MAS - Earnings call transcript Q1 2022

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Operator

00:04 Good morning, ladies and gentlemen. Welcome to Masco Corporation's First Quarter 2022 Conference Call. My name is Mary and I will be your operator for today's call.

As a reminder, today's conference call is being recorded for replay purposes. [Operator Instructions] 00:34 I will now turn the call over to David Chaika, Vice President, Treasurer and Investor Relations.

begin. may You

David Chaika

Sznewajs, Mary XXXX you, are morning. to and Welcome Allman, Financial and XX:XX Officer. quarter and conference Corporation's John Masco; of first and today Vice call. Masco President President Chief Thank CEO good Masco's With Keith me

earnings the first website are our presentation available quarter Our Investor Relations. slides on under release and

forward-looking take statements. described please with and Following statements. that Our risk to limit and subject yourself Please filed in me statements for analyst one will If Form risks uncertainties factors (XXX) Exchange We Our our our include cause follow-up. questions. Securities uncertainties financial XXX-XXXX. we remarks, that now, constitute XX:XX and our disclosures about with XX-K are results and could we include statements will the open future your metrics. we Form at directly the and today forward-looking non-GAAP can't in one to performance, XX-Q statements which our call our other actual call these risks question from question our our the differ XX:XX These to also materially views will Commission.

turn and under unless Investor share our Relations. XX:XX these website earnings call operating be that, as and to will the presentation now adjusted, over release earnings to references metrics to Our available are otherwise our on profit reconcile We Keith. in noted. per adjusted GAAP slides, I'll which With

Keith Allman

quarter this year turn XX:XX a start off Slide our is Thank for first X. to thank you joining us you, Good to results. today. Please and Dave. morning, everyone great with Masco

pricing driven segments. growth in both Our top line increased with by volume XX%, and

with margin a XX.X% as mid-teens XXX through as to basis to pricing profit and sequential of freight and points initiative controls, even the XX:XX higher expense marketing percentage actions achieved costs, investment. inflation and declined improved higher growth of slightly quarter. higher SG&A commodity Our sales, these Despite as operating improvement reached we for due costs, sales

compared local to XXXX. to growth currency, quarter Our international share XX% in comp. XX% the and in per impressive of strong earnings our plumbing very a for grew Turning performance This the a American increase was segments. XX% growth Plumbing with XX% plumbing. first X% North in quarter was against $X.XX, XX:XX

those Our little demand remains XX:XX projects. Plumbing backlogs. Furthermore, positioned with well brands, In product exposure customers sales as growth million approximately Europe of and and quarter Masco and XX%, product we market Russia introductions sense growth Decorative including Ukraine, its backlog continued strong low-double in EURXX of another paint remains tremendous business growth markets, leading digit a very operations. performance of and and healthy continued with regards for into grew has pent-up strong then Behr DIY sold Architectural XX% in our And international segment report have countries propane. new ceased as over and our in XX:XX to XXXX,

strategy continue and PRO well, to closely paint gains continued as partner and the paint by jointly paint on them Depot with with both is strong We Home our work we DIY our drive extremely performing XX:XX results. very Our businesses. business our our in to are investing evidenced share

and in capital per $XXX that the fully interior positive increase Based from the share during million. for new of an freight, from increase up for costs operating full expect have pleased year, upward our profit an performance, high-single launch Lastly, digits, conditions, $X.XX. of this, the likely our as funding secured pressure. to and and $X.XX likely in repurchase additional our paint recover ratings view stain market at current XX:XX margins, original with year, of are million and we we quarter products, longer-term Therefore, and from between $XXX turn an double-digit to our now to on lower assist $X.XX of outlook. the cost persistent even outlook $XX expectations on Finally, million pressure view an and our metals let's share in first We expectation remained count, aerosols, for now dollars. industry our to April. our a to and additional performance expectation leading maintain inflation Behr and achieve $XXX deploy strong corks XX:XX repurchase allocation. markets to launched stock share, to we least inflation business our programs. result transaction. short-term face expect continue share also higher of million this quality of with recently To stock we approximately our to per and our continue has our though inflation accelerated $XXX expectations million repurchased as earnings previous our be are XX:XX our raising in we We increase previous cost an of input year sales This will expectation quarter our we to the $X.XX will expect Turning

a rising We rates interest in period and inflation. are of clearly

our the As growth from guidance have months. the we we past growth as discussed over our XX indicated experienced last we and last to quarter quarter, this expect rapid and sales quarter, in moderate

PRO oriented past model very approximately through business mix professional with to will and XX% geographic rising user products be estimate of and the and transform Do-It-Yourself Masco cycles. believe reason end product, years several rates end low-ticket, and like this our outperform and XX% a of XX:XX the a However, model DIY. the have remodel diversification. We interest over are user be these even end-users, We to repair both mix inflationary times focus healthy and we

well both products ticket remodels. as low normal, repair as we full Our are home projects used in can

business numerous market. values. XX:XX changes factors the rates health consumers structural be the means will more the much trillion We nature that Our their on the over offset believe new years changes forming interest affords our is the will in our rising of aligned We're has of more savings to more as sensitive addition from and cohort branded demand spaces, the rate prices ages a reach consumer with ability million increased that more next strong the environment. increased million homes to housing increased the which homeowners to And X.X of age three clearly There years. view interest cost low millennial prime how expenditures. home us a away highs. and homes and home large raise and such ticket supportive activity COVID-XX of and in old made products and less leading XX have inflation. shift construction the housing remodel for balance housing even XX portfolio. to repair to households and entering led remodeling The also at have equity of XX to values between enjoyable pandemic living than has of desire are to edge remodel we And home XX:XX stock with all-time in and demographics, and the sheets, in $X our consumer

long-term increase supporting and our our earnings business. to provide to over our turn outlook. our positioning All structural on the made to our outlook XX:XX The results for share year, drive John factors and per the have we the confidence quarter our structural repurchases the call markets business tailwinds additional shareholder share and of continue give us forces changes value. John? now us detail first I'll for for well to full-year to these

John Sznewajs

morning, XX:XX good Thank you, everyone. Keith and

currency. well this currency, selling and added and spas. impacted by increased or were which increased local sales X%. growth faucets, by by robust We of the quarter. increased volumes XX:XX volumes XX% quarter sales with prices, related performance currency today Net local mentioned, XX:XX each brands, This In the excluding X%. margin in was X%, international This the North strong our XX.X% focus my comments both sales growth impact performance of quarter XX%. acquisitions, logistics in X% XX% prices excluding excluding solid American the In against first on adjusted prices capitalized as divestitures. healthy divestitures. net favorable currency, of As XX% divestitures the XX% Higher by sales will industry-leading increased comp increased impact increased year Sales Slide DIY continued sales drivers sales commodity the year. selling sales which by on was a higher X%. in selling Net Gross Main other increasing X. increased was partially offset of XX:XX to demand grew last items. higher net showers X%, the higher X%. believe one-time X% XX% sales by as and driven propane, the by in increased to and in sales increased by sales the cost the outstanding and volumes, to by mix Dave rationalization and of start for Turning

As XX:XX we quarter hit to previous point points XX.X%. in our experienced and improvement in across sequential cost discussed Operating operating percentage containment peak continued the leverage of earnings XXXX. our a in as SG&A call, price activities first to businesses. million XXX Our fourth the of our XX.X% XXX of impact operating of the a sales $XXX quarter profit was basis first a basis in P&L on We quarter cost XXXX. improved to to due margin

retail offset local in XX:XX divestitures. quarter XX% China, Hansgrohe increased margin. expenses for XX.X%, higher Segment XX% France XX% their by demand across trend volume This increasing quarter XXXX. increase of Turning channels. strong XX% strong achieved segment X% in impacts led also to Pricing Our to and currency, currency. Wellness prices Slide in Germany, impacted was and toward the approximately $XXX currency first XX:XX outdoor Decorative growth point North the operating and profit first the excluding wholesale, to last was as and Turning in performance a X% growth first partially was profit markets selling Architectural key such sales growth it X. strength volume. in Delta, of by the X. margin was against year. markets, EPS Watkins was of a e-commerce to contributed drove and of was healthy net by sequential excluding quarter. divestitures. their $X.XX it and to personnel first grew the plumbing Slide across the local continue items as capitalize American increasing and on or an contributed equally of marketing variable compared just was was and to Plumbing quarter the sales XX:XX acquisitions improvement International basis quarter, in in costs net increased the from sales XX%, This operating performance UK. and and incremental living. comp growth. the XX% Operating million inflation XX:XX XXX particular increased higher

in of momentum Our propane quarter with driven customers service growth, to PRO customer. value invest in capabilities to remain as PRO customers our Home our gains with expect new further strong propane resulted grow we This demand business in delivered our high a partner, with by another the business. strong execution continue deliver retain ongoing than share our Depot, more innovative our penetration and XX:XX The to quality we and coupled services through products. these along to PRO XX% the and to our operational We PRO with continue

performance was XX.X%. or also XX. margin Our investments digits and and partially the in higher higher volume, with million XX% selling Turning Operating quarter, year. comp incremental million low-double of commodity well strong to operating costs Sales up $XX to first Slide DIY the quarter. $XXX grew a expenses quarter and This by by in future XX:XX along growth. the variable prices performed driven offset was business profit net was last drive in against

we We by working our refine also of and execution, of Net percent million approximately delivery material. as be deploying percentage receipts levels, cost aggressive executed Our the million. our billion deploying at is focused from share transaction. turn approximately with higher delays debt customers, provide share we QX sales expect repurchase $XXX continued XX.X%. these this and creation months first in capital balance yesterday, balance times. guidance Concurrently, form $XXX review this, XX:XX four share billion our Finally, inventory sales now quarter outlook, With April of X.X our capital term of approximately repurchases. we liquidity. year. of quarter an repurchasing through of to in the continue demand in the due for our as to EBITDA inflation a XXXX. sheet the of group current This one-year credit To facilitate was Despite increase sheet shareholder on to repurchases stock full $XXX accelerated and of largely $X Slide meet $X.X an we ended from anticipate maturity outlook additional the anticipate percent facility a We loan was approximately focus million of at of elevated of $XXX year, previous Working million to our inventory $XXX extended the banks, the our to the years year-end. to for in strong. to three XX:XX to of revolving liquidity shortly, first during for to repurchase our the XX.X% a XXXX. by challenges, levels let's value We XX million

X% to sales of margins growth of now excluding operating XX% pricing of growth be in of to actions anticipate excluding X%. favorable to to Masco We currency, In previous up be outlook quarter in foreign our markets, our X% foreign segment, XX.X%. previous X% now range for to the XXXX up from year currency expect of XX%, in we our expect full Plumbing X%. and year strong range our sales the full to from for to guidance X% guidance the X% Our XX:XX additional first range performance, we

in guidance current sales Given full $XX X% million. approximately the of XX:XX foreign we be range segment, XX%. XX.X% grow to from is unfavorably XX%, In to of to by Architectural impact currency the range XXXX expect XX%. XX% previous of up plumbing the rates, anticipate or year We Decorative will our expected to margins our plumbing in X% to revenue exchange

mid-teens. from of high-single at increase previous from to And margin up we paint architectural be Looking of specifically to previous year currently XX%. our to our XX.X% DIY growth anticipate full the for PRO up low-double business anticipate business XXXX, digits. guidance our guidance digits, high-teens approximately our increase We decorative to

pricing amount As recover only typically we actions have dollar previously discussed in this inflation. the segment, of

all the As as Finally, EPS $XXX cost XX:XX growth count from the range. $X.XX, to in average dollars else compression. Keith earlier, at represents for neutral operating mentioned XXXX midpoint a full estimate $X.XX equal the action, This results pricing year. million but remain of which diluted updated EPS result, share recovery our the is XX% margin assumes

Operator? With like the call the XX I Additional in modeling would our call for assumptions for to Mary, on found earnings we'd XXXX to up deck. Q&A. XX:XX like can Slide be open that, open for Q&A.

Operator

Thank Evercore [Operator line XX:XX Instructions] from Our comes you. first the ISI. question of Stephen from Kim

Your now is line open.

Stephen Kim

results XX:XX Good Great. and guys. Thanks out much exciting the very times Yeah. there.

again, with the appreciate we a little year more PRO get you the guide -- to you're said business. the here. we specifics up for doing way could around So the that of in of bit you I wanted terms the you're your what business guidance XX% raising see, in of PRO-side if the

bit so business more that we services retain little going strongly a frame could you this customers. us and this so wondering, around is programs comp granularity how to new year? later to can alluded You to if I give was those that,

Keith Allman

for the question, Good morning. Thanks Keith. XX:XX It’s Stephen.

overall highlight customer think as important and business, very with is Our begins achievements the the it and business to the the well consumer quality consumer satisfaction it the PRO well our I that doing as we've strength the can it's the perceives made and the regards side. of on with how with brand, to

consumer based investments. real investments on be there those in long, we've made So strength for channel, of that continues the the time strong long to pull-through a the

we've but Behr and and loyal base in have through the and in think that. outstanding loyal done focus decades. us R&D they've we strong and PROs to selling So kudos the with I XX:XX And for been the and team the very supply with factory, circumstances. our only we're appreciate they're consumers difficult a very us and not job supply to the has had an it very very begins and our chain execution with the sell to paint that and what good we're

of to in give that and us to programs of really success our our raise PROs service a more that to to and innovation. obvious into we're us is developing wallet to driven lot and going developing they we've programs get their what core So share drive and Behr as then we're of had the In is strong get continue are XX:XX add strong those terms I'm the they targeting. we that PROs opportunity our more give continue the made confidence and that, and like of stickiness We've really hands frankly, launching what's our can. brand paint in that's to we're guidance. of get new rewarding reasons, on continue to to to in growth maintain wallet but the share paint as not to that for help into the And to our customers more details to hand. in us customers focused much who execution do and

Stephen Kim

XX:XX can are And sense second we are -- in rolling these should or to this for, these which quarter? those be us full terms or you currently year, a force? -- quarter give would timing programs I that, expect now on really Keith, just of you like third when at out

Keith Allman

-- I've frequently. we've talked XX:XX As about

and technical representation we programs Depot jointly continually the loyalty I to an and and the with evolution to to at Home the execution and with we and in this in experience our better and our those do types been like. -- for high-speed growth what tempting delivery what field past job the it we've site look in-store programs the think PRO performance we the be steady of delivery how and of make reps done side to advantages what new to programs, future the develop and and of regards where able indication has our that is service launch we've to best we do been on

be of to of There out. So and continuing it's we that be it have continue really program. as we combination the since things the will new and roll will -- a happening start on we will plan that that happen and now are things

Stephen Kim

XX:XX Okay. luck. Great. Thanks much. of very Best

Keith Allman

XX:XX Thank you.

Operator

from XX:XX Barclays. Matthew Our next from line question the of Bouley comes

line open. is now Your

Matthew Bouley

Thank taking for the XX:XX morning, everyone. Hey. Good questions. you

rest your related to the I more probably of is and Russia knock-on like Ukraine European the small, sort sounded demand. it to think So, but direct investor is of concern effects the relatively to exposure

thinking guys the you are result you. how as everything business there? rest Just sort Hansgrohe Thank Europe, going just a in of to of the the impacts about of that's on

Keith Allman

said XX:XX of in it we relates we to as demand As EURXX million countries, ceased those remarks, the exposure low level and prepared operations there. relatively call in it both

Our those or and two not with inbound will, base, if supply supply our does interrelated chain you anything have countries.

oil I carefully increases watching in with would conflict. the to impact. is no impact we're the direct regards obviously that related indirectly say really, were we seen, to there price have Certainly, very some indirect fuel, believe we So

stands it main strong. the strong do of our traffic, really and continue demand of Europe, continued consumer in a detailed to the volume we demand as consumer a amount in our Germany, our As robust now countries across significant to be see the UK where remarks, France, John we be of patterns to highlighted continue and and that's health

not indirect very knock-on continue do So seen so. we carefully we're we and at to this will that the effect of point but complex, obviously, any watching have

Matthew Bouley

second side is of in business on you on access that, you. talking way, then be of specifically, market sort for raw have the dynamics should question you've the about it. to spoken we Thank another material aware is participants And got industry any paint competitors that just again, if multiple specific anything obviously, emerging to the Got gaining PRO Keith. one competitive that we Thank to about there on just, front? supply XX:XX should pricing as and share think press

Keith Allman

When regards look XX:XX in what don't other I to anything competition, we lot. than with have add respect our Yeah. to particularly color at we've I our more them, a to made comments. pricing,

on no because about competition, good that as question to We we think have pressure degree, are, of as us. is there the large And it. we’re a great put they I

that, on strong, With this that we capacity I market confidence third-parties. the on a changed. kind We've you that I view welcome think respect outstanding confidence brand. the see and incredibly customer certainly that and is And reputation them. shakes own our the to I and from in So wouldn't as strong out We This Masco's more have of how have guide business. if confidence we share main just competition fundamentally do their we have regards becomes didn't realigned, that we've quality. fact is this based XX:XX got our service for is outstanding reports

our So and with. We've we have our our strong strength our of suppliers. paint chain at Behr to and supply the begin team and demonstrated team

recognition to much that in and when strong it's position. So a hard of great being and continue wallet new tried able kind as it’s into have PROs we've painters feedback, get us to see a good. that of to the to got that team put thanks us very to so continue supply with hands, more keep those product share of pretty far, great we And intent opportunity paint to the is for to our chain and of working work our is And have we that positive.

also but as confident in reflected our very business extremely the competition, respect our paint in So, much guide.

Matthew Bouley

that, XX:XX thank good for Keith and Great. Well, luck. you

Operator

Lovallo line comes of Our from the from UBS. XX:XX next question John

Your line open. is

John Lovallo

XX:XX Good taking morning, my questions as for Thank guys. well. you

sends you on factors to that, strong first it of the they're definitive, [Technical positive that a timing The very [Technical fairly going forward sort I go think with with led the very to that? decision one and the ASR, Difficulty] to think which Difficulty] that go I message. is are forward

John Sznewajs

John. It's Hey. XX:XX Yeah, John. Good morning.

right. You're

when at million year to right. reason obviously, that repurchased time that. we entered seen this this, this liquidity, into working and looking we've and fact a as term loan we of by We've one-year $XXX at capital, -- price at out the the way heavy good date that The value seen indication got [Technical yesterday we creation, retreat this we're the looking to That we ASR we of little was pretty a this transaction. this maybe Difficulty] just the are additional because for -- We loan comes took the it we year. a for bit share needed down

be if to in see we've So we business is our developing the the because of right the a and environment. where use to share repair, said in realistic this and repurchases think we're see is We one our be pretty sheet remodel of more see view would think we said little this feel aggressive we dislocation but XX:XX our opportunistic, And to those that further rate a share the time even shareholder we also times. little enhance a share on and of appropriate balance a strength bit we it's price, value. to be and that how continuing program would we the always market bit saw we rising repurchase as time to put programmatic,

really pursued so we that's this transaction why this at And time.

John Lovallo

would sense. of Yeah. That lot XX:XX a makes We agree.

the then on have of plumbing chain? shutdowns and what the to forward And Okay. China. in what going with lot componentry relation coming the the supply of you done see Curious, a supply out Shanghai chain

Keith Allman

watching sure. important for an It's thing XX:XX that we're

the Beijing to source growth as on come we out some market do, And underlying expect be but supply And -- to date, to in and still challenges million as of to to in will continues first we and been that we both had our We've Shanghai good that, we with while -- as in it. of general roughly to of the do, demand have We're really, feel with China, be products about employees to going time. well going of do there. currently in terms we that we're it's that demand coming their to China, about haven't tough the be effort say As of in well, for safety extra okay able a okay. aspect manage challenge. happy chain, China. concern the China, out $XXX require lockouts foremost it that our able of ensuring and I'm in the and special and

due expect had shutdown those that it we to significant to coming of haven't We stay cities the issues and out way. two

John Lovallo

XX:XX Great. Thank you, guys.

Operator

next RBC Our of comes from from Markets. question Capital line XX:XX Mike Dahl the

open. line Your is

Mike Dahl

morning. Thanks questions. Good my taking XX:XX for

I housing improvement question, some alluded of mean first The and obviously, home the and potential with puts kind to the how of takes involves.

seeing else whether and evaluating Spa anything trends. in Could maybe softening you're like if about wondering, kind positions I'm some more terms how or seeing -- watching discretionary or you something your you're through consumer business environment? of come taken you're of any you're leading-edge not at most in So whether sell-out you're talk of looking in what closely this

Keith Allman

there XX:XX to demand as -- I'd this Mike. bit hot call expected the We of tempering past tempering in some better a white bit of things, little point in little quarter XX of months. than is the a about we've couple months. that we've seen from it, was seeing expected, are last XX we demand We've seen quarter and while what a talked the last

strong. still it's However,

view driven range. trend expensive and evidence. but as as in spas to spot discretionary continues a the strong by it in wellness of XX the whole that week the COVID. that overall are mix And right continues our shift in be but willing housing spas, to a we're driven the seeing to relates item, change view our sales not We in that be of backlog the of material, backlog our consumer little spend very to sort seeing There's -- the really bit the nothing home by in of where any a

We're XX:XX our doors, well. sell seeing expensive So which Hansgrohe that's sell systems relatively and shower strong. to our higher end continue are continue to shower well.

strong down, the of we're we've what decided in consumer. this strength mix we don't to So, first our which the real and because no seeing again, do the all we backlogs why feeds traffic, like quarter good change into typically guide and

John Sznewajs

quarter. any Mike, I didn't of to balance We see change product just XX:XX comment in quarter pretty sell-in, what that Keith's is, the all was during whatsoever the significant add across actually categories. would through in terms sell-through,

Mike Dahl

helpful. that's look cadence, around there color your you segment question, up very price on but price a My understand more second wanted then price of cost dec the when be headwinds margin, in cost for dollar favorability for clarification both the you Thank would that we but at catch new ask of to in cost not there arc for recovery, and That's and Okay. about basis. consolidated been be little we on thinking are certainly in back percentage those XX:XX expectation Is margin what comments great. second recovery the on comments. just incremental a how guide you've neutrality, and an for year full Just quarter should terms half? because seen, that second always i.e.,

Keith Allman

quarter to continue XX:XX second we We price and expect exited in the quarter. neutral the cost that

don't we our maybe we have customers right that. supply commodities going on go, ball give the bit hasn't work but price but to don't for choice but are that's where a little our where as need continue know where we our crystal our productivity to intention we first go, drive and a have Obviously, price strategy as to with and increases see of changed. take think you needed. Now, We with we color to to to and monitor base inflation to, the if and we John, our impact, and to minimize is going

John Sznewajs

the the you inflation in continue to inflation on some what [indiscernible] XX:XX give particularly, in across seeing a we're cost just persistent inflation. color more terms we maybe across freight and see of Yeah. persistent portfolio, Mike, little

year. last been the costs, stable quarter, terms so input including range materials, increased of continues. the In course to kind the of the pretty high, plus. over has packaging to mentioned start of copper has since but zinc in freight raw resins In the the paint escalate. fuel say pallets so XX% that and that TiOX continue of Like, remain is I and inflation I'd continue And inflation of

so And we little a year. impacts of the for our that gave that margin bit guide

of weigh bit plumbing little see cost the on in margins. So year. will back in we cost a But will think recovery particularly recovery the we then inflation that the because will but in see half half mainly the segment, paint back of expansion bit the margin coming, we our we've the -- little got on incremental think a in

Mike Dahl

Keith. XX:XX Thanks, it. Thanks, right. Okay. John. Got All

Operator

the line question XX:XX Morgan. Our JP from next comes of Michael Rehaut from

is Your line open.

Michael Rehaut

for XX:XX Thanks Thanks. taking everyone. questions. Good my morning,

back around kind demand which or out consistent to bit is always over January, points quarter, couple different March that during if around I First, in get we've little sign. there's of April either anecdotal. across with curious a and February, differences be was on about past Wanted of you demand a wanted your chatter been any the earlier to I demand good robust kind at backdrop sell-in, and dial trends that the slowing I in to sell-through take said dec your remaining of experience there may just parts months arc? is believe different noise heard the plumbing

Keith Allman

keen month not on I'll remains. Well, and changes in talking we XX:XX that we've the that quarter about strong tell you exited in April. the

international, North we and In and breakdowns China, America that talked different we geographies, demand strong of And being of international. channel strong very across In but most broad-based PRO really our and terms about demand and saw continues. we've our Germany. in growth of demand where particularly our in saw

of gain. strength spas and outdoor that's our with Continued that share in and it's in size down the And quarter historically the say high We indicative pin we of feel growth that's any one in think remaining systems quarter. fitness those difficult to strong. consistently the propane market while rates

just steady that the So pretty was the demand strong quarter continued. finished. through exited We've and we that

John Sznewajs

on give coming that color I'd little quarter less impacted January holidays as January, is, out XX:XX more in were bit was people point so, perhaps developed stronger, and about from if COVID got Yeah, perspective, a a year-end of so, quarter a Mike. color. just quarter and the by COVID bit how The help think one the evolved things terms as you the additional into a little so activity the into be in but that of bit maybe you and little out February March, you

Michael Rehaut

with equal segments appreciate sequentially, secondly, just typically would -- be I is XQ, and too moving in thinking margins the any the thoughts all I that and but helpful. across arc there's want keeping given price I XQ plumbing we versus should dollars think different kind then of you're environment, you broadly to into guess I'm lag quarters, would obviously, inflation. inflation kind XQ when dec you the incremental catch-up but that. to neutral in against think think I else the given margin with the offsetting the basis shifting both much pieces, that, that front weeds the of very XQ that be than about price and pricing back Should on here No, it think, type don't XX:XX cost perhaps half speaking, or sequentially, perhaps obviously, dollar of about lower helpful. slightly a get I on know we more being appreciate the of cost

Keith Allman

XX:XX Yeah.

a you Let helpful. on I give most bit of think would be little that color plumbing, me

see things call improvement and normalized P&L As costs first the quarter. investment our spending et it, expected, this we we first in saw through cetera., was the higher significant head a the offset level margin chain such and our pricing partially sequential initiatives, in and by marketing quarter, commodity supply plumbing did more and count, In actions. growth flow of a

to the year forward. hence, margin in the playing to expect improve out will year. going year So guide half as forward how improved relationship talking relationship we expected, here, the each XX.X a continue as of in of In in plumbing about nicely rest price for cost for do of and plumbing, see quarter, the we going the we to first XX:XX plumbing our in back plumbing terms the the result, will that the And see improve year-over-year expansion and quarter in XX.

dollar on look there when at Architecture, for main the think you that. impact the pricing Decorative relationship story in is increases the between margin I

John Sznewajs

about generally, other about, QX the QX, think QX Mike, you to XX:XX if strong to sequential think quarter. volume our is

may QX, as help terms in of the and price well. the side So volume do we margin from generate more while cost a margin some should which on be in we facing lot headwinds

Michael Rehaut

it. guys. Thanks Great. Appreciate XX:XX

Operator

from XX:XX comes the Sachs. next question Our Goldman line of Susan from Maklari

Your is line open.

Susan Maklari

it upcoming Thank morning, the that just your even year of we last across Do the segments. about question is, the a came of though will quite of business? When expect comment. of sounds across you off with like quarters Good we your into kind everyone. think sequence you this seasonality, and XX:XX first both you. My normal see strength building year the bit

John Sznewajs

anomalies year. of And back against reduced XX:XX comp Yeah, of half probably back up obviously, I QX of then, seasonal which XXXX growth second first we're the would the faced sorry, expect stronger that there were our -- comps we the softest we pretty ‘XX, year, half half in up sales will kind so and the last being and seasonal tough be, with second of last we quarter through I'm quarter our be QX the the apply. and That the of the then traditional the how the year. seasonality comp A quarter tough ’XX. a issue that financials obviously, couple the comp would of the the over traditional this course this selling. played QX against expect in Factoring Susan of of strong said, of pretty years, QX. to in pandemic of seasonality

Susan Maklari

side. then paint That's helpful. Okay. is on second my XX:XX the DIY question And

your too. increased also guide there You

growth are as the and paint? digits suggest continuing much kind higher that established think, from margin that's people at in just that of to of housing that coming mean volume off and but the business there, than we through out of as of you sort is can the that trends because more year for coming that, pricing think look does enter a low-double And underlying people what terms digit across sustainably level? a the business younger trajectory a mature you a high-single much I about think does especially, operate homeownership, that

Keith Allman

to that the to puts we've that thoroughly. XX:XX you we market with DIYers. and to commodities of that time demand. on We at margin with millennial that with forward market. research as it relates regards to size hasn't knowing begin that stabilized number to escalating homebuyers point extremely With and being believe think it's margin, they particular that business. think the to would definitely that regards XX:XX it really as -- that at coming And pressure in help Conversely, very that's in and margin. us, environment a cohort our seeing those and first changed, entering as helpful the the as for abate component stabilized and mentioned, We in it's it's we our approach commodity DIY overall to margins relates your question our good are -- an looking an cost our the this that And discussed

in dynamics that this pricing. at the how look perform business So our I range of margin you for those right to is of think, guide expected the if with really is

Susan Maklari

XX:XX Thank Okay. Good with you luck much. Great. everything. very

Keith Allman

XX:XX Thank you.

Operator

Fargo next question Securities. from from XX:XX of comes the Our Raghavan line Deepa Wells

Your open. line is

Deepa Raghavan

increase Good for to Hi. Thanks guide. my everyone. XX:XX morning, Nice the taking question. volume

And the there? volume there full-year the guide Just price split some is higher? higher, full some, curious of time, versus would volume price both helpful? or is is can not it price Is be what's that with in most if volume volume organic I'm full-year in sorry, growth point in at in driving it, that this the the year of also you us mostly provide there

John Sznewajs

Yeah, It's XX:XX No. Deepa. John.

that's a it's volume you're year. of price both our the terms driving your question, combination In growth and organic for absolutely, of

this breakdown price across the our to specifics breakdown we volume, the you two of be not volume as of going At terms of for get price the expect this but in In of volume. expect more and volume, this growth point, price to it's year, do environment and the components the might segments more, year. inflationary into we're of both than going

Deepa Raghavan

XX:XX Okay. That's fine.

you're margin Is that if is continues, are seeing guidance only you're guide, that you're within? baking just baking In clarify, terms of cushion to or see inflation in there the trying there also inflation so margin to correct? further and you inflation lowered margin just any square some future far, to risk that assuming, in

John Sznewajs

market seen conditions contemplated experiencing current beyond changes the our to where in the guidance. materially say, not of that say of something question there the here is I inflation contemplates what Deepa that is if guidance terms would Yeah. in XX:XX the that -- the in that change kind foreseeable and we've first inflation quarter we is I'd are

Deepa Raghavan

XX:XX Thanks the much Good very luck. for color.

Operator

Keith Hughes Our the XX:XX from from comes question Truist of next line Securities.

is line open. Your

Keith Hughes

about count year-over-year? of inventory, bet changing of schedules inventory of could inflation, you what XX:XX a production talk year? kind like remainder for this units year-over-year, view what's And Questions up is look about the if the the on much good any is

John Sznewajs

Keith. Yeah, XX:XX

products. we're input the could is In number inventory -- are more a at product the particularly seen on a higher. we we instance, what and like inventory side clearly the right, took we've still was procure inventory, there little -- opportunity this or terms for chain, inventory of we time inventory Two, that were, it there bit point of that on and on higher upon in secure buy to them one there here, because more supply of were you're hit or some were more inflation some of changes touched recuring safety raw you of of of if paying advantage materials, component the water be caused the levels been stock of we'd of things the levels drove our

terms good We or year. we like not position of change an prepared and changes to more a in do production. a exit we high, as feel at we're do inventory how normal I that does on in it driving all. much from can further Not year the think producing we're XX:XX really. No, remarks, our inventory of inventories in any As down as the we our stage we So progresses it has the is mentioned get level that XXXX. level anticipate

Keith Hughes

Okay. XX:XX you. Thank

Operator

Shmois XX:XX the from Capital. Our next Garik of line Loop question comes from

Your line is open.

Garik Shmois

XX:XX Thanks. Hi.

is on your material follow-up participate there If with to channel any opportunity fill so you question. suppliers? any a customers the inventory for Just

Keith Allman

POS. see the we we there, sell-out talked the matching As sell-in the earlier XX:XX roughly

think we have the channel. relatively the in So stable been inventories

have like in the would others channel to spots, upside that a we as we've more of be. quite better. for in to catch not where Now maybe bit would so going slightly forward it's we'd bit I little inventory we're up I say little represents channel, been And able like a and to think that fill frankly, getting

Garik Shmois

just the in on guide? or then clarification And and XX:XX that Got $XXX the from that the M&A in the is guidance it. million separate a for ASR, include you have buybacks that is

John Sznewajs

repurchased XX:XX the $XXX we comprises included if the $XXX No, you and million $XXX about. that in contemplate the million or the think guidance, purchased so then that the that you year-to-date we're -- -- about million we so ASR total Garik, that's talking

Garik Shmois

Got you. Thank XX:XX it.

Operator

comes question from line from Baumgarten Adam Zelman the of Our XX:XX next & Associates.

open. Your line is

Adam Baumgarten

XX:XX Hey. Good morning, everyone.

Just impact little earlier a of a a question, mix in mentioned call. the bit you

a comment been elaborate on have around may it think trade I potential Can down. just that? you

John Sznewajs

as higher of projects perhaps mix fair bit misspoken, mix fact pretty Hansgrohe's of projects of to we've I some and and perhaps with XX:XX in the lines with higher priced Yeah. may seen has in do favorable do good we was up anything in if Adam a Plumbing little international some it a seen recall, in Europe you segment. We've And those we in products. of those amount the think that our some the quarter. growth of spec over

Liberty in mix. And I decorative so segment that, businesses, and our see some shower so were that's did we mix. I area some some Hardware think other selling improved one the the paint architectural shows of outset of and also saw some like which mix They favorable favorable doors things

Keith Allman

significant a through with and on, really we impact XX:XX add clear, to a forward expect the And as we XXXX. way, little to be to just mix bit be look to -- regards don't either

Adam Baumgarten

just to margin gears to XX:XX then Good Got And on hear. plumbing switching it. side. the

in spend should Just headwind full the look margin the some for curious how much of variable like that of what quarter and year? was that a

John Sznewajs

much wasn't headwind, XX:XX a Adam. It of

that with In for future that, been can sustained we're putting future spend some experiencing terms and as some we the just in levels of that investment incremental -- of invest current growth into we've growth.

significant a for be would that or the impact, think don't I quarter so year. the And full in either

Adam Baumgarten

XX:XX Got it. Thanks.

Operator

from comes Ng question Jefferies. next Phil line of from Our XX:XX the

Your line open. is

Phil Ng

year ticket we're potentially inflation mean should on quarter. guidance. all just far nature your guys. the there really there? nuances, with the I resilient, certainly, comp smaller Congrats strong you housing the be some is Hey, lower but know on some the given Appreciate of in see XX:XX profile more business at pretty we're the up softness do some a update maybe How the consumers demand but least, I shaping turnover. seeing and of kind out steady. hearing

Keith Allman

this quarter we've continued our As and consistently remained and strong our across call and with and across is confidence. channels price steady demand regards through solid points, geographies XX:XX to broad-based talked said as about our mix, so that we last across

on managing housing up on when it factors that's a very the And demand our of your number spa chain, the As is backlogs to are strong, XX The a And remain supply tailwinds international driving weeks, strong do at and to things look those us. price and to year, add markets sales, set you the And then to strong complicated able offset we and years home us productivity number. call issues. millennials into through that all us. for propane factors getting a been stock well, structural sheet, to set coming very that, the productive a a are appreciation, that for this and balance home several market, really this performing price existing are relates well. of the for still doing think while consumers the we would cyclical inflation that age of around is we that's it's we've comment backlogs extremely

good and looking backdrop. ‘XX the we're through like So we

Phil Ng

of perhaps component. lag a P&L movement through Keith. might how there from standpoint, a then ripples raw in just color, great your because this, be just that some That's commodity you're of John, that XX:XX the And material kind appreciating buying curious,

effect think where getting XX ability, your inflation? few P&L? margins understand we years appreciating now ripple last that right in XX to is it, your when help there with the to So some longer-term your us through perhaps And then call been it's noise back

John Sznewajs

XX:XX of between bit mean, our and difference in Yeah. refresh It’s P&L. give the we how flow I memory, through Phil. commodities everyone's of segments. just hit you little terms a two

terms P&L. supply the So, of particularly kind through saw last zinc and and XXXX, year that impact and copper about directly completed length our saw bit quarters for segment, in as given of our a And in kind the little to the a ripple in Plumbing you two takes headwind any more of chains inflation margin timing that year. of shorter, to it the of I'd hit of the the half XXX or Decorative a -- that's well, the back of P&Ls of bit order bit that a because little so the In supply are XX in to segment say so. Architectural for shorter as and chains days of kind flow magnitude our through XX:XX

So we feel good about that.

right segment, our we're earlier, now. And forward in look say, there inflation. we has dynamic over the segment bit the then beyond unique get would just and XX:XX could maintaining business, to some works alluded contemplate seeing recoup businesses on margin a rollover, little As pricing that commodities way in of inflationary a this regular put different of This we as through see math inflation bit see of a on of paint In potentially basis ability because on particular, only as will that our longer in Plumbing expansion some term, a been the I margin and we there they the inflation that. in period, Keith perhaps margin. amount bigger Europe is because it's to the

so, And we of take as be to that inflationary might of we did place environment. out this able some see

Phil Ng

lot. XX:XX Appreciate a color. the Okay. Thanks

Operator

the Wolfe from line Truman comes Research. question last Patterson from of Our XX:XX

is line open. Your

Truman Patterson

John, XX:XX my taking questions. good Keith, for and morning thanks

regarding of shut with the the hoping John, either I raw you XXXX -- there specifically, an chain the state cetera. the but in an chain just of realize or give update update downs, supply First, China the I the parts et in on States, in could hoping early was give moving supply union material availability, U.S. transportation, you can late United is ‘XX, versus some labor

Keith Allman

XX:XX Sure, Truman.

seeing Labor place. of anywhere good margin the terms In was are, [indiscernible] on the the terms on taking on we're of improvement. supply of -- of starting or -- tightness say, see material We where the chain. to it location. would supply we're the of in issues supply to Again, those depending supply near and is I the some we're either it's aspects seeing things of chain labor. margin back

We've that on very plans look depending variable, -- but are So, happen something little still and labor think changes, a from watching ops outbound America. we -- North they the say a to area overall, It's would we our shape is very is that's position. but probably drive freight we're which that modest continuing in that XX:XX teams pretty shipping we're at it's to in continuing to most closely, are freight./ very good I and both bit seen be. inbound tight closely closely we're one but

Truman Patterson

structural expectations XX:XX long history Have that prior how Okay. and margins. And inflation pretty final been just or imagine hoping can Delta periods? make maybe that. of margin then, elevated Thanks the compare notable of one, periods have outperform there you prior compared your XXXX, current operating period to relatively and XXXX for you all has contrast a be, may performed. of Plumbing any shifts I'm you

John Sznewajs

well of At company question. in-base leading down pricing I Yes. both talked volume your a about as the inflationary all tell a not in, the terms I same terrific periods, true we've and innovation is and an mean driving what we said, of both a on the issues their to future XX:XX necessary in the this top job while just and a long are we I'm obviously, are perspective prior brand as Delta’s got balancing a Ken there of that terrific so and they team sales, driving from we’re right. seen team doing is profits this, you the chain That they historical is supply actions, absolutely taking there team would driving of of business in are comparison. like down time, long, driving Delta growth. and haven't the an tradition the It apples-to-apples In time, metals sure. terms environment in

you Keith, else dive? So to there's anything I want don't

Keith Allman

cost products is focus of to of remains this terms increase XX:XX then employees foremost, I at the both the we're to and in for which make set our the increased the customers safety our deal work unique a magnitude which in best sure, the sure we together us. and to our this our is price. on best the and cost And first can of strategy think, situation with suppliers delivering consistent at our with speed

And as past drive above John to have the sometimes, some and particularly that going method in continue and operate increases price in situations as we growth. we're like it that. to and to market up said, in this, And set obviously, the requires, continue to significant do team,

John Sznewajs

XX:XX get driving inflationary through we across tell will team Yeah. that outside volume guess would this I once that would and environment, you businesses. we're our so our expect the productivity is typical it, I expansion drive initiatives growth of I margin

outside might this of a an little I think bit of cadence anomalous of period, that, our So we be once will get activity. return but we to

Truman Patterson

Thank No. you, XX:XX upcoming All right. year. two and luck good on the

John Sznewajs

Thanks. XX:XX

Keith Allman

you. Thank XX:XX

Operator

today's call. This conference for you participating. XX:XX concludes Thank

now disconnect. may You

Masco (MAS) 27 Apr 222022 Q1 Earnings call transcript