MAS - Earnings call transcript Q2 2024

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Operator

Good morning, ladies and gentlemen. Welcome to Masco Corporation's Second Quarter Conference Call. My name is Lidy and I'll be your operator for today's call.

As a reminder, today's conference call is being recorded for replay purposes. [Operator Instructions] I will now turn the call over to Robin Zondervan, Vice President, Investor Relations and FP&A of Masco Corp.

begin. may You

Robin L. Zondervan

morning, Quarter good to Corporation's Masco Operator, Call. everyone. Second Conference XXXX and Welcome

With are and and Rick me of Westenberg, CEO today Masco's Keith Allman, Vice President Chief Officer. and Financial President Masco;

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

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

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

financial Our non-GAAP statements will also include metrics.

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

Keith Allman

and Thank joining thank you, morning, Robin. us Good everyone, for you today.

brand, through As with innovation. results and financial with our on we our macroeconomic I'm service year, have continued midway sit solid excellence, delivered performance. operational environment, here pleased the Despite we a focus challenging

than despite Additionally, decrease profit has expansion half margin and year, of first the enabled us we oriented a of strength in our drive expected operating sales. repair better to remodel in portfolio the product the

to as X sales second in with decreased net to Demand prior quarter continued X. our Slide to the results. X%, line Please quarters. refer Turning stabilize

mix. Second by quarter volume performance impacted was and lower primarily sales

savings. our efficiencies to ongoing basis In cost result gross drive and gross initiatives to operational rose as million and XX.X% $XX our profit points margin achieve quarter, grew a the XXX of

resulted margin execution operating million operating $XXX profit solid Our an XX.X%. in of of profit

share. earnings In per addition, our share per X% to $X.XX grew

in sales excluding International decreased local Moving overall North in In of increased stabilization of on overall, of segments. Europe particularly impact X% acquisitions. sales cost and X% profit million, currency. local segment and the savings. In XX.X%. currency, sales we American million acquisitions operating X% The by and $XXX Plumbing excluding to discipline pricing Plumbing, the as and largely driven Plumbing margin productivity, and was and currency, China. Operating demonstrating with efficiency line up was operational for in prior continued our X% impacts X% performance to focus to increased year, the our continue and signs the $X

continue half pleased are teams the We execute leverage system International, the our year and the North our to throughout America of in and in Plumbing priorities. operating segment our our on with strategic performance first both as

to Lastly, customer in row. for Service our distinction reinforces the Power commitment third and outstanding Plumbing, our service a Delta Faucet was in award Customer recognizes awarded This industry-leading the year service. J.D.

to Depot. double were decreased pro down we pro Decorative X% single continue paint, as execute our Home grew quarter. sales strategic high decreased The paint to segment. paint sales In to Moving the digits. digits, our our Architectural sales digits in mid-single share low Sales on DIY Overall, paint with partner, initiatives while grow

are and needs brand focused customers of back on through dates service, performance. meeting years, our quality, the and over partnership Our XX we together,

additional invest to and sales are drive continuing the of growth We and market paint, are proud pro our forward. going to expansion with we growth

basis Operating to points the profit million was $X margin up segment operating to for decreased while million, XX XX.X%. $XXX

our was expectations. our Decorative year, half of generally in this demand first with For in line overall segment the

pro in expected, was by challenged paint paint. more partially offset performance stronger DIY than However,

Turning to capital allocation.

the a during flow We solid continue sheet. balance and maintained free to strong cash quarter generate

a to million share shareholders As on dividends repurchases. through we deployment executed and $XXX capital returned our and strategy result,

outlook comments for sales first few single year our at on the half for a with for for XXXX. of Now down largely total Overall, the expectations low the our in digits. company line were

within broader macroeconomic has the of tempering up low guided expectations sales single the are to of second in we our the our sales uncertainty range leaving year our As environment digits. minus full-year or plus continued, within from single digits low half previously flat, for roughly

margin the to drive half continued the within our of we in the full-year in XX.X%, our margin by through execution However, remain to to our our are XX% performance driven expectation strong confident ability raising operating Plumbing range system. first expansion be of We segment. operating

of strong our and share. positioned growth when per $X our normalized for the structure growth market to focus leverage we with rates. and adjusted per well in to $X.XX to volume now cost We productivity, $X.XX previous anticipate XXXX earnings of our expectations on returns be narrowed Additionally, to per the from share share, range to are $X.XX

that believe long-term of fundamentals to stock, drive to structural continue term. homes and increased and the repair staying equity are as and our activity consumers their We in and will long remodel levels longer in of repair remodel such age home markets that mid- strong housing the factors, higher

capital shareholder of initiatives With our continued fundamentals, value these positioned drive creation. well to favorable we are and disciplined the deployment, strategic execution successful our

competition our cycles in and to brands, deliver and investors. continue growth our people invest for the outperform to EPS will double-digit We through capabilities

quarter and to the over our results to I'll Now Rick? detail. more over call outlook go Rick in XXXX turn second

Richard Westenberg

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

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

Turning or of decreased impact to X% X% currency. quarter in unfavorable X. year-over-year the the excluding Sales Slide

of the North our modestly and X% initiatives of growth added operational as our sales was In second third sales. the acquisitions. gross X% acquisition million in quarter was impacted XXX quarter, currency, points In and Overall, profit decreased performance in in excluding International to higher last by X%. SaunaXXX cost operating Our results. our lower X% year-over-year, decreased a local drive sales quarter down or of contributed to of of local expansion by price sales to slightly sales driven lower year margin favorable currency, Despite quarter employee-related the costs. was to percent efficiencies our level, XX.X% significant American XX.X%. SG&A $XXX basis

at remained margin strong our XX.X%. However,

performance Our by primarily was favorable initiatives strong cost savings margin driven and relationship. a price/cost

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

segment year-over-year. and currency, which and another by signs stabilization. increased sales offset mix sales impact This North the year-over-year sales the Turning our increased to actions second contributed to X% by the first including acquisitions flat Volume sales Plumbing unfavorable for partially by encouraging XXXX, X%, excluding time Pricing was X% in quarter since X% of Plumbing of was Slide X. or quarter X% acquisitions. unfavorable Plumbing demonstrating in the currency. each. reduced increased related to X% X% growth American of

X%, of in China. year-over-year low by partially the see growth returned offset the as Faucet Europe pricing favorable decreased our currency, driven spa our International signs to In markets factoring another sales in of of Wellness mix, volume Delta and delivered and growth by actions stabilization benefit key of Plumbing single-digit Watkins business we sales sales unfavorable and before continue to quarter SaunaXXX acquisition. local

favorable primarily quarter year-over-year, and costs. mix partially XX.X%, margin second prior operating the price cost and was This a with cost the unfavorable was offset line or was by in up operating in savings profit year. by profit operating higher and initiatives $X relationship, driven Segment million X% performance employee-related

price. quarter. the half Slide paint double lower low digits timing Decorative and sales sales to first year. to Turning quarter, second sales of due decreased of decreased by was paint Pro decreased sales across for A single X% and total volume DIY X. Architectural the up In paint digits were sales portion this mid-single decrease digits. the of driven the high DIY

sales first the paint total down paint digits digits year saw and up single the mid-single DIY half of For high sales digits. single decreased low sales with we pro overall, paint

experience in previous sales now business, digits. to DIY the pro our $XXX of versus low be softness million, year-over-year. down we expectation our our continue increase to continue to business we digits. Operating As mid-single DIY single market, paint full was overall expect In to year digits paint low slightly down single down profit we anticipate

was points initiatives an the partially Operating spend. and savings up and was However, profit volume lower operating cost by XX price by marketing offset of relationship, margin basis timing cost impacted unfavorable to XX.X%.

to XX. Slide Turning

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

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

acquisitions. deploying anticipate the guided, repurchases As during approximately or share $XXX we to year million previously towards we continue

and XX Slide to outlook XXXX. turn our let's for Now review

in for largely Masco, the total first half line of came as For expected. the our top year

our are XX.X% expected first our and our be While operating seeing of range the we previously remain we digits XX% sales or we the sales XX%. in margin are expansion we to are commodity while now execution segments, and in XXXX full-year continue in are plus full-year year operating single sales the of segment, within second in to half to second for sales across quarter. In moderating from top half previously year. year, versus year, growth roughly costs the guided guide most approximately our Based first Plumbing of the up to the our operating both be half half previous of view now and flat second or our minus of freight year anticipate of our prior of minus full margin expect increased previous fourth strong we half with strong to year, expect execution to this low the expected guide and from approximately single to expectation operating maintaining ocean performance margin our full-year approximately And our digits. With segment, XX%, and be increased our of XX.X%. line we Plumbing deliver low margin the of increasing to our the plus to occur in approximately this on of in we

down plus versus expectation lowering This digits minus market. DIY or Decorative we is low due change guidance year-over-year our Architectural low segment, In single primarily in previous paint are to of our continued the XXXX single digits. softness our sales to be

XX.X% our year savings primarily sales, by maintaining margin are full-year of be and initiatives. expected our driven this from cost would up prior margin approximately anticipated lower operating XX%, we Despite of

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

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

up call would the like With that, for to I open Operator. questions.

Operator

line first the Matthew with [Operator Bouley from of comes question Instructions] Your Barclays.

Matthew Bouley

to obviously could tracking this Decorative. in digits DIY low some get on level kind the single-digit digits paint in that happening start I question of here the the total I'll I single for Maybe you Did might of acceleration QX, would expect assuming year, be guidance you're the digits, down mid-single down and half. of the second segment of what is Just general, are a have clarify first down hear the in if and for to saying to misheard Thinking guide? what's half you full-year and you. But around to in low the year? mid-single relative with decline were kind that deceleration you there the in correctly for you about

Keith Allman

Matt, question. Keith the for Thanks here.

more that subsegment, to subsegment when that, to confidence think well conditions DIY sensitive to than specifically tends DIY, other sensitive paint it's segments, the we sensitive sensitive economic about affordability consumer I overall. I known be think to think

So years, the that's the average. over price our put last regards the think price with in, total been think on of and company increases we're about market, in happened look when knocking XX% at you to couple what's I across

high So put that basket that's groceries on in gasoline through being sensitive to of that a segment. to lot everything. whole pressure consumer there's affordability Rates been overall

expected So it's And well to of it sense known a be that's segment. that, we down.

consistent. I think across it's pretty regionally, look we when

little bit more it's pressured expected. we a than So

highlighted remarks. our that we think I in

our tailwinds. three fundamental forward, second the some it why a really half One, have is based we little and comparables. bit, the comparables over where soften at things. be first have When is our you look we Looking guide half, there on the will

the be Secondly, to quarter quarter the that, I'm a lastly, our We and of expect. And what get principally through advertising. say have spend we've I in going transferred We're to that in demand obviously to into experience to from would know year. about year of not guide specifics. our going lot the contemplates, we to where then drive that was SG&A being talked it second using some third this last well,

guide exit we contemplates recent demand we're Our what seeing in quarter. trends and as the

Richard Westenberg

would be the digits would to up year. to DIY low didn't indicated overall can we that, the paint and for just I that down indicated single would digits. clarify segment is that pain be with we full-year, paint Matt, to that, DAP We add of what paint for pro overall guide the it's the down that an the single assume in And Yes. thing low only be line low give guidance, the a single down line digits from mid-single but in segment digits. perspective overall you total Within

Keith Allman

we the sticky performed do company. productivity Matt, to return our statement. And and in not to does strong what volatile you Architectural and see able And relates sustainable have what's you pipeline. our with only this P&L across has growth do more been we our rates. in innovation able Decorative when an we've think, segment when across and time, we've are look stabilized And this in I to given as margins this brands demand to regards with we've more shape. normal This volatile price really is is we enhancements about driving the think how market about been it opportunity what's forward business have, and to -- exciting what what handled good but which to our well,

business on to volume. that contribute this dialed have We incremental in incremental earnings really

good of to So terms of feel our about performance. segments we've in terms real been able in of what demonstrate both

Matthew Bouley

it. Got

color call line in and guidance organic And the there. for all quarter. for second top there Plumbing. shifting maybe I did Okay. I clarifying detail I see, Thank to then would the so color in it, and you result that international. I mean, growth issue, the Certainly, acceleration here you you guess, exactly some paint specific I U.S. and saw great both why DIY that? better is there Plumbing trends. a gave is mean, but some driving on U.S. maybe mean you and on across the having international, side, perhaps what

-- on demand sort kind continue envisioning of any segment. of and demand Plumbing So just the to color in evolve shape you're of how the

Keith Allman

about domestic. international a think year early versus challenges lagged domestic, some how globally talk I'll call, We've then Last in to you If see of last couple I international or demand -- in started I and talked now, about quarters. were that in international in to strongly point, a was North was And that a seeing whilst at a stabilization I signs that we've point of but America. to reticent call we the come moving it stabilization right Europe, little stable in direction. felt

stabilization I'll we continue feel more signs I in of and that that in tell of are demand internationally. international, you we stabilized period to see that

for in key So and markets Europe, Germany, goes Central that China. in particular, our

it very ago feels X America. or in North much it like So a did quarter

you how it's clearly at good vis-a-vis wonderful our a look Internationally, competitors job, about difficult we're we're it's And the and major when share. market continues do size, talking team gaining nail Hansgrohe continent, the a performance But specifically job are doing there. at we -- to and taking very that's while to on quarter-to-quarter. consistent share down in been our

incremental of strong that's carryover this organic year. with So spot last pricing a bit And to combination regards the market our it's some year. and come stabilization of had share a in growth, some little we've of starting and demand, some pricing bit of gains parts initiatives a to where tailwinds assortment of slight from slight, around, pricing

view that to say advocacy focused on In strong we've team North where for that a influencer North is the about factory there that advocates and and in America, enough continues an sale where example. a growth America, with I as for showrooms, off, of influencers producing job organic we a been can't to through assisted in about do very frankly, we're continuing decade, just pay development

has and to Our product we've and business our launches assortment product assortment roll got wonderful, that continue spa continues out. a in our great been will -- and to

spa as business. and we get network that of that in of outstanding it nice in -- SaunaXXX, our leverage and more North the to over to we in some America. available above returned here start legs think that acquisition SaunaXXX, brand and dealer the growth assortment we've our So benefits That's more to

like we're good question. that around on how in your again, continuing. hard our operating And margins So of your work, anticipate The my doing question system. are indicative we Decorative and paint comments well operating

even take We're taking scrap We Kaizen is to so have of improvements. variable initiatives. rate equipment maybe We're effectiveness, are That across a -- sticky variable very working productivity, overtime working regards can a to of close pipeline some sort on shift, putting and combining to and trying shift we labor improvement keeping overall continuous productivity, our hard enable off-line working cost productivity. activities. and with productivity with offline P&L. that on and drive shifts cost eye a Those us reductions,

So looking about to prospects the forward, of earnings what it normal, when return shareholder for and this value. do demand can does we're excited

Operator

next line with Stephen Kim Evercore ISI. comes of from Your question the

Stephen Kim

couple the of what expect -- there if make I first would you, lessons longer-term in might event there's to had learned color. last tariff guess all if Appreciate the from a questions you abrupt the for any that that time an And apply I in relates future to are the this you happened change adjustments policy? in needed. you one though.

Keith Allman

Yes.

that our about We've alternative with think been we've would approximately I when tariffs in sourcing tell working XX%. of that terms solutions to think the would when tariffs, to suppliers. reduce I when Steve, tariffs. by Trump hard been able very exposure they you moving our original enacted, were you, avoid

much. I through won't it. about. think ability indicator big that past. what our that's we've future are go already performance is I margin into been obviously we've best to above a the And driving been the of number. We've pre-pandemic initiatives manage able the that's do in as that demonstrated margins And talked And I've So to improvement levels.

but it it. able some we've manage to So time, been took

into tariffs those back come play. should So

systems a guide have better spot We address teams incentive quick the these from to our where that from starting fashion. in a XX% exposed. to issues we've appropriately how we of buy tariff behaviors of learned our have less We're

that's much past. that we'll in same we to of continue help. the a execute the did big So And playbook

and have effectively. management do and on our judiciously based think but We'll it. through I been it this, faster do more teams aware of keenly it our experience, of we'll all more key we're

Stephen Kim

broader was about. wondering strengths helpful. your talk narrow certain very key look actively you're years, or question of that I that whether And makes then to the you as portfolio product That's do product over assets. you Yes. that the Anything And this to how might portfolio. a your specific out about you a seeking broaden time. few Masco better brings the assess owner next table at you

Keith Allman

think terms of broadening to of question the a in there's portfolio So I or and couple product our narrowing, components that. of

First, we look to points pain consumer resolve continue we and we those and can points, and the at that we experiencing begin that. to with the find try pain that ways drive consumer is

or wraps we with rapidly broad it innovation. so it lens It's then that it more have we So much move to can not lens meet some need narrow. do to IP next market, the protection and a around and hopefully, and some get so that's on can it on with of unmet an a efficiently

we're we their to glasses can how with on to we technologies as simple what to better activate and that. do to can sink as have germs can various their hands things consumers consumers them clean develop we How your enable experience work technology water how our to and issues. avoid So how and solved help at and have report, to are the rates, working lower hard environmental for on in it you give seen and problems shower sustainability our conservation technology better flow looking in at kitchen. We example. utilize may their where certainly And ESG,

give it's that to brand and really need that innovation our and the us to about brand power must-have our and So leverage an pricing customer-backed build shelf. meet position on to and unmet continue

of fundamental the where focusing nature So we're innovation. that's our really

the look we we of costs operating cost says and a there on is XX/XX is the know believe system, with and line that and no of terms item that and we component long complexity, our at that, to but In tail, complexity. narrowing the a associated there's we fundamental P&L understand

aware as And of and into so higher save tail of we're can be costs productive back that margins. long to as and cutting growth combination a to more keenly those we put

customer really a it sword is two-edged and unmet need of complexity So reduction.

are market. the In the there's knowledge our and the key bring that terms product channel brand that we customer is leverage across strengths innovation strength Masco, that we assortment. coupled of really, of with And service to strong and

before, you very our talked where ticket to similar really our portfolio, at -- we're similar our we've management we've across that's down of to they're portfolio to So channel look leverage businesses and able that low of now expertise margin chain view. our valuable supply capital portfolio, that our see make when have believe portfolio profile what Steve, we've is part terms relates you as pruned our or expertise we more requirements, our that performed and in and as we it to businesses is very these because

Stephen Kim

of Okay. I with that of year. guys. Best very rest the the much, appreciate luck

Keith Allman

Thanks.

Operator

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

John Lovallo

that you I'm the to end were the just could EPS range sales the top curious maybe of achieve how your sensitivity still and Keith, you if one, to talking place. I just end the EPS have efficiencies in midpoint, higher at some cost-savings initiatives of guide mean execution? come sort in And of on first that cost think is and line? think do been about the The the the range, you of the of saves lower even what about guys the

Keith Allman

is that to future margin the of And the on not the us of nature we've I enable happen in to our improvements hoping we're hit done, Yes, to targets. the reason, because do. John, things

for hit of the completed, that sticky, execution things excellent done, teams done confident our are to have done that going and them pipeline of targets those what able confident job we an and we've are forward. because in are executing because we being We we've against remain in. and margin have what of And the

a price, to time over in do demonstrated we've driven expense of ability we've that us terms get innovation of spend our have pipeline with advocacy position and brand, our help we and that on that our do the get a and the to service, We our fair kind to with how must-have channels earned price shelf.

yes, margin will confident hit we're our So targets. we

Richard Westenberg

despite Yes. confident factored And saw And that's only John, guide. for And tempered EPS is, John, we're I that add from would our obviously -- morning, thing as half into lower one would I we'll you comments the keeping even this add for expectations guide in year, end our We've and -- the narrowed within the of expectations that thing spite our second midpoint. range. we've the of or tempered sales. our guide

John Lovallo

Any the that, on why things can Okay. pro guys what kind hanging within so you the exit help of things It actually in rates of positive exited. us economic in July nature? And trends on been paint That's as given you Plumbing metrics seems can the are of may and some have kind comment is strongly, for then that give and softness June helpful. of businesses? -- overall then like both there

Keith Allman

previous at quarter happens when quarter there's Coming and Yes, the some look on we comment some can of then out prior what -- you how and year, And in and John, it makes rates. to the murkiness exit into year next edge I'll year at of X -- complexity following throw quarter. on look the the versus quarter quarter, the quarter it's that business. in itself X

When quarter, gets and inter the are happens you start how worse. exit where out even months and parsing that to what quarters we

But that the in I our you rates our exit end guide. So at run don't July our of tell the do through rates contemplated are and and that. we will quarter

are help with those factored Can here, question me you second So John? that out in.

John Lovallo

your strong Yes, keeping what is pro opinion? in so

Keith Allman

are. a we're -- it's couple DIY a One sensitive the and mix And a the the uses think versus how is seeing it, of the that, it's of they this a of terms call it's consumer But dynamic. seeing nature installation, pro our who In less I in things. case, call assortment it of end the of Deco, assortment mix pro. in Plumbing does sensitive. you hire that some in the where your a also then we're high-end and high who just of

So around. because the uncertainties and pro are who people sensitive They less some macroeconomic are more use issues they're consumer are consumer that more a little a to a tend confidence robust to of affluent.

that's piece So I think it. a of

piece other share gain, and which is hold. our to and to performance continue drive The our we

better sensitive So are. business a it of my assortment. performing is lower with bit why of how in hanging end bit And is they little there pro a light on our to really the little I and the whole has than do than assortment base the subsegment the perspective consumer from why sheds upper think little our better really that across of bit DIY, a the end

Operator

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

Adam Baumgarten

about levels compared where think to we pre-COVID sit do DIY, paint? in If volumes currently

Richard Westenberg

So Adam, Rick. it's

we we Pro were volumes pre-pandemic. volumes DIY where below are were where So pre-pandemic. above are

the Keith has Obviously, DIY And obviously, And in is as relatively consistent pre-pandemic. mix -- terms that more challenged given articulated, performing. we articulated so is factors pro but overall, of we're changed. the Keith

And as growth the you offset of recall, really incredible and DIY in XXXX, that's stacked in may less XXXX terms we from the in had really really both we're we've DIY again. turns and pro we're been growth really environment, to positioned hold or and in XX% that headwind facing. more when really That able on pro from market to growth comp to that to well, margins our said,

Keith Allman

think bit at and paint, take our pro pre-pandemic a expand and add was on to for look story on company whole I which now our on are your relates entire interesting very today. a where to investors. tells I assortment so performance I and Adam, up might it we to our And it because little pre-pandemic question, specifically and our that do back as broader a

we are our bit of pandemic the growth in at look we broadly demand volume pre-pandemic rate significant that and of, bump you COVID from at today. historical bump see at that little say, you the where that will. And What and was pre-pandemic pull you we in hit, a rate volume because when and But and forward, below you substantial there look demand when terms had you out are you timing inflation and differences. extended a you'll there. X.X%, speaking, traditional in we adjust of the of if run then to When levels very extend levels through get went pricing that now where went

you the is believe, what volume the pandemic under what look demand, that we the that as So deferral is curve saw where size and you a as adjusted. is we the roughly post of see area deferral, -- inflation really same at the of that

we talked is and view is state-of-the-art job. DIY seeing measure going our And coming our that's exciting us the space. really that are deferral doing the Ohio, a new because great in that business fabulously, is -- that's is today, up paint as a for tuned spend bit quite we've a So in, team ramp-up the have our is and margins. And we of of plant that a already in

plant are coming story. that's very going And We large in coming again, well, same online. that plumbing is All up Serbia, manufacturing and nicely. have significant, things a plant

in levels. as our We've great paint investments. And including to support for surge growth -- this to SG&A some incentive watching to capacity spend is to closely capacity tuned regards on it, control. the growth business side. normalized seasons starts shape our able selling our demand to our the return our So be got We're with on cost

business ready this stuff this some when So exciting market turns. to do is

Adam Baumgarten

to Plumbing, hear. couple Okay. just questions. And in Got a of Good it. then

retail what could trended you and Maybe of kind you if how growth American And mentioned mix negative across in drove wholesale? segment. the that? through North then Just walk

Keith Allman

components. of couple A

in some seeing to assortment trade from are is the We down the our lower a a entity as on the mid holding of upper don't understanding down I assortment the of in bit bit earlier. piece we assortment. of while assortment, is very part There well play the little trade low talked little very

stable Axor trade now a earlier a end down, for China, also our there seeing with then be we're for sure, bit tends bit a challenged and for mix China of more where consumer. but quarters. In to of there's was of and on, a Hansgrohe geographic brand couple higher it us, So was

geographically a as down, as that's So it. mix goes natural China

for Now calling we're of the that, an mix year. impact Rick, don't on I having said think really we for -- much

Richard Westenberg

No. And quarter-to-quarter Adam, bit performance, to channel a question about your from a there's Yes. comp comparable of perspective. noise

that from of kind So trend low half held first wholesale in And the as actually digits. second really of I'd we've to perspective. guided up single growth solid retail year of to continue it we're really, a in or low the trade plus like we about saw the kind single-digit reasonably segment half the expecting well. and And minus think overall, for

relationship of stability. on pricing cost seeing favorable some the as And that's well expansion adding price led top also to to we're some So margin that, for some that year. our

Adam Baumgarten

Got it. Best luck.

Operator

Michael Your with next line JPMorgan. the question of from comes Rehaut

Unknown Analyst

with your some and Andrew repair sales. for Mike. level on some remodel on thinking cuts maybe the and outlook about here Rose For potential pressure home rate wanted just ask existing high I to

Just the you're curious leaning or outlook? if on upside downside that towards more

Keith Allman

kind of R&R single right be. in think the to calling middle. We're place to away right digits, low it or leaning down the to that's be I and really Not flat

Unknown Analyst

terms commodity in then And it. Got volatility. of

segments Just about to input curious thinking offset that. how on and pricing costs you're across

Richard Westenberg

Sure, Andrew. It's Rick.

our in the a or see slight a take didn't significant half performance. a commodity overall. QX, Plumbing we other. in the be of the year, to we relationship. driver positive saw a we have first I'll back So one the Really, from In commodities And perspective, tailwind segment, way price/cost step

where we As I copper the metal to bit, and elevated some It prices zinc. off as but an we've seen the regards we've here bit observed, about today, as still a uptick all has we of trailed sit of think a inputs. with as paint of think well

So TiOX on that. resin and pressure some there's

see we my comments, a as of bit see of mentioned in headwind year. second as So I a we the opening as, that that half in the

we the the know, as expansion Despite for you costs to margin that really during the actually year, be in a work it really the in expect we costs matter we in ocean a year. that, of saw our Now year, second for of of way both in that and through takes do the its half to quarter, are, time inflation granted, commodity that hit expecting bit freight the segments. P&L. But second of our the given have the inventory really later half headwind and our

we're profit able the closely, our that year thus, we're expectations in second We're and the monitoring so the of operating And headwinds. expansion And very overall. for we've raised margin to we do half margin overcome expect those accordingly. and But taking action to year. margin expansion have

Unknown Analyst

that appreciate color. additional Really

Operator

with of from Your line comes next the Pettinari question Citigroup. Anthony

Anthony Pettinari

has of better Or For sort your volume if what there, think with variance think of industry? DIY market? bit And it? bit maybe sort you any tracked DIY been performance year-to-date, than little do driving a or underlying kind the paint of line you there's the in worse little volumes do a your have is

Keith Allman

multiple particularly this particularly and talk when go to subsegments it's that entire size, next. -- very market across difficult I've But really you X down accurately into getting channels, Anthony, our the from talked about of through about company. pin quarter DIY to and it's

a caveat here. that's So major

beginning look when -- first the fill in of quarter the system year the the the there performed the that half very year end at was we we last was in some this second little of of a first was But of that last volume bit in year where because quarter.

can what how for we versus as competition, what So easy the we well. at out we half, from our are hear and at performing when you that's look not it and we first from look tease

cetera. have to DIY much segment, particular et a is you what in what to listen in is how Sometimes DIY segment, another really versus hard understand is is

foot traffic productive a an generating But partner couple we're to Home the with it's we as share. we're serving focused of job a phenomenal which think and there. that's outstanding is partnership have very the Depot on both thing, same Obviously, XX think customer. merchandising with of some in and our years, we're attributable does things. right holding who And we The We

big a that's piece. So

can When Behr at of a from look and equity. terms for And strong both there. are brand. on best quality brand then sources, And I you make look awareness service or brand we collaboration very at argument whether you the out outside the that's in Behr that DIY based brand,

a So up. as that ready bit turn team well before, I knowing business, capacity. said challenged to DIY margins, when starts with our is structure And surge I've in is demonstrated around, We're a cost full again, this with good by and as feel now. extremely tuned we about our fired the the channel are ready

look lower And we it. certainly, the think share but significant And you of side the of demonstrated to frankly, total our years piece I our holding only the own. at the are the when not pro So market. gain some business, over hold ability

going value of to We we're space in. white to proposition lot have that a invest nice continue a and

Anthony Pettinari

helpful. Okay. just we've existing low million, wondering sales then $X really that different your levels. seen historically That's of impacting parts And very is how And I'm business. home below just

in Masco you just slowdown or which by us can the least the impacted home at U.S. If of sales maybe remind kind in are parts of impacted most maybe existing

Keith Allman

to last it's they taste. the talking us and not is sales people I new But particularly talk million their before a back paints you or sell, their when homes about peel X million numbers, an base. existing really much it owner million on paint More impact, of X existing than you're better really. home mean XXX for about you paint home when sales the

might the that somewhere an think XX%, increase have XX% And existing period number when that during you for around transition. DIY I turnover, in is home spend the

double-digit you through for get stability and investors. cycles XX% the repair of you EPS through We're cycles resilience portfolio. purposefully tuned bump XXX take low very, very, on out very remodel and into impact. those, to that So a really ticket a small and it's X and give to deliver

correlation -- that's confidence, there And it. equity. good we why And we is home so existing the feel key consumer about

more So yes, you is material business it's the of in numbers. existing better turnover, our home terms when that not obviously, but at really for look

Operator

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

Unknown Analyst

is This Mike. Chris on for

DIY to the comments. back going Just paint

quarter? would I you you around saw last dynamics more think DIY today characterize consumer in earlier you I how sensitive comment what mean a to the said a made DIY, relative of you kind in

low out what And double-digit then in those down back price within in be decline the your helpful. Any versus XQ. and on that both half, the you expectations would sales could looked drivers break volume way

Keith Allman

just talking business, our any perspective in there's any technical have and I numbers don't have the said, difference exposed on DIY, a a basis X say But and from some in I don't quarter think being I quarter-by-quarter you volumes this the the last were because versus at to double to difference I getting as as DIY other really quarter see quarter. channel as the the when don't quarter digit really down you really far look straddle there look year-over-year. low in that half, that.

Richard Westenberg

really per digits the any se down and year, single first was trend on. high the half That's look we mean, DIY And think half why look mentioned, Chris, first there really wasn't in to a -- as I at add was it that Yes, the of it we perspective. just reactor. -- to at to more from within appropriate we it's half focus

other it and question price. volume I pertains your think as to to

articulated low relationship we've we've a the down both broken and know Depot headwinds. were Home got as but neutrality. the of haven't in agreement remainder. terms with And volume We price, cost down a specifics, terms of past, they single-digit in with Price I was in commodity The an the

second a is downs cost that. decrease mentioned last And so we the as saw part of we commodity what we saw of provided previously, consequence, as we as some year in half price

half the so implication. year. really price And the see itself of year. carryover that the we'll kind And this second It's that's you're of manifesting what through carry seeing

DIY we paint of see of the articulated, we enter year, a dynamic. in second half some it as is But the as do comp improvement

down that based And be of actions expect Some digits do by DIY of year, would ultimately it's team. the mid-single the taken we actions. really off for those

Unknown Analyst

look Plumbing. destock shifting Understood. the That's channel that just notable over How aware restock inventories or then there any of to of? And today? helpful. Is kind be dynamics we should do

Keith Allman

No. out but really I to get adjustments the ordinary. there's nothing mean seasonality always for of seasons, ready selling

Operator

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

Richard Reid

for maybe moment but segment, Arc Dec the the about lighting on here. talk focus to Wanted a business

in made to think is moves have correct. last quarter. lighting, math growth this I might some sequentially like Looks you stabilize my improved

opportunities you've further kind what to you've us subsegment. the stabilize of here And the done are line remind doing top what been streamlining Just because here?

Keith Allman

Yes, Sam, memory. question, and I the appreciate good

of are months expecting that complements the that DAP improved we're we the is which down line seeing as to positive hardware team know, with the business, Keith cost top really be say let's flat would to going a to single actions relative business some low had forward And opportunistic say, be ago. breakdowns to where expectations, less cutting and a as were, streamlining the performance has lines for So which definitely within -- what industry performance you business, provide, it positioned would pricing, that course, the line really line forward. We dynamics regards of profitable top with the R&R few we're sequentially, and is to lighting don't in segment. earlier, taken the digits. to we financials has of I lighting has to and lines be and success paint business our them really with articulated regards to business, trajectory going exiting segment, the proactive in of But

Richard Reid

then pricing, And for to between we what's helpful. a versus thinking retail kind of outlook context pricing channels, but wanted of are there noticeable then any and switch kind of divergence I'm gears -- in thinking embedded retail thinking the That's again, differences channel little of were be in deeper terms pricing wholesale on from perspective, XH of plumbing your wholesale? should any maybe dig a I versus in here? And there quickly, of really kind in in

Keith Allman

But perspective, price team capturing perspective, X% trade our get can for From it's I and that positive that was Sam. say reflection Plumbing would a -- really a value. I channel which we're was a robust. quarter. it from in specifically. in focused taking portfolio brands don't the that the segment, overall, pricing say pretty say from our was, would on contributor I we strong it product in is really the of we Yes, for speak into perspective, that would a

in would single-digit I in low generally stick we with this and the and profitable that really ecosystem. at got a results positive guidance that's across sure growth for and segment work hand of quarter But hand make But I pricing our year. terms level, we've our would say really expectations, our to our customers to the

Operator

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

Susan Maklari

segments. guess as of come further are were, as to try the some first across benefits those And I broader cost on question you've close you did today quarter you My how together. bit longer-term they've some continue the see both on working gap is you to what benefit Can mentioned of we those out, with more the where that and just savings those some think you that that and in initiatives of talk realize margin been the about ability guide? you relative a the

Keith Allman

where are pipeline actual at then the pipelines because measures continuous very give attack the how and of five-step and is. at the on, terms can we we we size call in them measure in they what a Kaizen those process we flow-through event. And and have look execute in look by we we validate we drive bit flavor you of benefit into a We large, system drives through. finance of and module for taking gap that our putting our little it way the want we this to it performance a down improvement to a and that So measure operating Masco are and

it So we're P&L. into we that putting make sure the

what benefit really discrete improvement that profile initiatives leadership they're is system is small through is to about. the and And So our the items. that of manage ability the pretty these

not our our of also develop it's to and performance, business only but leaders. developing terms it's in margin helping So

So my modules. point is they're pretty small

that on that like constraint the to drive that of more of we've in being That's more we big from that small a a capacity And over events. business things efficient. a taken multiple event has a in off that waiting output factory demand able the expected identifying are particular done rest time, output. capacity our isn't area where and than So so improvement

instead overhead able We personnel events over balancing to and half jammed of running a So that on to productive shift, on about give which that series productivity. On that's shifts a into then thing. on shift, maintenance people that the It's we're personnel. takes sustain and equipment productivity. off on working and and shift of second one taking supervisory semi-variable Kaizen of then do get sort to time, us that's more overtime shift shifts

so standardization or we versus it's our as we with so line, how On whether execute better our can leadership competition. initiatives are And said, benefits call our in salaried the of these we to sales more train as how the we and all things execution, make I growth force through highlighting effectively that in better it's top coming that our better folks it's in sales that, and leaders well. are can the segmentation developing

series steps click hard So we very stepping. through avoid to work a it's then that and back small of

Susan Maklari

great then turning color. That's to And capital Okay. allocation.

of looking? M&A. You still are million Anything or M&A, that $XXX there? pipeline on track of Any repurchases bolt-on that for comment on is note how

Keith Allman

where a sell and from a to still feeling bit little who ready little are to be of it's there a and of there's where change are seeing period. of to last sell valuation what where -- a that lower quarter. bit lot we're a we ready sort say deflated with rates and Not of people whole valuations the are are a quiet out would I little

we're paint evaluating that and capital learn us, and changed, I'll can and that work looking Susan, there can and of But businesses out it. leverage. we're we there's that plenty focused you, allocation has we for on plumbing our that from for strategy not tell we're

to looking a it, of a to say, in smallish, call range. But our is SaunaXXX we about look United before. a when of example bring great they one significant think the would thing network we I creation That's at the in are we on. was can offer, the extensive business that It that for. and And that as deal business amount what continue able technology it work same I we're is that to States. of value through million that what sort $XXX was flow

Operator

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

Keith Hughes

you the discussed call, -- some coming. input had inflation in inflation Earlier

and you offsetting price about need In be that you can segment. do using think increases paint versus terms we'll the talk of that, Plumbing

Richard Westenberg

Keith. Sure.

freight, freight opening as of a So going headwind earlier as ocean the during half mentioned enter we you to we that some second a my and commodity I and comments an Q&A, alluded to, here it's see ocean be the bit serving do inflation of in year. and as

question, take lever a your see Plumbing in we're that. really, Really, continuing segment Plumbing segment. single-digit low with an Plumbing to that's pricing to we increases that. to But to do offset Specific to the as our We'll continue price dynamic. regards

As it's we where a in to the net relative input it to between our really end regard. regards pertains up our partner with costs commodity price and be balance that going to coatings, to or retail

no comment So really there.

operational to down. Keith though, has to done tremendous has cost and I with addition in times, alluded as would price, couple a say, team the to of work Behr driving efficiencies

the the of tighter. not part price in also and half that equation, year but to. half, to drive regards It's is we're seeing we'll here with of it's that second margins headwind, priced. So we've to reduction to cost continue the in running commodity deliver operational it's guided exclusively offsetting first And business that the certainly, overall, the the efficiency, and that

Operator

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

Masco (MAS) 25 Jul 242024 Q2 Earnings call transcript