Mohawk Industries (MHK) 26 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

James Brunk	executive
Jeff Lorberbaum	executive
William Christopher Wellborn	executive
Eric Bosshard	analyst
David S. MacGregor	analyst
Susan Maklari	analyst
Michael Dahl	analyst
Keith Hughes	analyst
Michael Rehaut	analyst
Philip Ng	analyst
Matthew Bouley	analyst
Adam Baumgarten	analyst
Kathryn Thompson	analyst
Rafe Jadrosich	analyst
Laura Champine	analyst

Call transcript

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Operator

Good morning, everyone, and welcome to the Mohawk Industries Second Quarter 2024 Earnings Conference Call [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to James Brunk. Please go ahead.

James Brunk

Thank you, Jamie. Good morning, everyone. Welcome to Mohawk Industries' quarterly investor call.

call Chris Lorberbaum, Operating Wellborn, today's Executive and Officer. on and Officer; President me are Chairman Jeff Chief Joining and Chief not and make remind everyone Today, second our statements, press third on as you statements that call which limited of provide that Private may with and performance forward-looking Securities Commission. we quarter to those we'll our uncertainties, the Litigation are XXXX, this subject the guidance of and and like the to XXXX. I'd release for in during in update defined including, quarter the forth company's include Act but to, set release Exchange our risks various Reform Securities press and filings periodic may numbers. call This discussion of include non-GAAP

refer the X-K press the For a reconciliation section of Investors call any that, please our release over and to non-GAAP I'll in our amounts, to website. With of Jeff. turn to Form GAAP

Jeff Lorberbaum

Jim. Thanks,

on including restructuring factors Our our controllable of second and containment the cost business, focus our actions. initiatives, reflected performance quarter sales

Our the quarter billion, year. to $X.X net sales compared for down last X.X% were

Our up as productivity by $X, of pressures offset result as costs, and X% and pricing and foreign material per mix headwinds. adjusted on restructuring and a as initiatives share well market year-over-year, partially exchange lower earnings energy were

XXX,XXX that, generated remain purchased business will in our We total shares the of the million. or of stock confident We free of approximately the approximately about worldwide a $XX we flow X.X% time, during quarter markets future $XXX In and for cash $XXX million recover. quarter, million for optimistic year-to-date. our of our

channel softness the around residential, market some category is the our exceeded results continues expectations in second Our soft despite although conditions globe. outperform commercial to occurring. The quarter

across products is demand long-term our for purchases the While weak. remains geographies residential strong, our

volumes product large consumers the the remodeling consumers due offset discretionary During competitive many to the inflation helped taken pressure down the though about as were defer and trading greatest actions Residential is in categories under by us, gains uncertainties to improve and the we've quarter, pricing. purchases future.

influenced rates, mortgage rates, high by to addition, on remodeling In housing significantly homeowners. remains suppressed due locked-in which is turnover and effect home the prices flooring elevated

$XX costs segments across million generate throughout will will million, business administrative warehouses, We'll of this $XX Global into of our extending would and cash cost efficiencies. conditions, annualized idling restructuring our aligning approximately segment, align production actions and increase reduce retire to enhance with of all consolidate vary manufacturing reduce about our lower project, The with XXXX 'XX. In be approximately our Ceramic will by a total efficient and to we product recognized which we're further some initiating The million. of utilization, that regional some and rationalize actions productive cost with optimize simplify North $XXX year. $XXX We'll equipment savings additional complexity million plant to costs. Flooring To time is less and to manufacturing line leverage by operations America $XX million, current execution our offering. of some technology these less

managing we'll and with the XXXX. lower reduce anticipated will sales initiatives our operating enhancing measures our by and stimulate year costs, Reserve our had would U.S. the assets. increasing rates this portfolio that and product conditions, many World, opportunities, these, $XX sector. decommission are including costs our the capital. Economists teams to of current administrative approximately restructuring housing manage Federal that working to distribution will Rest actions Flooring In implementing lower million previous overhead our These in and complement inefficient streamline Along and productivity

dropped After Fed has that rates intends inflation industry slow activity begins many the to Price should as one given gas demand years. the rates, once leaders, anticipate our year emissions online and the are July have lower our If at markets our taking rate America's to reduction we a over we cut. climate wait of Index time, which Sustainability be Fed past begun Today, in at benefit reduce actions. before September named economic pent-up Report, to of While purchases. In central next predicting can June, our banks in it in sufficiently four again, consumer Mohawk mohawksustainability.com. published April, increases U.S. until indicated USA Consumer some XXth Annual greenhouse found XX, flooring the On already

our Now quarter. for the performance financial review second Jim will

James Brunk

million. the were X.X%. in restructuring reported an million basis operating an million charges year income was That $XX cost or $XXX as year. Operating prior basis, X.X% expenses $XX quarter. Gross as the prior quarter million price term you, adjusted the the to All XX.X% as was Sales margin mix expense versus and with over $XX prior see XX.X% prior us SG&A million, earlier strongest Global the just the Thank a points improvement loans on is with new That's or as continue pressures, X.X%. lower overall year to the as an versus commercial segments for of year, for $XX flow versus $XXX cash mix. Ceramic residential year. the XX in primarily $X.X the quarter input adjusted remodeling That's with with an having the This was Jeff. costs of and the adjusted the was due reported construction on trailing increased period. quarter of our the reported offset year. and gains in of an the payoff adjusted million. Interest on gives Nonrecurring income to That's line FX price a channels on the from price/mix the in of or due were million and strong for quarter the the offsetting basis decline productivity reported unfavorable basis. and $XXX and and million XX.X% in and billion. million quarter X.X% XX.X% $XX weakness of XX.X% down basis for productivity $XX and input in lower expense prior

non-GAAP Our prior year. XX.X% XX.X% versus in rate tax was the

to We versus earnings expect XX% That reported QX's between to year on an on of per and prior year. or XX% of share full the an adjusted increase be rate an XX% approximately of the $X. between us X% XX%. rate basis basis a be and gives That's $X.XX and

Turning on billion. to the reported X.X% segments. Global X.X% sales adjusted Ceramic had a just decrease and basis. That's over of $X.X as an

pricing-aggressive. volume industry remains constrained Our and

various to slowing, new new While we commercial, try residential is our across residential. geographies, products is are mix outperforming construction our remodeling, investing though and improve than to stronger in

wood product sales our hospitality, In versus share $XX lower prior are builder and sector. adjusted unfavorable waterproof productivity were or or decrease $XXX government an overall our an expanding million, and million costs channels was mix Operating which line as year, education to America, and million was LVT $XX.X a laminate a million, continues million in input $XX of reported, is million, and commercial, and product the Flooring price $XX volume. In as residential even income lower retail the take offset FX X.X%, in of with increase outperformance on $XX the the North X.X% with basis the of channels. though driving of alternative the as in the

has million the basis XXX of Flooring of in as points is an slow expansion adjusted of conditions an the X% as taken costs were increase an offset our basis of on decrease home increase customer $XX remain lead introduction prior That did continued $XX also though the year larger-ticket on the panels. by mix spending market and basis and price X.X%. and pressure, the versus adjusted base, strength laminate, decrease World, our million reported was of input mix our sales with volume on Rest net million. of LVT team, and Pricing income to as million products in million. And of productivity in an $XX through lower weakness and Operating or X.X% That's under new unit consumer discretionary $XX sales in and weak $XXX an of actions projects.

productivity XX.X% $XX with million, quarter, input eliminations adjusted a during Operating Corporate versus to unfavorable $XX with $XX XX expected million. costs XXXX basis by impact million. of margin. million prior was basis year, and points in That's million. reduction an positive increased That's by $XX of line a operating on year, of led $XX $XX income the mix offset prior of approximately price million, the be in and were increase

flat $XX $X.X of approximately were just year to under sheet. and $XXX and equivalents the stands just period cash overall almost And billion, million. in the CapEx compared $X.X Cash of shy D&A to in the $XXX the decrease million, D&A were with bringing cash at $XXX $XXX million. balance balance remained versus total turning $XXX with flow invest Inventories to current plans The to with plant is the impact debt net to of costs company with approximately $XX prior X.Xx in turn our slightly over I that, million at cash Chris purchasing to review and of billion. a of and in by prior liquidity strong, year-over-year operational though, approximately $X.X at QX will shy shares just very year quarter. With our approximately $X.X XXX million. volumes million, at reductions approximately year-to-date Inventory of The of increased Now during free company of That's the quarter $XXX the sheet due it flow performance. inventory increase. $XX as to keep with million the relatively FX billion, of equipment plan, million versus in XXX of days billion, to leverage million year. year-end. Property, the and

William Christopher Wellborn

utilization impact pricing our Jim. industry Global markets as Thank competitive Ceramic, to you, and continues remain In reduced margins. highly

by price the impact residential is weaker decreases freight offset consumers to In was quarter, trading mix down inflation Our in costs. and labor lower activity material of the remodeling given soft energy and and points.

the styles XX, with and investigations U.S. of and between Commerce countervailing our in reduction initiatives, the streamlining floor reengineering, tile product and create collections are formats. On trade implementing are with leading-edge from allow In higher-value tile differentiation superior improvements U.S. XXX%. tile rectifying printing, projects assets functions. duty and These of and could imported India. restructuring organization to and improve XXX% antidumping segment, visuals we mix, administrative believes wall the ceramic us product tariffs and of addition Department The lead process our across May we numerous polishing sizes, technologies. to this investing cost including announced commencement to To

other in India's import and extensive create high-end value as Mexico and domestic to manufacturing our advantages commercial widespread participation duties, and year we design investigating U.S., unit the dumping, options. has similar Europe, styling exceeded enhancing infrastructure are currently and our distribution builder In last are our products. sales manufacturing Given leveraged higher the our capabilities, markets increased sectors. In

help should Our offering energy spending. furniture which markets. prices increase across the increase porcelain to from discretionary as slab demand consumer continues expansion our countertop has European last declined flooring, enhanced and year,

in Rest Markets such have and lower X, key rates Mexico implemented segment, remain we Central organizations campaigns. countries, our Latin inflation as announced are pressures inflationary with remain Flooring consumer strategic duties. to we conditions actions our may challenging this initiating Declining additional Brazil, our In sales and market performance America cuts Central both on offering, led product drive World we product to the offset on and spending. operational rate initiating we promotions focused Banks cuts. interest implementing restructured June increases sales, slow additional despite of acquisitions. of In Mexico, to strategies. In In marketing discretionary and have and difficult the and European the follow. new the maximize price enhancing In environment, constrained to executing Bank improvements import distribution and

lower sales As prior and and levels. mix LVT remained of result year low costs. partially initiatives, under a by our input laminate, Pricing offset pressure, in from volumes these improved panels

restructuring to costs. actions, and enhance our projects improve labor we launching to addition In lower productivity, are many yields

flooring align are costs with reducing conditions. We consolidating centers regional logistics and distribution present to

our are flexible improving We residential and in our we're rigid mix to the category. program products, from of conversion completing our sheet vinyl LVT

Our customer we grew existing laminate enhanced and our as customers. base volumes expanded sales with

segment, promotions. though offset despite gains were results actions are new have escalates. panels projects contributed retail being manufacturing and price markets and associated improvement mix and given improved The market and and Zealand, to mix Australia to in margins in volume insulation our conditions, and businesses some as margin our industry channels, fewer through Increased declined volumes dynamics. business. In of by North America competition stronger New initiated and partially In improve price and products our challenging our year-over-year productivity our Flooring

efficiencies share Our accelerating. with and margins benefited XXXX from productivity operational home our are polyester restructuring. This our logistics continuing value-oriented projects. gains, consumers expanded turnover with lower level improvements, increasing Both lowest luxury weak, the their our the and by collections remains Residential year, products market. larger costs, at homebuilders driven who we sales have of to U.S. are since carpet relationships delay of and input remodeling

LVT our builder channels. the and laminate collections of in Sales retailer were stronger and

to channels remarks. leading, are Our to being for recent waterproof commercial laminate you outperform call demand expansion return hospitality, with is flooring. residential, satisfy and ramping education The up sector our though closing I'll higher initiated. Jeff, government for projects the fewer continues to

Jeff Lorberbaum

anticipate overhead inflation introductions, sales interest with our impacting rates, aspects business, reducing managing to we conditions our controllable third We're we're product weak current rationalizing environment, of assets. quarter, elevated you. innovative present efficient plans Thank In housing in less continuing the our costs. optimize and markets. the executing revenues and and the including

in reducing operations by streamlining product complexity our portfolios. and processes We're

when markets enhance our and Our recover. initiatives restructuring savings deliver will performance significant our

and labor energy from trading industry freight given inflation. In costs, spending raw third quarter, down. will partially consumer We and pricing consumers continue lower continue purchases volumes, pressures low the on offset large we by to material and constrained benefit anticipate

usual, impact our will As holidays summer sales European performance. seasonally and

Given charges. our these factors, we $X.XX, quarter be third between and $X.XX EPS other excluding to or restructuring adjusted onetime anticipate

and we're to industry improves. decline rebounds. require home short-term and when rates to homeowners' satisfy that category preparing homes our Residential remodeling is as on should recovery interest the demand, manage we industry's the environment, capitalize demand needs. While Across new aging our needed the confidence consumer the lead regions, and construction meet is will remodeling to occurs largest

glad product your our enhance participation questions. market recovers. will our the commercial flooring optimize new be to world's and addition, manufacturer capabilities economy and products, will initiated as strengthens the as with the financial investments In to results largest strength as be projects our We'll take the now

Operator

our [Operator Cleveland from And comes Research. first Instructions] question Eric today Bosshard from

Eric Bosshard

years. or through in whichever in capacity projects curious, identified a one? why it, that now? you've you asked the The I'm like these gone not cost-out The included few here, and couple why the cost program, way, different call last of just a they take you've restructuring last Or out were

Jeff Lorberbaum

the into where a before at be looking think time significant still it we're there'll we next when market now, year. see Well, to we is some recovery

us the going through we're the to trying we're taking half, profits, term short it in better the we work costs so second increase position our and recovers. long And and the will to how the will And believe in market that optimize term. more as both out also profitability

Eric Bosshard

do of Within year the as capacity? next you assumption rightsize this, considering think the growth guess, have you this, in solving to 'XX, I in second for component as you're or or scenarios about the capacity is that? growth you how optimize much embedded What support capacity growth

Jeff Lorberbaum

consumer will predict today impact at. pent-up can't the cycle think and we the positively going but housing timing As rates activity, our that inflation, remodeling next low year, significant about we markets, impact home for interest remodeling, Demand move have we're start what commercial in from on which in we think The should the seeing it. point it's to there's think housing remains the a confidence, category. the we all strong, decline change of of sales, demand

we get improves, the leverage product these it and we'll in cost As structures our mix. think

invested we're in slab businesses the putting On business, stuff business we laminate insulation have opportunities the We rate business, would countertop we and higher areas we investments have individual quartz, those the business in those. in for this growth the -- growth, those believe the most that in businesses. an with in is the and most the -- and the Europe we have where pieces thought we the put have the

ready years as of few take improve. they the next we're advantage So to

Operator

from from comes question David MacGregor Our Longbow Research. next

David S. MacGregor

reductions, about we're thinking numbers how topic think guess, the reporting aggregate I the you just the you of across I -- restructuring which the on cost and just can savings, while on talk how segments? would fall that anticipated that, three some shared

James Brunk

across took initial $XXX fairly and look America evenly program that segments, at all, we actions announced, the more. million $XXX three by the Flooring that bit see last $XXX you realized maybe with we That of a year-end. of we've spread million As the about should second million year, -- was little through restructuring first savings, all of quarter, about North about approximately the the

today look more America this the we continuing to then than With at SG&A, that, will the announced And to in as announcement and recognized million, logistics. $XX would year, the are North $XX a $XXX as additional look of you have at benefits larger other the recently actions. segments million in And the reductions be Flooring piece operations into said, year. million all businesses much following

David S. MacGregor

a to to than little fewer the as commercial follow-up, your you being little seeing starting get a business softness, is more wanted about a this And though, noted business, now I through just residential. initiated. into you And creep more where some to you're talk strength projects

Just there talk the Commercial in growth And business? half we versus the is commercial? what through And of institutional there. second should about what you're anticipate between a Mainstreet level seeing difference

Jeff Lorberbaum

is residential. You're correct. Commercial better holding up than

seeing some of postponement are projects new We it. and slowing in

If the for then lag pricing longer this increasing longer increase thing, just given that differentiation in hospitality, that out keep We're these to ones planning accounts, macro commercial us you construction so and and do to take participation resilient, government marketplace. are the come are more even and though our in with change, the a as also our is with is takes by in between them. strategic outperforming categories, improvement we because, times channels, taking large the news more And mind, of things there's that actions good them. The look we're penetration retail, education.

David S. MacGregor

what growth might the what see you there? is for you about talk second you think can half, And Okay. the

Jeff Lorberbaum

over but somewhat. be I down is slowing the all We're somewhat. place, projecting mean, market, it's by And to by it different channel, it's going

Operator

Maklari question Goldman next comes Our from Susan Sachs. from

Susan Maklari

the question a my Jeff, business the you're first bit about how is products. driving through

of differentiation well focused stressing the things. about Can on of as or as the you've One you're the that in those those benefits is you're you things mentioned that side what talk that a of those are some product features cost products? bit

And on should into in those they coming year half either shift? perspective? contribute mix perhaps that year as top as how in profitability of what for gain well line the the mean can this or business a the about even terms over back next we could think the of quarters, what And traction as

Jeff Lorberbaum

new in putting textures, continued and Sure. one with three-dimensional them we've the products, and put to products, in category shapes different intensity, different surfaces, assets and color every out new ceramic, is, new participating. invest In make we in marketplace tiles that can bringing the sizes. In is

will In LVT, renewable textures. it as with actually actions core, taken also introduced different laminate, enhance as And impact both polymer we've can category call that we've the features which acoustics go a coloration we that and sound the and core, we introduced a the durability we've we another in through.

most in features up end, as benefits business picks different back the the marketplace is goes that category mid-price like of that's a every better, the higher-value part part, end the retail in the businesses, technologies and come in through and middle these bottom and consumers features is come introducing lot has get as the this product positive more in doing we're which we're we the confident. even points. been countertop the have the market of biggest doing high veining the our countertop, And happened quartz affected, will affected. when And impact is And out. What's retail,

Susan Maklari

the $XX should you're some trajectory sign having better a share about That's encouraging Can Is visibility that maybe greater drove a you perhaps and it to And decision about confidence it do was take here? feeling as of we see talk and of you your quarter. of things buybacks business? the the sign that turned that? we've it a forward in the corner then from you in Okay. to And bit what did million helpful.

Jeff Lorberbaum

end answered We're I me. for question my think reaching of probably we the that cycle. more you've confident the are

confident can't We that taking the know predict they're have recover. short-term going the pressures additional moment, costs to to we the actions markets out. recover. to are but going We We're taken additional manage by

So time it's a good buy shares. to

Susan Maklari

that And in the maybe future? do mean does of that them you'll more

Jeff Lorberbaum

share as allocation cycles, as And the sheet, multiple strong. continue we'll know, Well, out we've is coming of our past industry these capital opportunities repurchases In balance our as acquisitions. recovers to of part you strategy. things with had evaluate

Operator

Capital Our from question Dahl comes Mike RBC Markets. from next

Michael Dahl

Maybe that I half. the half for what's first question down Can and think was and could prior commercial. you in thinking about as how growth, been embedded line organically you're you've mid-single a about XQ it standpoint like out top sounded from standpoint zoom that talk XQ digits just well? top -- the around second specific we line a from to into

Jeff Lorberbaum

changing this just and and low don't the see continued At pressure conditions continuation the consumer weak the Sure. where pricing present is. the changing in point, we've with in demand all of third we anything quarter, industry in a on don't it built from anticipate and mix the We period much and utilization.

products trading residential the because construction a then but to we better-quality our buy channels. a than the down margin still bit that's see new just little is continuing. tend may we be softening We they And compressed. other highest the remodeling everybody, remodeling And to remind have so business not business see lot. And

going In And see and improvements take addition, pulls it holidays, then, forget slower. been to down third actions seasonally remind compared we're some don't always to to we've last quarter quarter. everybody, European from year, they the the our general, different all we're in third And anticipating, off is taking.

go into into And it home holidays again, of reducing the seasonality we won't people commercial the declines with other Banks think things we and but rates, that expect start we on the we spend next the fourth quarter, than Central impact feel then, that the year. probably probably on go until will us, where projects. you If

we industry, are the as which unabsorbed go start Other we inventory further And we built we than with guess, -- we means volume have hours, overheads where of pieces. cost in could maintain and we're I that, to this, through. is out, given then, out in seeing our in as get into our discipline increases shutdowns as continued going that different levels low

And things other changes the two What in actually one as markets consider, fourth quarter, we the have just additional have need period days the to future raise make happen, comment, the as is in and there? those due the we'll we do way to calendar falls. else change? any prices the to In

Michael Dahl

Got it.

Okay. That's really comprehensive.

I actions a then so in implies some then which, follow-up seasonality, to the of but question, As seasonality. your taking. status obviously quo. the you like your line, have term, guess But top sounds margin takes near flattish, operating sequentially guide kind the that of normal I think still some that puts around point, you're is and there's

can despite you here guess, to these of I top half ability speak year margins back in improve to the So the line pressures? from to, the continue

Jeff Lorberbaum

actions I rather we're the of the gave most you internal we the Well, marketplace. the mean, coming the third taking improvements expectations than is for from that quarter

But said, are and there's don't some maybe places. mix. it volume, we on categories the different half and as product could same However, seeing know, we the or improvements huge I time, almost still pricing in at pressure as be

being marketplace second up So in anything the by offset we're the half. volume in and mix pricing piece the that picking in is the

Operator

from Truist. from Our Keith Hughes comes next question

Keith Hughes

year-over-year? up America LVT North and I Flooring called in release, guess, In out you laminate. the those in the businesses the question, comments, prepared were and

Jeff Lorberbaum

businesses improved. through. the in go of we laminate, some as the improved and volumes margins have We've LVT those

all last kinds of also was negative to year, the remember, there pressures have You comparisons. in

and share, gaining we're doing and is those. is LVT self-help laminate our actions, So helping

James Brunk

Keith, Those was two Yes. of that, categories, unit that was up. Jeff volume, from were the mentioning a

Keith Hughes

Okay. the in your Units up -- question. earlier it's last comment both? And were Great.

of up That think your your are to It's remarkable strong. volume. are it markets I I that statement, you gain. in that correctly. categories heard said share say? if don't I Is fair a like half think product feels

Jeff Lorberbaum

Remember, It ago, about comparisons. some of it, is the were with compete imports. high different a we structures, in a I worldwide year struggling different with more I'm lot gas Europe, depressed. difficult And and really Europe, a prices against mean, parts the talking with to pieces. In market cost with was market

marketplaces taken I in to different So we've us. actions mean, help

think some. distribution I in mean, a And increasing we're our I well. think executing market, but tough that we're I it's

Operator

Our from comes Michael JPMorgan. question Rehaut next from

Michael Rehaut

get if the to into a sales for kind that, from came than And Question. the a cause to to upside perhaps any guide? margin you continuing expected, either and quarter some that just there trends maybe those I'd North what love better remain place there perhaps, try in within, America either drove were on a example, the sense the specific perspective quarter more your little of and second areas broadly if see result if that similar side? of third also or XQ in the might upside ostensibly that, trends might drive of these that the

Jeff Lorberbaum

go have different every takes quit to in a happening, it are huge in -- whatever vacation, the don't know said, the It the a just XQ holidays assumption that that into different third on continue is second country. spending when had has people I mean, Europe, money. conditions you present forget, quarter has, I they the the in as guide And The dip -- got quarter.

So it our period. pulls down

bring pricing when on expand you are optimize markets, marketplaces. people difficult. I industries mix, can't our have pressures to capital it's aggressiveness helping throughputs, everybody I new mean, distribution trying but trying and enough. the The investments our to satisfy with the in is markets, emphasize this, low And running huge at different,

James Brunk

America, investing mean, in generally, all segments, talking some and demand Flooring the on mix costs, Mike, profitability like gets remarks, while the Yes. in activities reduction should in three Jeff's and later prepared across managing cost which specifically as our about new recovery. we're is North on question, those from this Then benefiting and your really controllable still products, I the improve pent-up restructuring of business released

Michael Rehaut

thinking question. count to in the sense the if in where if line easier The count and of business, about didn't basis both really average you're top looking just about an was in XQ year. there in a really of didn't similar consolidated in the the move think fourth just get is comp? And much. XQ. to additional how could technically, slight sales your terms technical decline share how then, just Secondly, I that that quarter, for wanted we're an move I share half back the wondering a throw to is particularly XQ. on that much Currently, for The

share that count had any we though. XQ? Should in share buyback, share see reflected issuance share around still might count Or You to the keep XX offset the that is the in expect there million? fully

James Brunk

so a depends the and weighted For each of purchased. it when, average, the shares last on obviously, it is question, was

So start you'll go impact then see full of as and more for the you QX the year. into to

So as be go of change there some the balance the out you will year.

the just as line, the and our said, terms half, top In we remember, But mix. are of also seeing some product in price we've categories. of unit emphasized, Jeff expansion as back have some for you

or even you're on a least, bit offset, at little offset basically up So price being mix. either partially units, very if and it's the by

Operator

Ng question Our Phil comes next from Jefferies. from

Philip Ng

a really a tough on environment. quarter Congrats strong in

hearing. it's might freight, Xx like think, you higher Xx, correctly, of I kind Certainly, could we're costs, least, you coming you what consider seeing at prices. maybe were containers, hinting like that's depending Asia, So at shipping be I up where if Jeff, to from, ocean heard you're raising

that it's So pressure your putting U.S. the lot products that competitors for like LVT and of sort. of a in laminate some of import

portfolio? what back that I'm headwind? a a hearing mean and cost you're there's pricing in maybe increases that that potentially Is curious hearing half. what for Mohawk? price Does on we're least how impact provide does of umbrella? And that does rumblings At that your front, the

William Christopher Wellborn

ocean Well, manufacturing. potential freight I'll our increased the or should improve benefit just and domestic should comment tariffs that

Jeff Lorberbaum

where imported have we'd as changes the everyone the to them, else side, will, it changes. other pass will as through the products, on ocean have freight And

we from On have the be material the prices side this going are increases of we it, now. bottomed, to X that determine now. think and some it's months really In they're hard marketplace, where to seeing

react like we'll going the sooner material, we happens through. to Usually, given happen out have, to we you have whatever low So it's much find We'll movement to but demand demand, when just coming. see manage pricing it upward as and low to have later. go there's not it we have or through if

Philip Ng

prices rumblings But to importers you this any at hearing Jeff, are looking point? are not raise

Jeff Lorberbaum

I rates not don't up significantly. if. I it's to, anything, to they're these freight going mean but are hear have

Philip Ng

you as then you how as hard But times tough does that a rate it's predict say, do uplift maybe get through? mentioned to Could Europe, it's to a this if ask fall, see of ripple And the few timing. we that question let's this U.S., is spring because next year? cuts in soon kind the whether

confidence? parts Like actually lag sales end markets unlocks and existing of locks just sense Do out. what down it your need a to I different [ of to get that turn? cuts we want the coming Maybe of kind provides see rate ]. how shake works Or home these

and what a of of the different means unpack kind parts from -- lag it rate help your and us how it cut Just -- portfolio. standpoint that impacts how

Jeff Lorberbaum

the coming people's the the down, years happen. If it same you happens remodeling market or rates up. may have what -- start And when it of confidence is that pushed-out multiple goes not, works which this as historical, may

economy there it and the limited start that's feeling when about pieces, industry times the very better So picks the they different lag and usually, when starts. up, remodeling consumer sitting there's

housing And and good the typically the type is approved, before when recovery. in to you anywhere to it. by longer budgets more timing get mean, houses, you plan, point XX-month start new typical moving And It followed start which a be your to it, then typically of before the X- and as start help. that things with people I mine. confidence as tends guess those lag seeing of the sector, commercial from more doing takes have existing you That's from

me. is for better Sooner

Philip Ng

fair, R&R to first? But back Is that come in North America? your particularly expect side you would

Jeff Lorberbaum

always It it. does

Operator

comes question Our Bouley next Matthew from from Barclays.

Matthew Bouley

America. think this around the capacity on restructuring, North near new was the product certain recovery? it you might or longer-term it part Or Back your more medium-term for of mentioned changed for in outlook was Flooring I if categories? more weighted that structural I'm be a something the little more curious to of kind a kind of need

yes, decision color kind of any process? that So on

Jeff Lorberbaum

continue manage market will that turn. view to we're our to know don't We it's of timing the year to the in. half was know going We is difficult. have that in circumstances know We we to going the the second the future. turn be that

get near improve all encouraged hurting projects we through to And So to without to long-term all of productivity our the put ways them future. the the term margins utilize their find our together potential to to businesses of in improve their assets.

with some In taken cost We've costs and can ones. assets other out people. in back shut higher we that up, some cases, we've cases, some idled down start we've

runs thing typically it's right you And to over managing when We to the And get us when several thing of have have aggressively to this above-industry doing product Typically, portfolios forget are shape have can back take the GDP. the in it advantage years in. trend turns, to think turns. we And we're the all industry multiple turns, of we at things to years. this growth take best them don't going the slightly lines. when

James Brunk

to to given feel But that have important react we we the Jeff capacity that as we good recovery restructuring to, still reiterate take, that installed it's period. said, about the

Matthew Bouley

it. Got

Okay. near of secondly, into then zooming And That's the helpful. term. kind

out expectation cost? little I and on are would we wider next months? a clearly, I price get that as cost we think, QX. QX would year-over-year stay on difference that and between a price the different I few you additional into on think in negative very the any QX. color little mean, forward, than cost comparisons got bit over these play And how is still Or as price the look in

James Brunk

quarter, to to correct was a was And compared perspective of just then offset just million, that, energy. and year-over-year the really of the material about in which productivity, and That's weaker if are there from wages XXX and million increases million. look material $ close You price/mix to energy, it's in the benefit benefits. $XX you $XX at the

fast But as will see also, less you to year-over-year be benefit, continued cost from over would price second half year. of the benefit pressure. last mix the from there expect and the that Now lower the as year, to each a segments we costs lap forward of you from input

situation. reason, reductions the restructuring Now also, cost additional that to actions Jeff is as out, manage implementing pointed we're or one

Operator

question & Baumgarten Adam Associates. next Zelman from comes Our from

Adam Baumgarten

cost cost actually year-over-year tailwind the basis, input seeing a inflation maybe You input the in gone back -- so less of sequential on or year talked we've about the as through half. being you piece a the Are price far?

Jeff Lorberbaum

of Prices have lot been mean, a fairly buy I we pieces. stable.

So out evolve go. going of again, We'll they're all as these they're there that up. you some going to go have to are see how and going where to come cycles, But up. are they

we it to way so out when manage And have our it of occurs.

James Brunk

The consistent. Yes. was point, that Adam, key very we've been

was bit high the in quarter. quarter you As would second be the as you see that We first less and flowing going through cost year, third point lower quarter. a little fourth to I last compared go expect to continue saw to well. the in as into the the

Adam Baumgarten

gears construction improvement Okay. be in been new home Got Just part it some maybe to seeing, guess, you adoption or I it. end of then of or And there I a the story. laminate, helpful. single-family sort there switching more most an would the guess? perspective, that's or are what Is good both, color from penetration? market

Jeff Lorberbaum

becoming than use more retailers have accepted and/or -- laminate very in limited. picking really they're are commercial an is they business it it are the retail. a because What's builders And It's also to floors missing is it And the alternative utilizing as and markets, up using all from it. LVT. doesn't The at all broad-based. wood happened in that then

and Our better our laminate, make. other visuals makes that laminate look that people have we can unique different technologies

And business, as upper-end the bottom. a so and of of we world the none share at as have markets, the the have well the huge in U.S., to the part laminate mid- commodity if of we

different. value propositions Our equipment is different, our products look are different and the

Operator

Kathryn from Group. comes Research Thompson Our next from question Thompson

Kathryn Thompson

and of market gains product field, and channel what if seeing I could in Based share this you've you on And by these either to how the gained from the channel think talking or you wanted year, work feedback be? that our to may you're categories? by case gains some the see clarify some sustainable

Jeff Lorberbaum

in everybody been the is like marketplace, We've else aggressive being market. the in

people. with We have good relationships

We've marketing and through We products activities. are propositions that been value sales and different. the bringing downturn our in are investing

them and merchandising provide we're in to places business, continue being to increasing rewarded help maximize and distribution. promotions some I our We that and their for think

We with parts, have of business, things to like high-end the ceramic all and -- satisfy the our we ceramic. market freight been able the have

timing, disruptions offerings. instance, we've in improved our been the For commercial styling channels, there's and and where

higher-end So we've become alternatives for Italian for tile, instance.

category, same product and we're the The our each management in costs. at job. an our actions cutting right doing really while, the taking managing time, costs is excellent we're So

James Brunk

in that are is in we Another able unit Europe perspective down, and perspective. more and playing Kathryn costs ceramic. we marketplace. the energy level a the from in be good With in that to where over improved saw coming we And and competitive quarter a QX example, field cost

Jeff Lorberbaum

was hurt. more some our In I our when any were gas hedge compete $XXX, prices the didn't Just were gas high. prices. We ability Europe. to in Europe, really of material prices mean,

were premium we So for everything. paying prices

in year a compete was So I for the capacity huge ago. our there to there's change today than a in mean, marketplace instance, in Europe,

Kathryn Thompson

release you clarify administrative of in much And have technology was understand How about incorporating the leveraging -- you I a items of afternoon. and this yesterday could euphemism lower that a cost-cutting for Great. said to us costs. bit from your that? of little one a terms press just phrase. this Okay. Is AI clarification Just the more more? measures help

Jeff Lorberbaum

we stages seen more at find think organization we're utilize We're programs help in it's analysis to We're to training do in-depth haven't and understanding to looking try to it. trends different going use AI, through ways parts with going We all much before. trying it. see it. of to that initial of our

respond using reduce we're to our end significant. The to but rapidly. it, in at general and we information improve the are businesses, continue and opportunities investing front our keep we're structures and them the really systems, we administrative So internal

Kathryn Thompson

clarify. you're not to -- just So

You're cost improvement not AI not Is fair part be that yet. to you're having necessarily of statement? -- plans of quite point the a

Jeff Lorberbaum

made There's say that is change a ideas, up I have can't but the this to major cost structure they point. in

Operator

America. comes Our Ray Jadrosich Bank next from question from of

Rafe Jadrosich

just the next it's into that we up gains to carries year, gains think spoken on remainder this and about of that the how about, productivity into talk drive decline, your XQ let's then do quarter, And next you've $XX versus continue flattish about and and year. of gains enough say within do year you margin just can in you follow wanted second we that into and XXXX? If how think still million the that, are expansion? about you in to I volume talked some productivity see to the

Jeff Lorberbaum

more a make view. point you these you're benefits try to and then trying them view, the cost volume -- What any cut the the all and throughputs Jim to from keep manage them When keep get Just general to upticks. to out to some try give you pull of to do changes cost down, lower let I'll the going have line. to to having you is is in don't down

back leverage out what and goes limit of expansion happen we margins the the up, these digits we're and to it, we higher and from come the get as double to where as volume try them Now are is, going costs will today. of to

James Brunk

Certainly, story, Rafe. volume a is

more expect As run forward you next, less costs, an reductions. shutdown this steady all you going we are you which to on also facilities the therefore, perspective. have to a and less year view, are pick ideas from to state, unabsorbed the helps interruption continuing bring able productivity for at businesses certainly From into overhead volume up, a cost through look

As example, reductions about XX% capital spending is for cost CapEx, the around I and of talked about innovation. product

year. a So announced of originally million will little recognized a $XXX $XXX as into million evolve the this out, we go year. carryover continue be restructuring last next only savings, have to $XX on the of those really $XX announced, will we'll million from that and still we I just million to as pointed bit we And year, the

Rafe Jadrosich

year-over-year know it's in to just down. higher the I type shipping price? to yet you And have each any then pricing a from And as any sequentially, not reacting But the look an That's impact terms clarify, earlier not of just of you basis, seen segments, costs on did competitors Okay. on you seeing of three across on helpful. are the then stabilization? question, side,

Jeff Lorberbaum

Not yet.

James Brunk

mostly to there your you certainly some sequentially go QX, the no. the through declines. On moderating some move still year, as was area, QX. seeing QX you're sequential biggest though, to question, from it's in the so are but On competitors, but declines, price QX the

Rafe Jadrosich

you than into expect So was down XQ XQ? less XQ, down, from still just it but would XQ into sequentially down,

James Brunk

Yes.

Operator

Our next from question Capital. comes Loop from Laura Champine

Laura Champine

in last -- is the it year-on-year, mix, know getting a just sequentially, mix getting negative follow-on one, your which, is It's in to major better I worse and or but segments? it's three

James Brunk

also Mix is mix, a tough product channel not you you but one have mix. have because only

said, to flip investments about that are mix. side, as on we've But have call. commercial that trying commercial talked Jeff our of as on because the the made, we So to mix, that have slows, will earlier see a really as market stronger negative in we the we on leverage the impact products, --

combination the have you two. the So of

side. So price as we more on pricing look the mix, it's forward, and

Jeff Lorberbaum

going fourth We as we're the don't the year. quarter go in a said, we and third this we even conditions. significant from as see change Just quarter to we into second see think quarter

Operator

over call back Lorberbaum to ladies conference any question-and-answer session. for like gentlemen, I'd closing conclude And to we'll and turn the comments. Jeff our

Jeff Lorberbaum

of We're fundamentals our in long-term the confident industry.

and for the to some Thank well out, come time they're markets. positioned in be but going with are We go to timing there things next to spending the to few taking you housing back your come recovery normal expect us. years. of take different of of advantage And we more the and how all it they out

William Christopher Wellborn

Bye.

James Brunk

Bye.

Operator

today's that, thank do call conference Ladies joining. We you we'll for with presentation. and conclude and gentlemen,

disconnect now lines. may your You

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