MAS - Earnings call transcript Q1 2024

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Operator

Good morning, ladies and gentlemen. Welcome to Masco Corporation's First Quarter 2024 Conference Call. My name is Lidy, 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]

the to turn Zondervan. now will call Robin over I

You may begin.

Robin Zondervan

Keith and operator, Call. Welcome are President CEO and good Masco's to Officer. Rick you, Masco; With President and of Masco today Chief Conference everyone. Vice Quarter morning, Thank Westenberg, and First Corporation's me Financial Allman, XXXX

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

If questions. we remarks, will take at with open Please analyst limit we for question directly yourself our now, Following one question call follow-up. can't your me please one to the call XXX-XXXX. (XXX)

Our materially our statements. and statements in these that performance, are today from actual that other about These which Commission. forward-looking and We and risks to factors Form our our Securities uncertainties XX-Q our and uncertainties in statements future will include subject Form risk the could Exchange statements. differ constitute and to forward-looking disclosures cause with views risks our our we filed XX-K described results the

Our statements financial metrics. non-GAAP also include will

are under operating noted. profit otherwise will on as and share be and earnings to slides, per website in earnings unless release presentation which to adjusted our our reconcile adjusted, GAAP Investor these We Relations. references metrics available Our

call will I now to that, With turn over the Keith.

Keith Allman

morning, Thank for joining thank Slide Good and you, us Robin. to you everyone, today. Please X. turn

start strong expansion we as year with reported of the prior pleased growth EPS and margin to compared operating quarter very profit our to I'm year. another the

focused our share our innovative on and and of and strength by new were the with of driven execution growing customers, brands. our results repair market remain product We products, improved remodel the engaging our launching building operational solid efficiencies, value by portfolio. Our on

overall our Turning company to performance.

Operating and with Volume our top Our actions X% recent basis grew year. SaunaXXX, line net the by of the down the the partially offset was decreased margin quarter XX.X%. which was quarter $XXX by in to impact acquisition expectations. which we profit of third $XX XX the improved million points of of X%, X% prior in in operating quarter, our pricing finalized million and to in dollars line

our cost a offset volume. in partially performance driven by initiatives price favorable improvement operational by was and relationship, savings lower cost The primarily

earnings X% $X.XX share. Our per per grew share to

Turning declined to the Plumbing and million, our sales excluding operating the decreased margin $XX North was sales including X%. basis Plumbing profit for acquisitions. overall up to X% local decreased XXX segments. favorable X% In acquisitions. $XXX and impact American segment points In of was Plumbing, up to sales X%, Operating million International currency, XX.X%.

to addition continuous businesses products that on our both our developing Plumbing remain serve of In focus on International our North new excellence and focused and American needs and customers. innovative operational the improvement,

products later Faucet launching Brizo showcased the a offering Bath the are example, Delta in showers, Mystic Plumbing, osmosis Kitchen year. and online, and American North new tankless of water in expansions system system, and several February, In including Show Industry and cross Category for all this headlined at multilevel of award-winning the reverse several by held steam steam brick-and-mortar filtration Bathing a shower retail which in

in spa provides communicates spa feeling water. smart continues automatically ownership a Watkins natural in breakthrough superior clean Watkins our the adjustments Wellness, a leader experience that tests our maintain with IQ, innovation recommendations Wellness makes to the industry the spa system FreshWater and customers market. needed In an monitoring of your business, water are legacy and This that launched technology when

customization simultaneously Furniture Fair, options C Shower the including international service new saving Plumbing These Axor water. control Select In bathroom global segment Hansgrohe signature to while innovative the business, our Hansgrohe's brand Axor of to share. demonstrate global temperature Citterio With and to products, strong ID market brands, our recently continue collection, positioned technology. products energy Axor solutions, at continue with products well presence and presented our plumbing premium and design a is variety bathroom gain the offer innovative which Milan

both Sales our Turning were flat paint by X%. our Pro the for to Operating points sales Decorative declined DIY declined customers. partner, operating paint to next XX Architectural further remain Home basis gains Depot Pro paint the DIY closely In on focused margin and segment we $XXX with segment. to year-over-year. relatively share to and declined million XX%. $X paint our business, with profit drive working both and million,

the focused site in delivery on quarter, services of Behr This exceptional additional States, into availability to loyalty markets the across included Pro sales United job needs meeting providing painter. and force programs. the continued brand Pro increasing During invest the the expanding

Additionally, stain third-party exterior leading quality was the recent in #X in and study, in exterior demonstrating interior Behr a and #X brand. #X in rated paint exceptional quality our paint, Behr of strength

capital Moving to allocation.

remains strategy unchanged. Our

through million we repurchase shares shareholders payment for the a million million. the million returned to X.X quarter, During $XX $XXX $XXX dividend and of of

remainder outlook of Now XXXX. for the to turning our

largely expected, adjusted in will share per to range With $X.XX be beginning continue per year the we as $X share. of earnings the XXXX anticipate to that

per on drive cost a flat growth disciplined us help and and operating will initiatives, the to margin operational continue expect earnings we XXXX. improvement in our top While share savings line relatively efficiencies year, for pricing, focus

current the monitor we levels. rate of in cuts to remain changes confidence data, of remainder likelihood and inflation the cautiously optimistic as consumer For year continue the interest year, we

portfolio staying housing longer, operational and to of repair drive to age term. capital fundamentals, continue low-ticket remodel these our stock, structural equity repair increased value are that continue the long consumers We believe we drive as the However, home levels favorable shareholder strategy focus activity believe the of remodel creation. and will allocation and products, our excellence repair disciplined remodel our homes over mid higher and to will our on such their and strong and fundamentals in markets of factors,

results outlook in Rick XXXX Now through first the more I will over quarter Rick? the detail. call to turn our and to go

Richard Westenberg

Keith, Thank for everyone. you, good and Thank morning, joining. you

Keith, Thank you and you, joining. Thank morning, good for everyone.

of on onetime focus items. comments performance, rationalization my mentioned, impact other the adjusted excluding will and Robin today charges As

the Turning X. third of Sales acquisitions. the quarter quarter to or in sales had last X% American in X%, X% quarter year. first on local decreased excluding decreased SaunaXXX of our In FX the impact a favorable year-over-year currency, Slide our North decreased X% or results. impact excluding acquisition minimal

SG&A efforts sales international was expansion gross was performance to employee-related by of sales sales, Despite a of percent currency, in margin our well operational the impacted lead local XX.X%. including In XX.X% basis incentive compensation. points our drive price to continued as X%. XXX as efficiencies and quarter, helped decreased lower higher cost as to costs

basis operating favorable relationship, profit margin offset points quarter, XX.X%. by operating and our price and profit and partially lower expanded to cost margin the in was Overall, XX This cost volumes. performance initiatives due a primarily strong grew X% savings to

by We per EPS the during share. $X.XX also grew X% quarter to

the Turning and X% of to Slide single-digit reduced and X. demand China. in acquisitions. Plumbing impact Delta by was of line the Faucet X%. mix currency, quarter, Plumbing local sales Plumbing decreased revenue key and American excluding in Europe our wholesale in sales sales acquisitions X%. favorable International X% had continued our markets This Lower channel. low in decreased decreased volume soft strength however, quarter, the partially decreased growth achieving In by with expectations. of pricing solid X%, sales North positive of by driven by X%, X% offset another driven

price operating the This XXX in or improvement and profit profit basis XX.X%. by savings relationship, $XX cost XX% by operating driven mix. up operating margin Segment offset was points first initiatives cost lower to a expanded partially quarter favorable million year-over-year, and and volume was

Architectural low sales both business lower relatively cost to in year-over-year DIY decreased digits profit expectations, paint for we XX line was down and Pro sales primarily last and This our and our in was increase X% with Turning operating first consistent to to to Slide basis quarter. X. paint anticipate decrease Pro points initiatives. DIY and savings full our Decorative margin due business Paint continue with year. flat sales low XX% pricing, with Operating performance were digits. partially by single the offset year million, $XXX year-over-year, single was paint to

XX. Turning Slide to

We debt-to-EBITDA stay of sales sheet of balance revolving including the availability gross cash at basis a under continue Xx and quarter our XX strong levels. quarter percentage billion to liquidity, our XX.X% working ended $X.X to with as with we end. Our declined remains capital credit at points capital disciplined Working facility. as on

a shares $XXX for we the paid shareholders. and to of million first During $XX dividend million X.X repurchased million quarter,

call, share As $XXX repurchases anticipate year earnings discussed continue during acquisitions. or on we February deploying towards the approximately we million to our

follows: a as roughly expect outlook minimal for has year to be is projected our expected, outlook, turn Masco our flat year to let's to have and operating Currency maintaining on result, sales as XX Slide Now growing started overall, XXXX. for we we review results. which as to approximately with our XX%. is impact full largely margin The are and XXXX

first the sales half the year, growth down modest the slightly be back in year. half of expect We the to in with of

with expect the in half. operating in the the expansion Additionally, we second to margin first expected flat half of be year, roughly

driven XX%. our to margin margin up In discipline, pricing by approximately digits will continued full single segment, operational Margin or and to XXXX operating be we to our be Plumbing expand and from year initiatives. plus sales cost primarily our expect low expansion year XXXX versus minus efficiency of XX.X% savings prior

be Decorative margin Architectural of be versus prior XXXX by low sales our expect single margin savings segment, and XX.X%, also XXXX plus driven operating we to up to digit In cost year initiatives. approximately from XX% minus our or

EPS average to count are as a a share we maintaining year This rate. earlier, $X mentioned Finally, $X.XX and XXX the XX.X% estimate of effective per assumes tax million share. XXXX for our diluted Keith

earnings for on be Additional deck. XXXX financial Slide of our assumptions can XX found

like I'd that, questions. the call With Operator? for up to open

Operator

comes line Pettinari from from Instructions] Anthony of Your first the [Operator question Citi.

Anthony Pettinari

XQ of should related And given the whether from think about to paint more towards you improving volumes how are pretty DA could and XQ. meaningfully restoring wondering price/cost that timing or about was bit pathway acceleration DIY little if we maybe maybe a And I'm to talk demand accelerated comps? improving? just

Keith Allman

Tell quite I'm not of by me what volumes you with that? Anthony, terms improving. mean tracking you, in

Anthony Pettinari

talk move you're there. the trends to paint from if just XQ, DIY guess you seeing I the XQ could about from

Keith Allman

volume to when our look is -- we've market that little see we in DIY across we're you bit. paint, we tell that business of and at rate specifically that the down decline a I'd Well, the seeing continue

looking We I if volumes. you're haven't implying you're really restoration or if year-over-year. at seen a sequentially of don't know

Anthony Pettinari

year-over-year. Yes,

Richard Westenberg

the thing only of noteworthy there's nothing terms really trends. Anthony, is would in I add

outlook, indicated on terms was or sales year a single our calendar the which is year-over-year volume of Pro as Pro to down more meaningful basis. of be it's terms And as basis, it But I DIY we probably calendar single we DIY do digits. on up think performance, our but flat seasonality. in well to in as performance roughly be expect more a low low digits, QX-to-QX

that in expecting So we're this context provides of terms what year. some

Anthony Pettinari

Kitchen down That's -- from ball X% a you'd to as tracking and very like helpful. seeing mix, for I remodel worse that what -- in deceleration, that or X% better you weaker easier Masco? flag in just XQ talk decelerated I'm just channels in that maybe anything think, as that identify despite expected more if that looked XQ then wondering if an comp. if and plumbing you And broadly I'm if just about maybe could in view the trends about than you'd there's down you're Bath

Richard Westenberg

Yes.

a terms basis driven basis, in performance. what by that's think as a articulated, on a the on year-over-year sequential we're largely geographic but think sequential I seeing I of you

a year of So our where we last saw it QX more wasn't international slowdown really market. until of in

look basis. so currency-adjusted Plumbing on basis, International Plumbing X%. X% our was But on as or And down down we a America North year-over-year about X% our was a

I that's you're dynamics perhaps seeing. explaining think that the So

in see I as of and guess Keith to going the terms Plumbing in trends maybe let Bath? the Kitchen of business forward comment I'll in we terms

Keith Allman

business. a America. I would last at really a North a rate The in our stabilization, terms of in decline word, probably of in later slowdown we When International happened, in quarters couple particularly better as call look what moderation it Plumbing year of Rick our Yes. said, shows

So Germany, North to in that it's We there's trade our More is our bottom quite -- the in safe variability different China. stable. but hit well. North North little bit overall still story a is business doing in in America say stability internationally. America, feel America, we've some And certainly,

to So too to bottom maybe little it's seeing a America. that we're bit early in North say call hit that

the of be down international we're in market we total would more So bit North sales a to our little in this expecting terms than year America.

Operator

John comes UBS. from of next from Your question line Lovallo the

John Lovallo

outlook sort flat on perhaps just rates repair to move pressure a starting a more thinking single talking down remodel here we've or digits. high in and little level, for sales. had low at about But Maybe existing your home and bit a of

Just you're if overall your there, of downside upside or changed if towards curious in kind leaning anything more thought has process?

Keith Allman

change. we will overall the how see that And plus it we're We've primarily as driven the flat, start in our for our confidence. uptick this or We're -- volatility second market we behaving. guidance half But and market. no low is that performed in an minus expected. and Certainly, as changes terms single by of is consumer calling left there's digits. real in believe consumer Really quarter the to see no holding

a dynamics fundamentally, by and not came we it rates in where carefully large, quarter to where right There's the lot first watching come we And we're how go, market view of geopolitically. has what but happens here, in. changed. So expected the

John Lovallo

mean and Okay. hardware that DIY maybe Pro would through What's right? that thinking Yes, to we then how of closer the flattish that? sales encouraging. And and these if -- Kichler business imply the move as that to seem that's driving and year-over-year. down paint about you XX%. were year? of both That so, about what's are considering basis businesses I are on a were sort we And thinking sort then

Richard Westenberg

our Kichler overall that I down and It your bit portfolio. than No, significant, John. a follow more wasn't Yes. were Liberty math, but quite

of driven that's of based some decisions are made. that off And

weren't Kichler example, and taking with really profitable. to has restructuring that For as at portfolio job some also cost done regards exiting some nice but a of actions price, lines business

a terms line is expect the we lines in year-over-year bit will we business the more think rest of the comp. see in driving some year, lap look I kind that's of little the So comps. R&R of as And the of we what to as of with those industry for

Operator

Your comes the next Barclays. of line from question Bouley Matthew from

Matthew Bouley

on A questions of couple the margins.

a company was was being total I operating sort half. think to in again quite year-over-year QX spoke first -- flat margins up you the year-over-year. Obviously, of

here guess quarter? margins think as does should really the the second the down second imply about that I to is for question here? finer quarter, as that need second my of soon any we point Kind So quarter how be margin in on

Richard Westenberg

our half QX. year question. we And well Yes. And No, Matt, I our indicated, was appreciate It a second guidance the reiterated as in we've strong you as with are -- performance pleased performance. half first our and performance. we've the for as

particular year. the that I for segments expansion is to year. But look think to really at in overall comp last quarterly to margin for in -- it's expect important see overall still you of comparison in a each note calendar a performance it's Masco when our this case, we really strong a do QX

So we XXXX, Masco QX, performance strong very overall. for had margin

had XX% I we think margins.

that we're year-over-year strong a comp, looking comp at. it's really So

we So margin the solid we're margin margin But the in some year-over-year in and to yes, reduction QX well. But it's a half to increase QX overall. expecting margins expect fair expect see still flattish as from year and do QX of to in QX. first we say sequential expansion that

Matthew Bouley

And just margin into margin specifically, second in the one, Plumbing first zooming quarter. XX.X% the

price how guess that. the of unchanged. I helpful you full year if can cost kept outline kind You into playing it would guide be is

we seeing had You benefit in maybe increase QX here. are the and prices copper

was that what So yes, not the sort guide anything reasoning behind kind playing that? unchanged? of price year? else in continuing into for So kind just just the holding of beneficial QX of is how cost And there that

Keith Allman

Rick a quarter. now The is a been has margin Again, pipeline reason going confidence quarters the of the and this why as performance. productivity on something the have we part that's price/cost a in real team job with of in big we're up phenomenal pleased margin year-over-year. increase initiatives, done and the for of several of Plumbing real in Not said, overall the impact lining

of from holding way and relationship. forward. either our The to really lot not solid it's not to question price/cost whole business impact the what's we a continue a just moving good that performed expect going It's So We're execution, of continue. not well, guide.

Operator

comes Markets. question Capital from Dahl from RBC next Your Mike of the line

Michael Dahl

Keith, has some is that. up like things does to that you the in driven -- just follow on sustainable progression seem Plumbing It it's to continue. by -- expect

a You have than articulated that basically XX.X%, you're XQ. with medium-term guide this is your that and higher it's approaching

balance the plumbing to specific or point other of that the year like look incremental that when things are to it's So experiencing headwinds would the there the from what that you're down for mix things and business, would coming can we bring end forward, in whether here? up margin being you

Keith Allman

we've knows around bit seeing of incremental I in variability. commodity demonstrated Mike -- in where a watching Who crude Sea. negotiations the to some Red ship they Well, costs We're oil. the components East manage pending think We're There's changes. an There's labor of go. we as little Coast. will ability freight terms

types those the in initiatives of pipeline we're they and and So get I cost we where result we've to as where go ability those as watch, but will that need to. well headwinds, things brands innovation ability those and think our demonstrated the our the if of uncertain are strength productivity of to and with manage out price and may we

I think at what and materially looking there of in volume. really terms overall the out that we're what's is margin, could drive

XX% range is at plan Our in XX% that to to convert Plumbing. volume

any going mind in positive forward. to it going volatility. have manage other our an on that should volume way. the the tightly have manage in upside in don't negative But we're We're headwinds if goes we're could Plumbing the significant really anticipating ready very just in that business go decrementals direction. be to the to So And then

the key. think I that's

Michael Dahl

makes sense. Yes. That

to gears shifting capital seen a businesses We've the terms you're just or products you in number transactions, small Can of kind variety trade kind and about a us of of large. unfolding what of decent how kind the environment on there, overall there to year-to-date? scale thinking how just you're then seeing And update allocation of of hands out building Okay. it's environment. announce

Keith Allman

Sure.

capital important I not that is that we the allocation have the most has -- our strategy changed. important think view

we're those going in we million have for consistently I cash think from that's $XXX very how and the buyback. creation. and for to to we're fungible, of going as value range and that acquisition availability shareholder hoard of or good cash, see we're the manage this flow past, with available anticipating acquisitions year in resulted And not in we

materially. no business. change deals Plumbing say So on bit, up of to in be right our out seeing strategy there. in terms flow that little our We of the would I deal not the that bolt-ons the necessarily in focused think relative that's we're and Paint pricing acquisitions, but a place given is

We drive allocation at cultivation capital change continue several our no and work to looking in options, strategy. are but

regards business. that With to out our announcements there, are paint particularly some specific in

size, to they at or variety those, looking that of at us. we'll any rare that up add that opportunity. conclude that it's we're there value And of it's to come that and form somewhat is deal a Assets -- safe could a see of if

shareholder but things of to for about a that to that get not talk value. capital we're we that to continue going to for to it. strategy. allocation a generate strategy early has period consistent It's too going worked our years at And strategy. with So are the detail are looking drive us into We're here,

Operator

comes Goldman of Sachs. from Maklari next line question Susan from Your the

Susan Maklari

through, the seems in with gain you've starting the with tepid still initiatives of some really even fairly it momentum to being back backdrop you're to that like some there. Going coming got company-specific them

in sort come through things next time seeing, Given the be change that the any of or there the the that perhaps or is the you're of about line progress we should thinking progress course or that over this year year? could

Keith Allman

quarter it's in our performance, guidance. my I quarter first in plan. really. with We're X not prepared We're That's year. margin into pleased remarks, X on No, anticipated. XXXX but the marching quarter towards what said We're we the as

continuing point. Things realize well. executing we're -- and We are flexibility with not important, in going -- environment no a our We're drive we're really that leadership is we're not and that team. we're well. at So change to volatile this and that reactivity

the our good marching and that mindful say change, and making to we're would leadership those. I spend to productivity of year, our make that gross start very on No start teams towards we're the sure sure good targets. our our SG&A to from So getting 'XX spend continuing focus we're

improvements going as the nicely. we've a of outlook We're driving are along we through pleased, We're operating things we're how year. And now. XXXX over change have that we're our as moving systems in but a think feel decade no our had standardized guiding. We for pipeline efficiency about planned our year and or to

Susan Maklari

Okay.

Okay. also are next drove trend That efforts you improvements nice quarters? that go working capital sounds coming to some Does great. you on that could any about that? over these side. that the And had can the couple really just some And of talk thoughts then of on how what in? And

Richard Westenberg

to Sue, it's be It's Yes. we work normalized continue disciplined or a the that bit working in capital as documented. our we a capital is back a basis capital working brought keep year. in well And on to working capital. line at through in We XXXX. had of elevated in-line XXXX. probably course We working perspective, From we'll of that expectation Rick. continue the

will seasonality. So be there

the is It's relatively that the working QX we XXXX. the stronger projecting more end of around we QX we terms XX.X%, where But QX line we're channel year, from as trend. in a a for higher season. of with a of prepare would working end And capital, as of finished just our traditional look capital percent which sales towards and seasonally in selling as partners perspective we seasonality and seasonality in follow

Operator

comes Your Baumgarten of from the from Adam Zelman. next question line

Adam Baumgarten

do year? peak of the you was how should for Plumbing, of throughout you expect Or balance in about think think basis? magnitude Do relationship? that Just cost a the tailwinds the the go-forward the maybe tailwinds we that price XQ on

Richard Westenberg

what Adam, performance. is, pleased say QX would again, with I we're Yes,

the price, the a or to rest tailwind the to I say, neutral. commodities expecting would pertains and single-digit it for As of overall relatively we're low year year, Plumbing be favorability for

As mentioned, the markets and in in market. obviously, we variability -- some as freight Keith there's recognize, the all commodity

a TBD So perspective, plays that's a as little the low But price from favorability. bit single-digit out. year least at

Adam Baumgarten

just in more really the And side was mix on any you if Or the you so, seeing color just trade International? quarter? Plumbing. in Did down? then some mix some on the see due to that Maybe headwinds are And side of it.

Richard Westenberg

pretty was Yes, is pretty quarter. International during minimal headwind as profitable market. in really, it before, was mentioned the just to a It business, volatile a tends our still that slight Keith be China more and

but is So mix, which down, meaningful it very geographic was, for the business. if it wasn't overall that it's

Operator

Your from Ng next from line Jefferies. Philip comes the of question

Philip Ng

shaping in been and they're quarter going terms your noticeable into bouncing curious the it's into seen Have change have the there's I inter-quarter about or your how But if any comments any I you with of curious, and you how just at April? managing into line point? year up along largely was just trends what behavior appreciate is the bottom improvements the kind of consumer channel Keith, this partners in the any thought I'm inventory? coming year. the

Keith Allman

product really with and inside say expected and launches of a there's terms as of happening year no those we prior lot sorts comment expected. much But all Don't the current on variability I as really it's or of It's what's as to obviously for quarter year new in in so beyond that would quarter. end things. inter-quarter quarter, system regards fill comment

Philip Ng

a as your partner by assets at, you something have strategic Okay. on on the obviously, It's on the you in That's alluded has Pro. helpful. huge then kind investment one paint are of put complex of a larger definition, earlier, paint look reaching take review. side, to And made harder retail the

or it? a this it guys more something putting at parts, side, of terms from is store in different hard look what Would you just you on So on how the done the in thinking business particularly consideration you're little operationally and a have any about holistically you're side. color which is

Keith Allman

significant Sure. Yes, really with Pro, with focused Depot. the our to that acquisition continue they the a with strategy, Pro, to was their work been and Home side them we've I which that continue to paint on be focus, working illustrates regards certainly think the and but on business with to very several And keenly look that's for consistent go brand we paint the when years capability our paint, focus of some not in last after of Behr absolutely but in over Pro. And that and our our service that's our the that at proposition, and you only comp stacked indicative cetera, et particularly our of XX% of Pro. on them their Pro relationships closely

that's key. So

it going not With and take paint consistent and too at be will our for aspects to form. asset the are with any a to all look any that may we're may the individual allocation around of And potential regards but at may get early that us various it. taking the specifics capital may or happen. the at, or to into early components It's strategy. assets of looking of into, that we we're that process to we're could of a under now the review, that look our involve has deal and too not M&A parts just started, It's get

Operator

And your Loop Shmois from line of next from Garik the question comes Capital.

Garik Shmois

have maybe how you year. Just as easier about thinking throughout progresses, comparisons the you're International year some Plumbing the wondering

that Just several you're of business over the growth wondering next the quarters. part to show expecting if

Keith Allman

I market, in America. will, of the versus finding little lagging it's said, terms trough, as bit a International of North the terms In Garik, if you overall

it's and share. a there gain we're has done and mid-single market outperforming while So you're competition digits. a when in quarter, countries. in expecting But the to in the and down International no of Europe there's that well question, Hansgrohe market continuing down be our team clearly, phenomenal over low particular to difficult XXX major the to pin to job we're size certainly

So we're Europe we to more well. and happen. stability expect of bit a very is in that is performing There to than China. seeing Germany little continue Central in The signs business

we low mid-single backdrop But bit. share expect down gain little will International a lagging to is China to think that markets the digits. be we market to So of against continue

Garik Shmois

commodity just then volatility. to respect And with

Just about price to the or over of wondering how announced increases you're the thinking about additional offset. have year? pricing You're remainder thinking

Keith Allman

a Yes, we've kind are had some been specifically. bag mixed Container a Plumbing, pricing to as relates I talking slightly, have price It's and as of it last year end, to ongoing targeted Coast At that currently I East say are we and decreased risk, last I'm Plumbing. took quarter come port costs commodities but year where then would up. the in was elevated again. to $X certainly this above in year I in about, from Sea, freight. X% negotiations, number it prices the ended other it about is think relates starting up as Zinc Red talked copper of areas

So there's there. volatility

you Plumbing for then through of would I going time seen across our that impact coming products the that to our due ocean and an the inventory, and nature in months it the about be P&L. takes it there X remind takes in to

we it XXXX, So call for comp flat all in. expect, roughly commodities in Plumbing, let's

Operator

from question Hughes the Keith of line from Truist. next comes Your

Keith Hughes

quarters there? outlook but on paint question of for -- the inputs the business. in Similar as last in the next one, couple What's the

Richard Westenberg

Yes. it's Rick. Keith,

to see significant but of So of the we modest, calendar on with a side for as regards flat. really QX with we pretty favorability saw the don't the commodity year-over-year commodities standpoint, the coatings year-over-year a -- sequentially a business. on year, regards impact year, basis the today in equation is to some in for our paint from really And

impacts increase we've think There's was oil I the which some obviously mentioned, some it in in seen TiOX. pressure resins. As prices,

but and closely. good start monitoring the pressures, some very stability to year, but upward it So we're really potential

Keith Hughes

like year? that's Any It a be view. the out later may upward sounds of speculative little pressures a in more or

Richard Westenberg

Yes, And impact. for because immediate year. again, of alluded as the to, not our or and something there's currently Keith's we're we're an that baking a with -- it's it, for the obviously, delay, any monitoring year, -- regards commodities terms benefit headwind it's in significant in expectations not we're so but not we to

Operator

Your Fargo. of the Sam from next line Wells from question comes Reid

Richard Reid

kind it's distribution by channels strategy should be seeing, talk pricing. any little just you down drill to wanted and wholesale? those and bit that aware pricing versus with pricing specifically to any channel I understand you in we centers home of? Plumbing in to want versus on Actually whether dynamics start a be Plumbing, of that I might Can differentials more maybe showrooms

Keith Allman

really a that it no the we're our in we brands where to various ability difference it stay our commodities think And as about channels, and and cost drive with going view function relates really pricing strategy we to as way as of there's go consistent improvement. strength of is that. The to pricing relates to

get into to innovation. the as that, the not But look productivities, customer discussions Beyond we over our strength to pricing time, specific relates and to effective the get to brands like at ability going or our of pricing. cycles. And we've our the it over fundamentally, drive I'm capabilities demonstrated --

to and that And to we are when in culture that the you volume, look at continue some face to continue to margin our today Plumbing improvement really well have we in ability improvements I speaks and the drive think to drive where business productivity. continuous the challenging tools the of

to share, the over lot of a that gain approached been that's goes course, and including pricing, consistent really of we've years. there's it number desire So how a into

Richard Reid

guys of side year, switching on to Last were And in Plumbing. paint gaining a Awesome. shelf you few different the gears space subcategories. some then kind

are year kind any in of opportunity there's with Home of Depot of this paint initiative? a as share to and curious whether Just to gain part your kind coming conversations continue how those

Keith Allman

gain we is Sam, to to share. think opportunity there Yes, continue

on Depot is consumer Home and of result for to that the Depot in overall We're the drive gain, is obviously, us continue focused And ways for paint. share outstanding. on focused plumbing, in Pro. in customer DIY a shelf solutions in with businesses. Plumbing both we're terms at looking big relationship Our volume. to our We're and

So that's always on something do. and we we'll continue work to

Operator

the Kim. comes from question Stephen next Your of line

Keith Allman

Stephen, you on be mute. might

Stephen Kim

And didn't have like nature. far It hear and due are? much seems nature? you've that specific costs like specific cost How volume. a on points America sense saving I about talk North programs kind about down America Plumbing? XXX like and margins input Plumbing how talk It were North any more got efforts along general to might up cost of But that of maybe basis you could you been in could things and they of things for programs, or seems give any the so. going margins us we savings expect that International

Keith Allman

and Yes. cover specific also because It's doing the with is But we -- pipeline in been beneficial. across just and bucket we consolidate from multiple and team just can and our of buy, job Hansgrohe good they North certainly around International initiative how buy question, coordinate Good hesitating platform. there's Stephen. that's purchasing how it's and The I'm initiatives -- across such a a fronts, America. and who not and we our buy our in Plumbing

and engineering, our looking consumer in terms bigger and volumes Value can get sets where of hence, engineering how capability the consolidate and component we -- where designs a the affect can -- interface how teams consumer and lower a where doesn't commonize price. purchasing better it have at our we're we

a begins system mindset with and of operating Our ends continuous improvement.

how to So as relates our rates we adding we labor as gross and productivity. we in or as direct we of being labor productivity off labor how and efficient indirect can fixed efficiently taking drive efficiencies leverage shifts that assets, driving And direct drive cost margin shifts how scrap and course, and variable i.e., then, and regard. it

to Serbian overhead managing that, bringing absorption that be with bring with to assets as our paint we're can issue online new plant and up. we kicked we purchasing and our regards then we've new So better efficient value as engineering our as initiatives off and plant doing those that

about a It's really the system really think momentum continuum all we're it's of Susan continuous that of part and used cost leadership in pipelines teams out earlier, cost across I the what full drivers. into. the than the word groove decade more of And of our operating projects it's our managing momentum. So getting That's in about. Masco improvement

in expect down kind in that and XX.X% margins initiatives. In guiding expect terms can and what margin a flat about of to shows productivity enhancements talking can good forward, going Plumbing. to We're you we of a year,

think we're are in guide, our hitting I baked that's expectations -- into confident and it. our So

Stephen Kim

your you're I degree well remarks managing in what seeing capital human your you to to the have this is thing this, with systems any that is reframe to ask or One processes? you introduced versus your just better as respect or technological that really improvements into forgot

Keith Allman

efficient and a on component Certainly, in technology it. a a we're engineering of And direct and side expectations It's big Certainly, indirect space. human the piece. mix. of and with labor having side it. is coordination leadership the And in capital is the providing the is technical a particularly and the that e-commerce Plumbing, part or human capital and leader, online

sets we component that. technology and through have are have And component behind where how see we've commonized channel. with how seen the can the components, logistics I as handle it we look can that a significant And driving at doesn't into need the distribution how to our changes to then price and that volume we technology we unit flowing and can set mentioned, that's strategy change regards customer down. lead to in products Certainly, and

that's lead. operating and management applying again, and of of how the technology our it's from a created decade we people human So a to that's, incentivize how we system of that. And go on to back momentum been combination reward of and

Operator

from line Bosshard of comes Your the next Eric Cleveland question from Research.

Eric Bosshard

in regarding disciplined? the I it's with the I a like Keith, pricing things, getting appreciate on and strategic consumer seems you're for what value price an observing consumer more the Two bit your brands. could. elasticity if thinking I'm environment where curious

Keith Allman

didn't by handle in certainly nearly year a really some it significant as look price cases, varies elasticity a X varies that, and ago years on apply, When by to we consistent. it technology, It's or when by the inflation, you it really countries. it at frankly. have And data varies get wasn't hard such point,

a that bit sensitivity, bit we little a the example, attractive we're more elasticity bit are particularly for that areas in China, products more little a with seeing designs So other volatile new new in more consumer. to price little launched that's and that

gap more price part points. little more some price a have little price of hard bit We more atypical for worked bit environments assortment. In a the Plumbing lower seeing margins in of of between little end our and the assortment challenging, reduce at point are to example, of assortment a the this. end the we elasticity our not But elasticity, the higher like we've lower the

diversity We sell. terms in have of we where geographic

mix really elasticity pricing portfolio So the to we it consumer as look material much performing in, is and price at at and mix, Rick be hasn't those impact to earlier, we ability expect so relative to think, nor how of indicative been And dynamics. our look us, our of you or when as you I all forward. our that's, look a on behaving rather manage mentioned do

dramatic the years. really to specifically rapid inflationary that your elasticity, behaviors been it's given on But tough of understand over question that, to of some we the particularly last and couple saw

Eric Bosshard

a is to contributed market. you down? for business? to out sustainable there then growth in to X% market or that like the that called And secondly, business Delta that Is what of specific looks think, the anything that And grow is that was continue I down in growing, XQ X% that

Richard Westenberg

we specific an from there is We if that I is say year single the by What cited in did our was performance the in wholesale growth our digits. know sales guidance a Delta, don't number. perspective down I from channel. Yes. or revenue up -- say it's in standpoint, would for a aided low overall really Plumbing

in North than given performing stronger recovery America, markets. the International lag a perhaps bit International and the

outlook So of we QX optimistic. Plumbing remain cautiously and we some this North we're regards year with called haven't QX evidenced year America to in but stabilization last of specific seeing as and

would the business -- year year. what say America point. talked in is it's And at or monitoring we've Delta of Plumbing situation. about line North kind before, with is we're early the for this as in I our our But the guidance We're

Operator

of America. from line question the last our Bank comes Rafe Jadrosich And from of

Rafe Jadrosich

ask to margin last over had -- you've really wanted just year or strong the volumes I declining first so. The performance with

historical turn If levels? to positive, how volumes about you incremental we margins your think see should start versus

Keith Allman

I think pretty Rafe. consistent,

performed, change any I in in a decorative, how anticipate think for that. that's for I XX% consistent lower that plumbing, than bit little with to we've XX% and wouldn't that been

incrementals, had what from downside, volatility, really the the the to is which are terms but we course, as in seen decrementals, volume. we've incremental performance of historically those managed and the decrementals less on then, how than strong So down drop having teams be on relates real -- managing and of of indicative change the some no those we've it

Rafe Jadrosich

demand? remains a dec drive the how with that macro volumes volume wrong, channel Home me drive XXXX volume partners below better a little Depot I'm could your think to if or are I be is -- there? volume possibly on what then perspective levels And arc looking Like you to from and side, positive start And still we the working now for soft correct should here. now, remains and I think

Keith Allman

our top a channel partners to continuing keep whole drive How continuum drive initiatives, that desired solid went the our right in through to across to we earlier on work some down price that having make innovation, I remarks of what performance we're with of that of doing demand productivity costs the to consumer. place in of that mind through the is my pipeline prepared we have shelf of sure the and of

drive Pro, very business. we've And we where course, in in and performance significant to strong and continue to in paint our gain programs of closely very and specifically as DIY. have share it work and a relates Pro we had So profitability how

to and the our channels. with then with first and partners drive continuing really it's together being consumer work So beginning

Robin Zondervan

in morning wonderful of like call We'd on us for today's to That joining and for the call. interest this all you day. your a Masco. thank concludes Have

Operator

you, Thank Thank call. this concludes gentlemen, and participating. conference for today's ladies you

disconnect. You may now

Masco (MAS) 24 Apr 242024 Q1 Earnings call transcript