidence as driver of DIY recovery

Stephen Kim · Evercore ISI

What was the inventory timing benefit in decorative architectural Q4, margin impact, and anticipated Q1 2025 headwind? What is Masco's M&A strategy focus—plumbing only or also decorative architectural—and how does macro environment and technology factor in?

Inventory timing benefit was mid-single digit to top line with proportional profit benefit in Q4; anticipated as equal headwind in early 2025. M&A strategy targets bolt-ons in both paint and plumbing; market remains soft with modest uplift in deal flow. Technology is part of the M&A lens but not the primary driver; Sauna 360 cited as example of desired tuck-in acquisitions leveraging channel, brands, or specific technologies.

Q4 inventory timing benefit: mid-single digit to top lineProportional profit dynamic in Q4; equal headwind anticipated in early 2025Decorative architecture expected roughly flat ex-Kichler divestiture in 2025Pro-paint business expected up mid-single digits

Anthony Pitineri · Citi

What cost inflation assumptions are embedded in 2025 guidance? What pricing actions offset inflation, and will 2025 cost savings initiatives deliver similar magnitude to 2024?

Plumbing: low single-digit inflation (commodity + freight) expected, with pricing more than offsetting the headwind (positive price-cost dynamic). Decorative architectural: some inflationary pressure on resins/TIO2; price-cost assumed flat due to channel partner price-cost-neutral arrangement. Cost savings initiatives will continue as a priority; no specific quantification given but indicated they remain a key lever for margin expansion given modest market expectations.

Plumbing: low single-digit commodity + freight inflation expectedPlumbing: pricing expected to more than offset commodity headwindDA: inflationary pressure on resins and TIO2DA: price-cost neutral arrangement with channel partner (price-cost flat assumed)

Matthew Bully · Barclays

How is Masco quantifying and mitigating the tariff impact (estimated ~15+ cents to EPS)? Is mitigation via sourcing, operational efficiency, or pricing? What incremental pricing has been announced?

Tariff mitigation combines multiple levers: sourcing footprint optimization (reduced China exposure by 45% since 2018), supplier cost-sharing discussions, and pricing (not separately quantified). Net tariff impact factored into 2025 guidance. Timing effects noted: tariffs effective Feb 4; delayed flow through inventory and mitigation actions layer in over time, contributing to flattish 1H margins and increase in 2H.

China exposure reduced 45% since 2018~30 US manufacturing facilities and 20 distribution centersMitigation actions: sourcing, supplier offsets, pricingNet tariff impact factored into 2025 guidance; not separately quantified

Sam Reed · Wells Fargo

What gives confidence that growth will accelerate in 2H 2025 vs. 1H? What are the macro assumptions embedded in the outlook (e.g., when will consumer confidence return)?

Growth acceleration confidence based on fundamental tailwinds: millennial household formations, age of housing stock, home equity, deferred demand from COVID pull-forward. Industry expected to return to growth in 2026; 2025 called as slightly down 1H, modest growth 2H. Management noted no material inventory stock-up ahead of tariffs in late Nov/early Dec. Historical share gains during volatile periods (COVID, supply chain, Texas freeze, plant explosions) cited as evidence of ability to execute.

1H 2025: slightly down; 2H: modest growthIndustry return to growth expected in 2026Fundamental tailwinds: millennial household formations, age of stock, home equity, deferred demandNo material channel inventory build ahead of tariffs in Q4

Answers to last quarter's watch list

Q4 adjusted operating margin trajectory. Q4 adjusted operating margin came in at 14.4% — well below the implied recovery needed to defend the prior ~17% FY frame. Adjusted EPS of $3.96 cleared the $3.90–$3.95 guide by a penny, so the bottom-line target held; the margin trajectory did not. Status: Resolved negatively

Whether the ~17% FY operating margin frame is formally retired or quietly held. Quietly retired. FY2025 adjusted operating margin landed at 16.8% (16.5% reported), and FY2026 guidance was issued without a total-company operating margin target. The ~17% anchor is gone, with no replacement. Status: Resolved negatively

2026 DIY paint signal. The signal is "roughly flat" R&R markets for 2026 and a Decorative Architectural Q4 that decelerated to -15% YoY. No near-term inflection signaled. Status: Resolved negatively

What to watch into next quarter

Whether Q1 2026 adjusted operating margin recovers above 15%. Q4 2025 landed at 14.4%. A Q1 print below 14% would imply the FY2026 EPS midpoint of $4.20 is at risk and pricing/cost-save leverage is not landing as planned.

Decorative Architectural Q1 print (on the recasted basis) and any DIY paint inflection language. Q4 -15% YoY accelerated the decline. Watch whether Q1 stabilizes on the post-Liberty-reorganization base or extends the deterioration.

Reintroduction (or continued absence) of a total-company operating margin target. The ~17% frame is retired. If management refuses to anchor a FY2026 margin target on the Q1 call, that is a continued disclosure regression and limits investor ability to triangulate the EPS algorithm.

Pace of the $2.0B repurchase program and any M&A deployment. A $2.0B authorization replacing the prior program is a notable capital-allocation signal; pace of execution against the FY2026 EPS bridge will matter.

Restructuring savings realization. $50M of 2026 charges are baked into the EPS bridge as $0.19/share. Management framed the savings as funding "additional growth initiatives" and contributing to "future margin expansion" — watch for quantification of in-year savings and exit-rate run-rate on the Q1 call.

Plumbing margin on the recasted base. FY2024 recasted Plumbing adjusted margin is 18.8% and FY2025 recasted is 17.6%. Watch whether the integrated Plumbing segment can rebuild toward the high-teens on pricing discipline and the announced cost actions.

Sources

Masco Q4 2025 earnings press release (8-K Ex. 99), filed February 10, 2026 — https://www.sec.gov/Archives/edgar/data/62996/000006299626000004/a1231258-kex99.htm

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