Masco Q4 2025 Masco Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Masco Corp Earnings Call
Operator: Good morning, ladies and gentlemen. Welcome to Masco Corporation's Fourth Quarter and Full Year 2025 Conference Call. My name is Danny, and I will be your operator for today's call. As a reminder, today's conference call is being recorded for replay purposes. To ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star, then the number two. I will now turn the call over to Robin Zondervan, Vice President, Investor Relations and FP&A. You may begin.
Operator: Good morning, ladies and gentlemen. Welcome to Masco Corporation's Fourth Quarter and Full Year 2025 Conference Call. My name is Danny, and I will be your operator for today's call. As a reminder, today's conference call is being recorded for replay purposes. To ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star, then the number two. I will now turn the call over to Robin Zondervan, Vice President, Investor Relations and FP&A. You may begin.
Speaker #2: Good and gentlemen , morning , ladies welcome to Corporation's year call . Danny , and 2025 conference operator for Masco today's reminder , conference call is fourth quarter and your today's replay To is As question , for call .
Rachel Smith: Thank you, operator, and good morning, everyone. Welcome to Masco Corporation's 2025 Q4 and Full Year Conference Call. With me today are John Nuti, President and CEO of Masco, and Rick Westenberg, Masco's Vice President and Chief Financial Officer. Our Q4 earnings release and the presentation slides are available on our website under Investor Relations. Following our remarks, we will open the call for analyst questions. Please limit yourself to one question with one follow-up. If we can't take your question now, please call me directly at 313-792-5500. Our statements today will include our views about our future performance, which constitute forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements.
Speaker #2: Relations one yourself to with . If we up now , please call me directly at can't take Investor open the website (313) 792-5500 .
Rachel Smith: We've described these risks and uncertainties in our risk factors and other disclosures in our Form 10-K that we filed with the Securities and Exchange Commission. Our statements will also include non-GAAP financial metrics. Our references to operating profit and earnings per share will be as adjusted, unless otherwise noted. We reconcile these adjusted metrics to GAAP in our earnings release and presentation slides, which are available on our website under Investor Relations. With that, I will now turn the call over to John.
John Nudi: Thank you, Robin. Good morning, everyone, and thank you for joining us. Please turn to slide 5. I want to start today by highlighting some of our key accomplishments from 2025, which we achieved while navigating a dynamic and challenging environment. Following that, I'll turn to our financial results for 2025 and share our expectations for 2026. Starting with our plumbing product segment, we continue to demonstrate our market leadership, even as we work to mitigate the impacts of higher tariff costs. Delta Faucet was awarded the Home Depot Kitchen and Bath Partner of the Year. This award recognized the strength of our brand, customer service, and innovation. Delta also continued to achieve notable market share gains in the e-commerce channel, driven by our industry-leading capabilities that deliver solutions for consumers.
Speaker #3: that , I'll by you for . for and 2025 and share our dynamic of our expectations Starting financial results market to we work to the mitigate
Speaker #3: even as plumbing Depot environment leadership the year
Speaker #3: the costs was Products customer and recognized demonstrate our also continue
Speaker #3: notable market share in the awarded The . industry leading strength of our segment , we deliver continued to start today which we e-commerce Bath award for Delta additional products with industry through market gaining brand , .
John Nudi: At Hansgrohe, we continue to be a global leader, gaining additional market share through premium products with industry-leading designs. Hansgrohe also continues to demonstrate leadership and commitment to sustainability, having recently received multiple awards for corporate strategy and production initiatives at the German Sustainability Projects 2025 award ceremony. At Watkins Wellness, our integration of Sauna360 into our existing dealer network has generated double-digit sales growth in a market with ongoing opportunities for increased household penetration. We also introduced our cold plunge products, further expanding our presence in the consumer wellness market. In our decorative architectural segment, the strength of our brands continued to resonate with our customers. Behr was once again rated number 1 in interior paint, number 1 in exterior paint, and number 1 in exterior stain in a third-party study, demonstrating the exceptional quality and strength of our leading Behr brand.
Speaker #3: leading recently higher demonstrate awards for multiple corporate from 2025 , and strategy German , having 2025 Award projects . Wellness . received sauna service , integration .
Speaker #3: Our ongoing market share has doubled, driven by increased production at premium. We also introduced our Watkins Cold Plunge products, further expanding our presence in the market. Our sustainability in the decorative architectural solutions segment continues to be driven by our consumer channel.
Speaker #3: and to wellness . again rated was once continue to interior paint , growth and brands Bear exterior study exterior Home with our stain , number one in strength of initiatives of customers our The brand leading partnership with the strategic to our .
John Nudi: Our continued strategic alignment and partnership with The Home Depot led to our recognition as Supplier of the Year for the paint department in the United States and Canada, and Interconnected Partner of the Year in Mexico. Our annual pro sales are approximately $950 million, and our share of the pro paint market has grown over 200 basis points since 2019. We've continued building capabilities to enhance the buying experience for our pro customers, including expanded delivery options, loyalty programs, and a growing sales force, which allow us to further capitalize on the sizable growth opportunity in the pro paint market. I want to thank all of our employees for their resilience, commitment, and leadership, which made these accomplishments possible. Now, on to our results. Please turn to slide 6.
Speaker #3: supplier of the year for the Paint continued Our interconnected Partner Year in and the Our of the are United Department resonate approximately . propane And Demonstrating the we've market has paint over points dealer and the $950 million , and our turn the 2019 , This buying .
Speaker #3: for our 200 basis since expanded delivery States and recognition as pro sales force , which allow us to further options capitalize on the continues sizable and growth with sales propane our opportunity capabilities to achieve employees for Canada .
Speaker #3: programs , and a accomplishments possible building The Ondo our
John Nudi: Beginning with our Q4 results, overall were largely in line with our expectations as we continue to navigate a dynamic geopolitical and macroeconomic environment. Net sales decreased 2% or 3% in local currency, primarily due to lower volumes. Operating profit was $259 million, and operating profit margin was 14.4%. Earnings per share for the quarter was $0.82 per share. Turning to our segments, plumbing product sales increased 3% in local currency. North American sales increased 4%, driven by favorable pricing. Delta Faucet again delivered strong performance, particularly in the trade and e-commerce channels. International plumbing sales increased 1% in local currency, driven by Germany, partially offset by the weaker market in China. Operating profit for the segment was $240 million.
Speaker #3: results . Please market . turn to , loyalty slide six , our fourth quarter their made these largely in line with our to continue to a expectations as we leadership , .
Speaker #3: results . Please market . turn to , loyalty slide six , our fourth quarter their made these largely in line with our to continue to a expectations as we leadership , . geopolitical and dynamic experience Net sales commitment and Our bear .
Speaker #3: navigate currency , overall were lower volumes . was $259 million and operating was profit margin 2% or 3% in local Earnings per macroeconomic and number one in share .
Speaker #3: Turning to our Plumbing segment. Forward-looking, primarily, we saw a 3% increase in local currency. North American product sales increased in the quarter. Delta Faucet was strong, driven by e-commerce. Operating profit delivered 4%, plumbing pricing increased, and profit increased 1%.
Speaker #3: the segments . Plumbing forward looking primarily Turning to our 3% . Local currency . increased North quarter American sales product sales . Delta faucet strong driven by e-commerce Operating delivered 4% , plumbing pricing and .
Speaker #3: particularly Local was favorable in the currency , driven by tray offset by the in Germany , weaker decreased was $204 million . market Operating was performance , again higher tariff sales 16.3% and included the margin costs .
John Nudi: Operating margin was 16.3% and included the impact of higher tariff and commodity costs. Now turning to our decorative architectural segment, sales decreased 15% in the quarter. Overall, paint sales decreased double digits due to lower volume, including the impact on the favorable inventory timing in Q4 of 2024, and the impact related to the customer transition of our primer and applicator business in Q4 of 2025. Excluding these impacts, overall paint sales decreased mid-single digits. DIY paint sales decreased high single digits, and pro paint sales grew low single digits. Operating profit for the segment was $76 million, and operating margin was 13.9%. Please turn to slide 7 as we review our full year performance. Despite a dynamic geopolitical and macroeconomic environment for most of the year, we delivered solid profitability and remained disciplined on capital allocation.
Speaker #3: decorative segment , sales . Overall paint commodity double digits decreased China lower architectural volume impact of the inventory decreased favorable timing in Q4 of related to the customer of our primer and transition business in Q4 2025 .
Speaker #3: decorative segment , sales . Overall paint commodity double digits decreased China lower architectural volume impact of the inventory decreased favorable timing in Q4 of related to the customer of our primer and transition business in Q4 2024 and mid-single .
Speaker #3: Decorative segment sales: overall paint commodity decreased by double digits. In China, lower architectural volume impacted inventory, which decreased. There was favorable timing in Q4 related to the customer of our primer and transition business. In Q4 2024 and mid-single, including the sales, paint decreased by high double digits. Propane sales grew at low digits.
Speaker #3: Reviewing our environment for most of the year, solid demand remained. We capitalized. Net sales decreased, excluding the impacts of currency and the divestiture of Kitzler.
John Nudi: Net sales decreased 3% or 2%, excluding the impacts of currency and the divestiture of Kichler. Operating profit was $1.3 billion, and operating profit margin was 16.8%. Earnings per share for the year was $3.96 per share. We delivered a return on invested capital of 41%. Our strong cash flow allowed us to return $832 million to shareholders through dividends and share repurchases. Near the end of 2025, we began taking decisive actions to further position our business for long-term value creation. We established an executive committee with dual corporate and business unit representation to fully leverage our enterprise strengths, which will enable us to continue to deliver strong execution and accelerate growth moving forward.
Speaker #3: Operating profit was $1.3 billion and operating profit margin disciplined on was and 3% or 2% , for the was of share Earnings per share .
Speaker #3: We delivered a return on invested capital of 16.8%. Despite strong cash flow, our return was 41%. We returned $832 million to shareholders through dividends and share repurchases.
Speaker #3: 2025 , shareholders began taking macroeconomic decisive to position actions term our business value We established an committee with executive dual corporate and business unit representation to fully leverage our enterprise strengths , enable us to deliver strong which will growth .
John Nudi: We also began implementing various restructuring actions to a greater extent than in the past, to further streamline our business, reduce headcount, and optimize operations. We incurred approximately $18 million in charges related to these actions in Q4 of 2025, and we expect to incur approximately $50 million in additional charges in 2026. We anticipate the savings generated from these actions will fund additional growth initiatives to contribute to future margin expansion. As we move into 2026, we're announcing the integration of Liberty Hardware and the Delta Faucet Company. With over half of Liberty sales brand at Delta and a complementary product portfolio, this realignment enhances our consumer-driven strategy to leverage our brands, capabilities, and scale across our organization.
Speaker #3: Moving forward, accelerate began implementing various restructuring actions to a greater extent than in Q4. To further streamline our business, reduce headcount, and optimize, we incurred approximately $18 million in costs related to these actions.
Speaker #3: fourth In the quarter charges related operations , of 2025 , and we incur approximately $50 million in additional execution and in 2026 . we continue to We the savings these actions will fund additional growth contribute initiatives and to past .
Speaker #3: expansion as we move into 2026 , we're announcing the integration of and the Delta Faucet We also With over half future margin sales Delta and of Liberty branded complementary Liberty portfolio .
John Nudi: As a result of this integration, Liberty Hardware, which was previously reported in the Decorative Architectural Products segment, will be reported within our Plumbing Products segment moving forward. Turning to our expectations for 2026, we believe sales across the global repair and remodel markets will be roughly flat. This includes an expectation that both our North American and international markets, in aggregate, will also be roughly flat. Our expectation for our own sales in 2026 is to be flat to up low single digits. This estimate includes our expectation that we will continue to outperform the market in 2026. We expect margin expansion in 2026, driven by continued mitigation of higher tariff and commodity costs, cost savings resulting from our restructuring actions, and ongoing operational efficiencies across our business.
Speaker #3: This realignment enhances our driven strategy to brands capabilities and scale organization . As of this integration , Liberty a result which was previously architectural across our be reported product segment consumer within our would .
Speaker #3: Turning to our segment, Allocation Hardware, we leverage our expectations for sales in the global repair and remodel segment, which will be roughly flat.
Speaker #3: This includes an expectation that both our North international markets will be roughly flat. Also, the expectation for sales in Decorative in American for 2026 is to be up flat to low single digits.
Speaker #3: This includes an expectation that both our North international markets markets , in will roughly flat also be expectation sales decorative in American for our 2026 is to be .
Speaker #3: This estimate includes our expectation that we will continue to outperform the recorded plumbing market in 2026. Margin expansion will continue on higher costs, resulting from restructuring actions and commodity mitigation across our own.
John Nudi: We expect plumbing margins, inclusive of the Liberty Hardware business integration, to be approximately 18% and decorative margins to be approximately 19%, resulting in a Masco operating margin of approximately 17%. Turning to capital allocation, our strategy remains consistent. First, we invest in our business to accelerate growth and market share gains. Second, we maintain a strong investment-grade balance sheet. Third, target a 30% dividend payout ratio. And fourth, deploy our remaining available free cash flow, which we expect to be approximately $600 million in 2026, towards share repurchases or value-accretive acquisitions. I am pleased to share that our board approved a 3% increase to our dividend for 2026, raising our annual dividend to $1.28 per share and marking our 13th consecutive annual dividend increase.
Speaker #3: We plumbing business, inclusive of the Liberty Hardware business integration, to be. Our costs are approximately 18%, and efficiencies, margins decorative, are approximately 19%.
Speaker #3: Resulting 2026 , to be margin of ongoing Masco Turning capital to allocation . Our strategy tariff . First , we consistent our business to accelerate growth approximately 17% .
Speaker #3: maintain invest in share sheet . and market grade a strong investment . a operating Second , payout ratio target cash deploy Third , available free to be flow , which we $600 million in 2026 for share or accretive approximately share that our board pleased to 3% increase to our dividend for 2026 , .
John Nudi: Additionally, our board authorized a new $2 billion share repurchase program, underscoring Masco's resilient business model and strong financial position, and the board's confidence in our future performance. Our M&A strategy remains consistent. We continue to selectively pursue opportunities with strong strategic fit and attractive returns, focusing on bolt-on acquisitions with our plumbing, wellness, and coatings businesses. Based on our expected operating performance and capital deployment strategy, we anticipate earnings per share for 2026 to be in the range of $4.10 to $4.30 per share. While the housing market remains pressured in the near term, we are confident that the fundamental support related to long-term home improvement demand are quite strong. US homeowner equity levels are at a record high, up more than 80% since 2019, providing greater capacity for home renovation projects.
Speaker #3: annual . value am to $1.28 per repurchases share and marking our And fourth , annual dividend increase Additionally , our . authorized a new $2 billion share repurchase program 30th consecutive , underscoring I Masco's board resilient business strong position .
Speaker #3: dividend And the board's financial confidence future in our . Our M&A performance strategy consistent . We continue to actively acquisitions strategic fit model and and attractive returns , focusing pursue acquisitions with our plumbing for strong , wellness and coatings based expected performance capital businesses deployment operating remains we earnings anticipate per share strategy , on bolt on for range be in the of 2026 to $4.10 to $4.30 per share the housing market remains on our pressured in the near term , we are confident that the supporting mid home , while are quite .
Speaker #3: US improvement homeowner levels are at a equity high 80% fundamentals record providing since 2019 , greater capacity for home renovation and . continue to Homes projects age , with more than now 55% of US homes 40 years old over and typically requires an to long elevated repair and strong spending .
John Nudi: Homes continue to age, with more than 55% of these homes now over 40 years old, an age that typically requires an elevated repair and remodel spending. Additionally, a large cohort of homes built in the early 2000s is now entering the prime remodeling age of 20 to 40 years. Significant pent-up demand for larger renovation projects continues to build. As consumer sentiment improves, interest rates decline, and existing home turnover increases, we expect this pent-up demand to become a tailwind for our business. With these strong fundamentals and the actions we are taking to optimize the business, we believe we are well positioned to deliver above-market top and bottom-line growth. We plan to achieve this through our consumer-driven strategy that leverages our industry-leading brands, expanded commercial capabilities, and enhanced operational excellence.
Speaker #3: Additionally , a large homes built in the demand age that now early entering the Prime age of 20 to 40 years . pent up demand renovation projects to continues as consumer build cohort of sentiment improves Significant , interest rates decline , and existing home turnover increases .
Speaker #3: We demand expect this tailwind a for our business strong fundamentals and the actions remodeling to become taking to pent up optimize we believe we are well positioned to we are above , top and bottom line with these the growth .
Speaker #3: We plan to achieve this through our consumer strategy that leverages our industry leading business , , expanded commercial and capabilities enhanced operational excellence 2000 is brands strategy and our this forward to goals long term in detail at our upcoming Day on Wednesday , driven Investor May 13th , in Please save the date and we look forward to seeing you there greater .
John Nudi: We look forward to discussing this strategy and our long-term goals in greater detail at our upcoming Investor Day on Wednesday, May 13, in New York City. Please save the date, and we look forward to seeing you there. Now I'll turn the call over to Rick to go over our fourth quarter and full-year results, and 2026 outlook in more detail. Rick?
Speaker #3: Now, I'll turn it over to Rick to go over New York and full year results in 2026 in detail. We look.
Rick Westenberg: Thank you, John, and good morning, everyone. Thank you for joining. As Robin mentioned, my comments today will focus on adjusted performance, excluding the impact of rationalization charges and other one-time items. Turning to slide 9, sales in Q4 decreased 2%, or 3%, excluding the favorable impact of currency. In local currency, North American sales decreased 5% and international sales increased 1%. Gross margin was 33.7% in the quarter. SG&A in the quarter was 19.3%, and in dollars, was in line with the prior year. Operating profit was $259 million in the quarter, and our margin was 14.4%. Operating profit was impacted by lower volume and higher tariff and commodity costs, partially offset by pricing actions and cost savings initiatives. Our EPS was $0.82 per share in the quarter.
Speaker #3: Rick .
Speaker #2: Thank you , our fourth quarter
Speaker #2: everyone . John , and Robin comments joining today will Outlook in more adjusted performance , excluding
Speaker #2: of other one time items slide nine . Sales in the fourth charges and quarter decreased Turning to focus on impact currency favorable in local American sales . market decreased 5% and international 2% or 3% , Gross .
Speaker #2: of other one time items slide nine . Sales in the fourth charges and quarter decreased Turning to focus on impact currency favorable in local American sales .
Speaker #2: North year quarter 2025 , sales 3% over the decreased . prior year , in the 2% excluding dollars was impact of our the currency favorable divestiture and Kichler .
Speaker #2: increased 1% . currency , Thank you for 33.7% in the was quarter . SG&A in the quarter was 19.3% , and in with the prior year .
Speaker #2: Operating profit was quarter , $259 million in the and our margin was 14.4% . profit was Operating impacted by lower volume and higher commodity costs , partially offset by pricing actions cost savings initiatives in line and EPs was $0.82 per share tariff and the full .
Rick Westenberg: Turning to the full year of 2025, sales decreased 3% over the prior year, or 2%, excluding the impact of our divestiture and favorable currency. Our divestiture of Kichler in Q3 of 2024 resulted in a decrease in sales of 2% year-over-year for the full year of 2025, while currency represented a 1% increase in sales. In local currency, North American sales decreased 5%, or 2%, excluding our divestiture, and international sales increased 1%. Gross margin was 35.5% and was impacted by higher tariff and commodity costs. SG&A, as a percent of sales, was in line with the prior year at 18.7%. Operating profit was approximately $1.3 billion, and operating margin was 16.8%.
Speaker #2: third quarter of 2024 resulted in a in sales of 2% year over decrease year . For the full year 2025 , Our or 1% increase while in currency , local North in American currency decreased 5% , represented or 2% .
Speaker #2: Excluding divestiture international sales Gross increased 1% . sales 35.5% and was our by higher tariff impacted commodity and as a . SG&A sales was in line with the and year at Operating profit percent of was $1.3 billion and approximately operating 18.7% .
Speaker #2: Costs prior year were up 16.8%. Lastly, full-year EPS was $3.96 per share. Turning to slide ten: plumbing sales increased 5% in the fourth quarter, or 3% excluding the favorable currency impact.
Rick Westenberg: Lastly, our EPS for the full year was $3.96 per share. Turning to slide 10. Plumbing sales increased 5% in the fourth quarter, or 3%, excluding the favorable impact of currency. This growth was largely driven by pricing, which increased sales by 5%, partially offset by lower volume. In local currency, North American plumbing sales increased 4% in the quarter.... This performance was primarily driven by solid growth in our Delta Faucet and Watkins Wellness businesses. In local currency, international plumbing sales increased 1% in the quarter. Hansgrohe grew in many of its European markets, including its key market of Germany. This growth was partially offset by the ongoing challenging market dynamics in China. Segment operating profit in the fourth quarter increased 2% to $204 million, and operating margin was 16.3%.
Speaker #2: This growth was EPs for pricing , increased sales which by 5% , partially lower offset by in local currency . North American plumbing volume 4% in the driven by performance was in the primarily driven by .
Speaker #2: growth Delta in our faucet and Watkins wellness sales businesses . In increased currency . International local This 1% in the increased . Hansgrohe grew in many of its European markets , including its key of market Germany .
Speaker #2: growth was partially offset by the ongoing challenging market dynamics China impact of . Segment operating profit in the fourth quarter This increased in 2% $204 million , and operating to margin was 16.3% .
Rick Westenberg: Operating profit was driven by cost savings initiatives and pricing actions, partially offset by higher tariff and commodity costs and lower volume. Turning to the full year of 2025, plumbing sales increased 3%, or 2%, excluding the favorable impact of currency. Favorable pricing contributed 3%, partially offset by lower volume, which decreased sales by 1%. In local currency, North American plumbing sales increased 3%, and international plumbing sales increased 1%. Full year operating profit was $904 million, and operating margin was 18.1%. Turning to Slide 11, decorative architectural sales decreased 15% in Q4. In the quarter, total paint sales decreased double digits due to lower volume.
Speaker #2: Operating savings by cost driven initiatives and pricing profit was actions , partially tariff and by higher commodity volume lower . Turning to the full year offset sales costs and or 2% , excluding the favorable increased 3% , currency impact of , favorable partially lower 2025 volume , which offset by sales pricing decreased North plumbing sales in international plumbing local increased 3% , and sales currency .
Speaker #2: Operating profit was $904 million, and operating margin was 18.1%. Turning to slide 11. Architectural decreased 15% in the fourth quarter, and 1%.
Rick Westenberg: Volume was impacted by the favorable inventory timing in Q4 of 2024, as well as the impact related to the customer transition of our primer and applicator business in Q4 of 2025. Excluding these impacts, overall paint sales decreased mid-single digits, with pro paint sales growing low single digits and DIY paint sales decreasing high single digits, in line with our full year performance. Operating profit in the fourth quarter was $76 million, primarily impacted by lower volume and significantly higher tariff and glass antidumping duty costs at our Liberty Hardware business, partially offset by cost savings initiatives. We continue to take proactive actions to mitigate the impact of tariff and duties, and have announced the integration of the Liberty business into Delta Faucet Company.
Speaker #2: In the total paint due to lower decreased double digits . Volume was impacted by the sales Q4 of inventory As well timing in as the sales 2024 .
Speaker #2: Customer impact of our primer and applicator volume Q4 transition, excluding these, overall paint sales business mid-single digits decreased in 2025. Sales were low single digits in DIY paint, growing, propane decreasing high single digits. Our full year performance in the fourth quarter was $76 million.
Speaker #2: Primarily impacted by volume . glass antidumping tariff and duty lower At our and significantly Operating Hardware business , partially higher offset by cost savings initiatives favorable .
Speaker #2: We to take proactive mitigate the impact and duties , line announced the and have integration of the profit Liberty Liberty business into Delta , Phosphate to of .
Speaker #2: We to take proactive mitigate the impact and duties , line announced the and have integration of the profit Liberty Liberty business into Delta , Phosphate to of costs .
Rick Westenberg: We believe this integration will provide a significant opportunity to further optimize the operation and improve the profitability of Liberty, as we leverage the capabilities and scale of the combined business. Operating profit margin was 13.9% in the segment. Turning to the full year of 2025, sales decreased 14%, driven by our Kitchen divestiture and lower volume, which decreased sales by 6% and 8%, respectively. Excluding the impact of the prior year inventory timing benefit, pro paint sales were up low single digits, and DIY paint sales were down high single digits for the year. Full year operating profit was $457 million, and operating margin was 17.8%. Turning to Slide 12, our balance sheet remains strong, with gross debt to EBITDA at 2.1x at year-end.
Speaker #2: will significant provide a opportunity to further optimize the operations tariffs improve the of Liberty profitability leverage the capabilities and scale of and the combined .
Speaker #2: Operating profit in the business segment decreased to 13.9% in the year, as we turn to the full year. This was driven by lower volume and lower sales, which decreased 6% and 8%, respectively.
Speaker #2: Excluding the impact of the prior year , inventory timing benefit by . Propane were digits DIY paint and sales low single were down high single digits operating .
Speaker #2: up was $457 million , year Full year was 17.8% . margin slide 12 . Our operating Turning to with balance sheet at 2.1 times at year divestiture and end with year .
Rick Westenberg: We ended the year with $1.6 billion of liquidity, including cash and availability under our revolving credit facility. Working capital was 16.7% of sales at quarter end. Working capital was impacted by tariff-related dynamics, including higher material costs and pricing, which resulted in increased working capital balances in 2025. We anticipate working capital as a percent of sales will be approximately 16.5% in 2026. Our free cash flow for the year was over $850 million, a bit stronger than anticipated, driven by disciplined cost and working capital management, achieving free cash flow conversion of nearly 100%.
Speaker #2: We ended cash liquidity , gross and under our revolving credit facility , working was 16.7% of sales capital at quarter remains end . Working capital was tariff debt to impacted by related dynamics , including higher material costs pricing , which resulted and increased EBITDA the capital balances we availability , percent .
Speaker #2: 16.5% Our approximately in 2026 . free cash the over stronger flow for anticipated , driven by actions year was cost and In 2025 , disciplined capital free cash 1.6 billion of 100% .
Rick Westenberg: Given our strong cash performance, we were able to return $832 million to shareholders through dividends and share repurchases, including the repurchase of $217 million in stock in Q4, and the repurchase of $571 million for the full year. Now let's turn to Slide 13 and review our outlook for 2026. The guidance that is being provided today reflects the integration of Liberty Hardware into Delta Faucet Company. Therefore, Liberty's results will now be included in the plumbing product segment, versus previously being included in the decorative architectural segment. For comparison purposes, we have recast our segments in 2025 by quarter to reflect this change. This information can be found in the appendix of our earnings deck on our website.
Speaker #2: nearly Given our flow conversion of return . dividends management , including the repurchase and share of $217 million performance , we Achieving $571 million for the full Now , let's turn to slide .
Speaker #2: our fourth quarter outlook for 2026 . The and guidance that is today Liberty repurchases delta integration of Phosphate hardware . Therefore , Liberty's results be included in the product into plumbing versus previously segment being being architectural included in year .
Speaker #2: . comparison For purposes , we have recast our provided segment will now quarter segments reflect in This change . can be found in the 2025 by appendix deck this of our on our website .
Rick Westenberg: Our guidance also includes the impact of currently enacted tariffs in effect in February, inclusive of the 10% reduction in China tariffs that went into effect after our Q3 earnings call. As a result of this tariff reduction, as well as proactive and ongoing changes to our sourcing footprint, we now estimate that the total annualized cost impact from tariffs to be approximately $200 million before mitigation, down from an annualized $270 million as of our Q3 earnings call. Of the $200 million annualized cost impact, approximately $80 million is related to the current 20% China tariffs, and the remaining approximately $120 million is driven by a combination of the various tariffs on countries other than China, the 50% tariffs on steel, aluminum, and copper, and the glass antidumping duties.
Speaker #2: Our includes the guidance also impact of decorative enacted Earnings tariffs in effect in stock in the February , inclusive of the reflects the 10% reduction in China into effect tariffs after our third quarter earnings .
Speaker #2: As a result of this AS reduction, as well as proactive and ongoing changes to footprint, we are now sourcing that the annualized impact estimate is currently approximately $200 million before company mitigation, down from a total $270 million as of our third quarter earnings call.
Speaker #2: $200 million annualized tariff cost Of the impact , our $80 million is related to the 20% China annualized approximately approximately $120 million is a combination of the various tariffs on countries other than tariffs driven by The from on current China .
Rick Westenberg: We anticipate the full $200 million will impact 2026. This is up from the in-year impact in 2025 of approximately $150 million, largely due to the timing of tariffs as they were implemented throughout 2025. Our teams continue to actively work to further mitigate these costs and recover the cost and margin impact through a combination of levers.... These include cost reductions, continued efforts to change our sourcing footprint, and pricing where necessary. We anticipate that these mitigation actions will offset the direct cost impact of the currently enacted tariffs in 2026. To provide an update on our China exposure, in 2026, we expect to import approximately $400 million from China that is subject to the reciprocal tariffs, down from our 2025 exposure of $450 million.
Speaker #2: steel , aluminum and copper glass , and the we full 50% tariffs $200 million the duties impact 2026 . This is anticipate the in year impact will , and the anti-dumping $150 million , largely in due to the timing tariffs as of implemented throughout 2025 .
Speaker #2: We actively work to further mitigate these costs and impact margin through a number of levers, including sourcing changes to recover costs, up from pricing, and where appropriate, changing our footprint.
Speaker #2: We these , continued reductions will offset the and cost impact of the currently direct enacted tariffs To provide update on our China continue to exposure to mitigation efforts import in 2026 .
Speaker #2: Approximately, it is anticipated that the $400 million from China tariffs exposure is down from what we were based on. We are subject to reciprocal China exposure, which will be less than $300 million in 2026.
Rick Westenberg: Based on our continued efforts, we anticipate that our China exposure will be less than $300 million as we exit 2026. This represents a greater than 60% reduction from our peak exposure in 2018. From a segment perspective, with a shift of Liberty Hardware to the plumbing product segment, nearly all of our tariff exposure and impact reside in this segment. Now turning to our expected financial performance for 2026. For Masco overall, we expect 2026 sales to be flat to up low single digits and operating margin to expand to approximately 17%, up from 16.8% in 2025. Our 2026 sales guide reflects an assumption that the global repair and remodel markets in aggregate will be roughly flat.
Speaker #2: This represents a greater than 60% reduction from our peak exit in 2018 . From a continued 2026 , we shift to Liberty hardware to the segment perspective , plumbing product .
Speaker #2: tariff exposure , nearly all of impact reside in this That . Now , financial for 2026 . Masco For . Overall , we expect performance 2026 sales to be to up low .
Speaker #2: Single digits and operating flat expand margin to efforts , approximately 17% , up with a and exposure the reflects an Our remodel markets in will be roughly As we think about the aggregate , assumption that year , excluding the , we repair and expect .
Rick Westenberg: As we think about the cadence for the year, excluding the impact of currency, we expect sales to be roughly flat to slightly up in both the first and second half of the year. We expect SG&A as a percent of sales to be in line with 2025, as we continue to invest in our business for future growth, while also maintaining cost discipline. Also, as it relates to operating margins, given the timing of tariff impacts, which largely impacted our results in the second half of last year, we anticipate total Masco margin contraction in the first half of the year, with expansion expected in the second half as we lap the tariff impact and as our mitigation actions continue to take hold. In our plumbing segment, we expect 2026 full year sales to be up low single digits.
Speaker #2: Slightly in first, both the second half of the up. We expect currency sales to be in line with, as a percent of, as we continue to invest in our sales to be growth business for future, while cost also a.
Speaker #2: slightly in first both the second half of the up . We currency sales to be in line with as a percent of As we continue to invest in our sales to be growth business for future , while cost also a cadence for expect operating margins , given the timing of which results in the second half of year , tariff anticipate total impacted our to largely first half of the year with expected in the second half .
Speaker #2: last As we and as impact margin actions continue the hold in our plumbing we lap segment , impacts , expect 2026 full year sales to be low single up tariff digits the full plumbing will be anticipate margin year approximately 18% , up from a .
Rick Westenberg: We anticipate the full year plumbing margin will be approximately 18%, up from a comparable 2025 margin of 17.6%. Margin expansion will primarily be driven by pricing discipline, operational efficiencies, and continued cost savings initiatives. In our decorative architectural segment, we expect 2026 sales to be roughly flat with the prior year. We expect our pro paint business will increase mid-single digits, and our DIY paint business will decrease mid-single digits. We anticipate the full year decorative architectural margin to be approximately 19%, relatively in line with a comparable 2025 margin of 18.9%, with a continued focus on cost savings initiatives.
Speaker #2: Comparable 2025 margin for Masco will primarily be driven by pricing discipline, continued operational efficiencies, and cost savings in our architectural and decorative segment. We expect margin expansion of roughly 17.6%. We expect the initiatives to drive 2026 sales to be similar to prior years.
Speaker #2: We Pro Paint increase will digits mid-single , and our business business DIY will decrease mid-single . We anticipate the full architectural expect our approximately 19% , relatively in digits the year comparable 2025 margin paint decorative of 18.9% , with continued focus on a cost savings with capital regards to expect to approximately initiatives reinvest to pay a line with dividend of $1.28 per share , up 3% from our 2025 dividend .
Rick Westenberg: With regards to capital allocation, we expect to reinvest approximately $190 million through capital expenditures to pay a dividend of $1.28 per share, up 3% from our 2025 dividend, and to deploy approximately $600 million towards share repurchases or acquisitions in 2026. Finally, as John mentioned earlier, our 2026 EPS estimate is $4.10 to $4.30 per share. This assumes a 202 million average diluted share count for the year and a 24.5% effective tax rate, which is consistent with our 2025 effective tax rate. Additional financial assumptions for 2026 can be found on slide 16 of our earnings deck. With that, I'd like to open up the call for questions. Operator?
Robin Zondervan: Thank you, operator, and good morning, everyone. Welcome to Masco Corporation's 2025 Q4 and Full Year Conference Call. With me today are John Nuti, President and CEO of Masco, and Rick Westenberg, Masco's Vice President and Chief Financial Officer. Our Q4 earnings release and the presentation slides are available on our website under Investor Relations. Following our remarks, we will open the call for analyst questions. Please limit yourself to one question with one follow-up.
Speaker #2: And to $600 million toward deploy approximately share expenditures in 2026 . Finally , as John mentioned $190 million through capital earlier , our 2026 EPs repurchases or is share .
Robin Zondervan: If we can't take your question now, please call me directly at 313-792-5500. Our statements today will include our views about our future performance, which constitute forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements.
Speaker #2: a 202 million average This share count for the year , $4.10 to $4.30 per and tax rate is acquisitions consistent 2025 effective our with assumes .
Speaker #2: Additional assumptions for diluted 16 of our earnings deck . With that , financial like to open tax for estimate 2026 can be found up the call questions Operator .
Speaker #2: Additional assumptions for diluted 16 of our earnings deck. With that, financial would like to open tax for estimate 2026, which can be found up the call questions on slide 24. 5% effective.
Operator: Thank you. We will now begin the question and answer session. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question and one follow-up question during the Q&A session. To ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star, then the number two. One moment, please, while we assemble the queue. Your first question comes from Matthew Bouley of Barclays. Please go ahead.
Robin Zondervan: We've described these risks and uncertainties in our risk factors and other disclosures in our Form 10-K that we filed with the Securities and Exchange Commission. Our statements will also include non-GAAP financial metrics. Our references to operating profit and earnings per share will be as adjusted, unless otherwise noted. We reconcile these adjusted metrics to GAAP in our earnings release and presentation slides, which are available on our website under Investor Relations. With that, I will now turn the call over to John.
Speaker #4: We will now Thank you . begin the question and
Speaker #4: session in order to ensure that has a chance to everyone we would like to request limit yourself to asking
Speaker #4: question and question during the Q&A session . To ask question , please press star . Then the number keypad . To withdraw your question , please press star .
Speaker #4: One on your telephone. Please go ahead.
Speaker #4: Then the number two . One moment please . While we assemble the queue participate , a , which . first question comes Your a Boulette of that you Barclays .
Matthew Bouley: Good morning, everyone. Thank you for taking the questions. Maybe just one common question we're getting from investors now is around commodity inflation and specifically copper. So maybe just a quick question there around how you're embedding that into your guidance for plumbing margin expansion in 2026, and maybe the sort of timing of that commodity impact. Thank you.
John Nudi: Thank you, Robin. Good morning, everyone, and thank you for joining us. Please turn to slide 5. I want to start today by highlighting some of our key accomplishments from 2025, which we achieved while navigating a dynamic and challenging environment. Following that, I'll turn to our financial results for 2025 and share our expectations for 2026. Starting with our plumbing product segment, we continue to demonstrate our market leadership, even as we work to mitigate the impacts of higher tariff costs.
Speaker #5: Hi . Good taking the questions . just one common question we're investors now is around commodity getting from Maybe specifically copper inflation and .
Speaker #5: So maybe quick a question there around you're how just morning everyone . into plumbing embedding that guidance for margin expansion . Thank you for 2026 and maybe the sort into your of timing of that commodity impact .
Rick Westenberg: Sure, Matt, it's Rick. Good morning. So with regards to commodity inflation, as I'm sure you've been seeing, particularly with copper, we saw that really tick up later part of last year, and really the first part of this year. We're monitoring very closely. It's obviously a volatile dynamic. With regards to inflation, we saw in our plumbing segment, mid-single digit inflation in Q4, so we're seeing some of that pull through, and we're expecting mid-single digit inflation in our guide for plumbing in the calendar 2026. So it's something that we've contemplated. Admittedly, it is volatile, and there's risk and upside, depending on how things play out.
Speaker #5: Thank
Speaker #6: Rick . .
Speaker #6: So with Matt , it's Sure , inflation , as I'm sure you've you seeing , particularly copper , Good we saw up really tick that Part later .
John Nudi: Delta Faucet was awarded the Home Depot Kitchen and Bath Partner of the Year. This award recognized the strength of our brand, customer service, and innovation. Delta also continued to achieve notable market share gains in the e-commerce channel, driven by our industry-leading capabilities that deliver solutions for consumers.
Speaker #6: last year . really the first part of this we're monitoring very closely . It's And dynamic with regards saw inflation . We in to our digit segment inflation in plumbing Q4 .
Speaker #6: volatile something that our contemplated So it's volatile . And is there's there's risk and upside depending on how things play out . As a reminder , with regards to how you think about commodities flowing our through to PNL , it's usually about a lag in terms of when commodity costs market in the you see the before it hits So that's why later in Q4 our in 2026 .
John Nudi: At Hansgrohe, we continue to be a global leader, gaining additional market share through premium products with industry-leading designs. Hansgrohe also continues to demonstrate leadership and commitment to sustainability, having recently received multiple awards for corporate strategy and production initiatives at the German Sustainability Projects 2025 award ceremony. At Watkins Wellness, our integration of Sauna360 into our existing dealer network has generated double-digit sales growth in a market with ongoing opportunities for increased household penetration. We also introduced our cold plunge products, further expanding our presence in the consumer wellness market. In our decorative architectural segment, the strength of our brands continued to resonate with our customers. Behr was once again rated number 1 in interior paint, number 1 in exterior paint, and number 1 in exterior stain in a third-party study, demonstrating the exceptional quality and strength of our leading Behr brand.
Speaker #6: So, morning. That pull, seeing some of. And we're through expecting digit inflation in mid-single guide for in the calendar plumbing year 2026.
Rick Westenberg: As a reminder, with regards to how you think about commodities flowing through to our P&L, it's usually about a six-month lag in terms of when you see the commodity costs in the market before it hits our P&L. So that's why you're seeing it kind of later in Q4 in 2025 and in 2026. So that delay is, and so to the extent that there's movement one way or the other, you can envision that lag would stay true.
Speaker #6: 2025 and in So that delays . to the And so extent that there's movement one way or the other , you can you can envision would that leg would stay .
Matthew Bouley: Okay, perfect. Thank you for that, Rick. Second one, pricing in plumbing. I think I heard you say 5% in the Q4, and correct me if I'm wrong, but I think that would suggest price was probably above that in North America, assuming it was below that level in the international business. And so given that level of price, can you speak a little bit about what you're expecting to kind of flow through in the first half of 2026? Any kind of early reads on your initial January pricing actions in that segment? And if you're expecting that to contribute additional price on top of what you've already got, and kind of how that would flow through the first half and second half. Thank you.
Speaker #6: true
Speaker #5: Okay . you for that , PNL . Thank Rick . Second one , pricing in plumbing I think I heard you say in the fourth quarter .
Speaker #5: And if I'm wrong ,
Speaker #5: suggest 5% was probably above that in North America . below that level and in
John Nudi: Our continued strategic alignment and partnership with The Home Depot led to our recognition as Supplier of the Year for the paint department in the United States and Canada, and Interconnected Partner of the Year in Mexico. Our annual pro sales are approximately $950 million, and our share of the pro paint market has grown over 200 basis points since 2019. We've continued building capabilities to enhance the buying experience for our pro customers, including expanded delivery options, loyalty programs, and a growing sales force, which allow us to further capitalize on the sizable growth opportunity in the pro paint market. I want to thank all of our employees for their resilience, commitment, and leadership, which made these accomplishments possible. Now, on to our results. Please turn to slide 6.
Speaker #5: the international Assuming it was you're seeing business would . And so correct me given that level price , can you speak a little bit it kind of about what you're kind of through in the first half of flow any kind of reads on your expecting in the initial January pricing actions in that segment ?
Speaker #5: if you're And expecting contribute on early top of what already got 2026 , and kind of flow through the first half and second how that would that to you half ,
John Nudi: Yeah, hi, Matt. It's John. Maybe I'll start and then turn it over to Rick to get into the flow for 2026. You know, I would say, really pleased with the way that our plumbing team has handled, you know, a lot of challenges in 2025. Obviously, between tariffs and commodities, they were faced with a lot and really took action and really used to say, some sophisticated tools to take precise pricing, and really across all of our channels. And the good news is we continue to grow share through that time period. As we've taken smart pricing, we believe we're well positioned in the market. And again, I'll let Rick talk a little bit about the flow and how that will happen.
Speaker #5: .
Speaker #7: Matt . It's Yeah . Hi , John .
Speaker #7: into Rick to get the flow for 2026 . I really
Speaker #7: into Rick to get the
Speaker #7: pleased with the challenges 2025 , in you know , between tariffs and thank start and commodities . They were faced with a and lot action .
John Nudi: Beginning with our Q4 results, overall were largely in line with our expectations as we continue to navigate a dynamic geopolitical and macroeconomic environment. Net sales decreased 2% or 3% in local currency, primarily due to lower volumes. Operating profit was $259 million, and operating profit margin was 14.4%. Earnings per share for the quarter was $0.82 per share. Turning to our segments, plumbing product sales increased 3% in local currency. North American sales increased 4%, driven by favorable pricing. Delta Faucet again delivered strong performance, particularly in the trade and e-commerce channels. International plumbing sales increased 1% in local currency, driven by Germany, partially offset by the weaker market in China. Operating profit for the segment was $240 million.
Speaker #7: And really some really used additional tools to pricing really across all sophisticated of our over to channels . And and news is we continue to grow , share through period as we've smart we that time taken believe we're well market would say in the .
Speaker #7: And really some really used additional tools to pricing really across all sophisticated of our over to channels . And and news is we continue to grow , share through period as we've smart we that time taken believe we're well market price little bit about the positioned pricing , how that will flow and really pleased again , with the way that we're navigating this
Speaker #7: And really some really used additional tools to pricing really across all sophisticated of our over to channels . And and news is we continue to grow , share through period as we've smart we that time taken believe we're well market price little bit about the positioned pricing , how that will flow and really pleased again , with the way that we're navigating this happen . with
Speaker #7: And really some really used additional tools to pricing really across all sophisticated of our over to channels . And and news is we continue to grow , share through period as we've smart we that time taken believe we're well market price little bit about the positioned pricing , how that will flow and really pleased again , with the way that we're navigating this happen .
John Nudi: But again, really pleased with the way that we're navigating, this environment.
Rick Westenberg: Yeah, Matt, with regards to your specific question, you heard correctly that pricing and plumbing was a 5% benefit in Q4. It's fair to assume that international wasn't as significant. I'll leave it at that. As it pertains to 2026, we've indicated that we would expect mid-single digit pricing for plumbing in the calendar year. From a case perspective, we won't get into the details, but suffice it to say that we started to implement mitigation actions, as John alluded to, really, as tariffs started to take hold across cost, sourcing, and pricing, really mid-year last year. So you can imagine, as we lap that activity in 2026, you'll see some moderation with regards to year-over-year comparison. But for the full year, you can expect a mid-single digit pricing benefit.
Speaker #6: your specific regards to question , you heard environment correctly that Matt , plumbing was a 5% benefit pricing and
Speaker #6: in to assume . significant . It's fair that that pertains wasn't as to 2026 . . Q4 indicated
Speaker #6: digit pricing mid-single as it plumbing in the it at would year from a cadence calendar perspective , international details , we won't get but suffice say that we for But implement mitigation As John alluded , really , as to started to We've it to hold take started to across actions .
John Nudi: Operating margin was 16.3% and included the impact of higher tariff and commodity costs. Now turning to our decorative architectural segment, sales decreased 15% in the quarter. Overall, paint sales decreased double digits due to lower volume, including the impact on the favorable inventory timing in Q4 of 2024, and the impact related to the customer transition of our primer and applicator business in Q4 of 2025. Excluding these impacts, overall paint sales decreased mid-single digits. DIY paint sales decreased high single digits, and pro paint sales grew low single digits. Operating profit for the segment was $76 million, and operating margin was 13.9%. Please turn to slide 7 as we review our full year performance. Despite a dynamic geopolitical and macroeconomic environment for most of the year, we delivered solid profitability and remained disciplined on capital allocation.
Speaker #6: sourcing and pricing really cost last mid-year imagine lap that , that year . activity in 2026 , you'll see with regards moderation some year comparison .
Matthew Bouley: Okay. Thank you both. Good luck, guys.
Rick Westenberg: Thanks, Matt.
Speaker #6: expect a digit as we benefit mid-single .
John Nudi: Thank you.
Operator: Your next question comes from Anthony Pettinari of Citi. Please go ahead.
Speaker #5: Okay .
Speaker #5: you both, to year-over
Speaker #5: you both .
Speaker #5: guys . you
Speaker #6: Thanks, Matt. You can
Anthony Pettinari: Good morning. Just pivoting from plumbing to DA, I'm wondering if you could, you know, talk about assumptions for price cost in 2026, any commodity cost trends that you'd call out, and any pricing actions that you can talk about?
Speaker #8: .
Speaker #4: Your
Speaker #4: comes from next Anthony
Speaker #4: go
Speaker #9: Good morning
Speaker #9: Da . I'm wondering if you could , talk pricing about Cost in 2026 . Any Good luck commodity cost trends But for the that you'd out in any you actions that can talk price .
John Nudi: Yeah, absolutely. This is John. As we look at, as we look at that, we are seeing some upward pressure on cost. As you likely know, we have a unique relationship with our large exclusive big box retailer and have a price cost mechanism in place. So we're not gonna comment on prospective pricing or even our conversations with our retail partner, but given the costs that we're seeing, you know, those conversations are beginning. We'll come back at future quarters and let you know where we shake out in that, that, that space.
Speaker #9: ?
Speaker #7: is John .
Speaker #7: is John . we look As at Absolutely . This DAP , we are seeing as we upward look at Thank pressure Thank cost
Speaker #7: As you know, we have a likely unique relationship, as our large exclusive retailer has a price and cost mechanism in. So we're assuming for now that we're not going to place.
John Nudi: Net sales decreased 3% or 2%, excluding the impacts of currency and the divestiture of Kichler. Operating profit was $1.3 billion, and operating profit margin was 16.8%. Earnings per share for the year was $3.96 per share. We delivered a return on invested capital of 41%. Our strong cash flow allowed us to return $832 million to shareholders through dividends and share repurchases. Near the end of 2025, we began taking decisive actions to further position our business for long-term value creation. We established an executive committee with dual corporate and business unit representation to fully leverage our enterprise strengths, which will enable us to continue to deliver strong execution and accelerate growth moving forward.
Speaker #7: prospective on even our retail partner . But pricing that we're seeing , given you know , the cost some conversations are this We'll come back at future Quarters and let you know where we shake out .
Anthony Pettinari: Okay. Okay. And then in terms of DIY, I think you guided down mid-single digits. You know, are there any kind of big picture thoughts you can share in terms of, you know, the volume pressure in that business? And, you know, how much of it might just be a sort of a secular shift from DIY to pro, so maybe, you know, demand is not being destroyed; it's just being kind of shifted between the channels. Just kind of as you look back at the last, you know, three, four years, can you give us some context and how that informs your expectations for 2026?
Speaker #7: that And .
Speaker #9: Okay ,
Speaker #9: terms And of DIY , you
Speaker #9: I think , you know , are there any kind of big you can share picture thoughts of terms
Speaker #9: pressure in in business and down and how might much of it a secular the DIY to shift pro . So maybe , you from is not that being just be being kind destroyed .
Speaker #9: shifted between space the just know , demand as you channels kind of , last , you know , 3 or 4 years , It's just us some at the how that of informs 26 ?
Speaker #9: shifted between space the just know , demand as you channels kind of , last , you know , 3 or 4 years , It's just us some at the how that of informs .
Speaker #9: You know, just at how some of that demand has shifted between channels, kind of space, the last, you know, 3 or 4 years. Can you give us some sense of how that...
Speaker #9: shifted between space the just know , demand as you channels kind of , last , you know , 3 or 4 years , It's just us some at the how that of informs .
John Nudi: We also began implementing various restructuring actions to a greater extent than in the past, to further streamline our business, reduce headcount, and optimize operations. We incurred approximately $18 million in charges related to these actions in Q4 of 2025, and we expect to incur approximately $50 million in additional charges in 2026. We anticipate the savings generated from these actions will fund additional growth initiatives to contribute to future margin expansion. As we move into 2026, we're announcing the integration of Liberty Hardware and the Delta Faucet Company. With over half of Liberty sales brand at Delta and a complementary product portfolio, this realignment enhances our consumer-driven strategy to leverage our brands, capabilities, and scale across our organization.
John Nudi: Yeah, absolutely. So this is John. It's certainly been dynamic for sure. We do know that existing home sales correlate highly with DIY paint, and it makes sense. When you go to sell a home, you tend to paint it, and when you buy it, you tend to paint it again to put your own mark and style into the home. So as existing home sales were at three- or four-decade near lows, and then in 2025, it was challenging, and we saw that obviously in the previous years as well. As we look forward, we know that we have a strong DIY brand, one of the share leaders.
Speaker #7: Yeah ,
Speaker #7: Certainly, John. Absolutely. This has been a dynamic that we sure exist in—your sales correlate, you know. That's to go home for you, tend to paint it.
Speaker #7: you buy it , you tend to paint it again to when you highly sell a own makes sense home DIY style into home .
Speaker #7: So as existing And it sales were at 3 or 4 decade year the , then 2025 , it mark was and home
Speaker #7: So as existing And it sales were at 3 or 4 decade year the , then 2025 , it mark was and home challenging and we lows the years as obviously in previous well as we look forward , we know that we have a strong .
John Nudi: We have amazing quality at great value, and we think we can actually tell our story better just to make sure that, you know, we, we get our, our continued growth share in the DIY market. The space that we're, you know, very excited about is the pro market. When you look at that, that segment, it's the biggest single segment Masco competes in. It's over $10 billion, and it's grown nicely, really over the short, medium, and long term. We have a relatively small share. We have less than a 10 share. Really proud that we gained 200 basis points of share since 2019. But we are squarely focused on growing that at a differential rate. The good news is, The Home Depot, our retail partner, is very, very squarely focused on the pro as well.
Speaker #7: One of the cheerleaders , amazing at great brand quality value , and we think we I can our story better paint . DIY we sure that get saw that our continue to grow .
Speaker #7: actually tell Masco competes that in . Over The Really market . the short , medium and long over relatively small have a nicely . than a ten share .
Speaker #7: actually tell Masco competes that in . Over The Really market . the short , medium and long over relatively small have a nicely .
John Nudi: As a result of this integration, Liberty Hardware, which was previously reported in the Decorative Architectural Products segment, will be reported within our Plumbing Products segment moving forward. Turning to our expectations for 2026, we believe sales across the global repair and remodel markets will be roughly flat. This includes an expectation that both our North American and international markets, in aggregate, will also be roughly flat. Our expectation for our own sales in 2026 is to be flat to up low single digits. This estimate includes our expectation that we will continue to outperform the market in 2026. We expect margin expansion in 2026, driven by continued mitigation of higher tariff and commodity costs, cost savings resulting from our restructuring actions, and ongoing operational efficiencies across our business.
Speaker #7: Share in the DIY very that we're about is space excited a pro market . When you make look at segment , biggest single segment .
Speaker #7: it's the And we less term . 200 basis points of share But on squarely share . since 2019 . growing that the good news is gained Depot very , very We have , our rate . So well .
Speaker #7: it's the And we less term . 200 basis points of share But on squarely share . since 2019 . growing that the good news is gained Depot very , very We have , our rate .
John Nudi: So we're working to take friction out of the experience for the pro. Things like order online and pickup in store, which is available now. Order online and have it delivered to the job site, which we can do now. The Home Depot is trialing some trade credit, which we think will make a real difference. And then we've continued to increase the number of both outside and inside sales reps we have focused on the pro. So regardless of where the market goes, we like our ability to play both in DIY, where we're very strong today, and then we think there's a tremendous amount of upside in pro, and we'll continue to invest in that space, and again, very aligned with our retail partner in that initiative.
Speaker #7: working to friction out of the experience for the Pro focused like order and pick up in store , now is differential or online available and have it jobsite , the which we can squarely Depot is some trade credit , will make a The Home real we're then we which we think difference .
John Nudi: We expect plumbing margins, inclusive of the Liberty Hardware business integration, to be approximately 18% and decorative margins to be approximately 19%, resulting in a Masco operating margin of approximately 17%. Turning to capital allocation, our strategy remains consistent. First, we invest in our business to accelerate growth and market share gains. Second, we maintain a strong investment-grade balance sheet. Third, target a 30% dividend payout ratio. And fourth, deploy our remaining available free cash flow, which we expect to be approximately $600 million in 2026, towards share repurchases or value-accretive acquisitions. I am pleased to share that our board approved a 3% increase to our dividend for 2026, raising our annual dividend to $1.28 per share and marking our 13th consecutive annual dividend increase.
Speaker #7: the number And and inside sales reps . We have delivered to trialing And of where the market goes , now . we like our ability to continued do play both DIY , outside in we're very today , and strong then we where amount of , things in Pro continue to invest space .
Anthony Pettinari: Okay, that's helpful. I'll turn it over.
Speaker #7: and we'll
Speaker #7: And again ,
Speaker #7: Very in that of both Pro, regardless partner. That initiative, and with, with.
John Nudi: Thank you.
Operator: Next question comes from Stephen Kim of Evercore ISI. Please go ahead.
Speaker #9: helpful . I'll turn it Okay . That's
Speaker #8: you
Stephen Kim: Yeah, thanks a lot, guys. Appreciate all the color so far. I guess, in your guide for fiscal 2026, can you give us a sense for what your expectations are for existing home sales, and just anything else relevant coming out of the housing market, specifically, in your outlooks?
Speaker #8: .
Speaker #4: Next question Stephen Kim of Evercore ISI . comes from
Speaker #4: Next question Stephen Kim of Evercore ISI . comes from Please .
Speaker #4: go
Speaker #10: Thanks a lot , guys . all the
Speaker #10: color so far . guess I in tremendous
Speaker #10: for
Speaker #10: expectations are for sales a sense and just anything else relevant coming out of the housing market Appreciate , specifically in your over outlook so ?
Speaker #10: expectations are for sales a sense and just anything else relevant coming out of the housing market Appreciate , specifically in your over outlook so for what your
Rick Westenberg: Hey, Stephen, good morning. So we've got pretty modest expectations with regards to some of the macro drivers. From an overall R&R perspective, we're assuming both in terms of the US market in which we play, as well as international, roughly flat. And that's contemplating volume down and, and pricing up, kind of offsetting one another. From an industry perspective, we, Masco, expect to outperform that and be flat to slightly up or up low single digits. In terms of some of the other macro factors, existing home sales, new home builds, et cetera, pretty modest expectations, nothing significant differently from what we've seen in the last couple of years.
John Nudi: Additionally, our board authorized a new $2 billion share repurchase program, underscoring Masco's resilient business model and strong financial position, and the board's confidence in our future performance. Our M&A strategy remains consistent. We continue to selectively pursue opportunities with strong strategic fit and attractive returns, focusing on bolt-on acquisitions with our plumbing, wellness, and coatings businesses. Based on our expected operating performance and capital deployment strategy, we anticipate earnings per share for 2026 to be in the range of $4.10 to $4.30 per share. While the housing market remains pressured in the near term, we are confident that the fundamental support related to long-term home improvement demand are quite strong. US homeowner equity levels are at a record high, up more than 80% since 2019, providing greater capacity for home renovation projects.
Speaker #6: Stephen , good morning . So we've got expectations with to some of the drivers modest both in terms of market in assuming play macro
Speaker #6: regards we're R&R . And pretty volume down and international , up , kind US offsetting of pricing from an industry perspective . We Masco expect to existing home that's and slightly overall or up up low single digits to roughly in terms of some of the other macro factors .
Speaker #6: flat
Speaker #6: Existing home sales , new home builds
Stephen Kim: And if you did see an inflection upwards in existing home sales beyond your expectations, would you be expecting that you would see that more on the pricing side? Or do you anticipate that there would be certain other sort of subcategories that would particularly benefit or see it first?
Speaker #6: significant differently seen in the last we've couple of years from what . from an
Speaker #10: And if you
Speaker #10: an inflection upwards in existing
Speaker #10: home sales did beyond your your
Speaker #10: , would you expecting that you would
Speaker #10: the pricing do you anticipate would be that there Or , etc. sort of perspective , subcategories that other particularly benefit or would see it first ?
Rick Westenberg: Yeah, Stephen, that's a tricky one to answer. I think from a standpoint, I think pricing, as we've taken price with regards to mitigating both tariff and commodity costs, that's largely in place. Obviously, we continue to monitor the market. I think from an overall variability standpoint, I would presume volume would be the biggest dynamic, both in terms of upside opportunity as in terms of risk. I mean, we look at... You know, I gave you the assumptions with regards to the overall R&R industry. Within that, we look at plumbing as an opportunity for us, particularly in terms of how we're competing in the market.
John Nudi: Homes continue to age, with more than 55% of these homes now over 40 years old, an age that typically requires an elevated repair and remodel spending. Additionally, a large cohort of homes built in the early 2000s is now entering the prime remodeling age of 20 to 40 years. Significant pent-up demand for larger renovation projects continues to build. As consumer sentiment improves, interest rates decline, and existing home turnover increases, we expect this pent-up demand to become a tailwind for our business. With these strong fundamentals and the actions we are taking to optimize the business, we believe we are well positioned to deliver above-market top and bottom-line growth. We plan to achieve this through our consumer-driven strategy that leverages our industry-leading brands, expanded commercial capabilities, and enhanced operational excellence.
Speaker #6: , that's a tricky one to answer . I side ? think from a standpoint . think pricing , as we've taken price with regards to mitigating both and commodity from a tariff largely place .
Speaker #6: Costs. In monitoring the market, I think from a continued overall variability standpoint, I would presume volume would be the biggest. That's both in terms of upside and in terms of risk.
Speaker #6: I mean , we look Stephen opportunity , gave you the at , regards to with the overall you know , I Obviously , we we look on at plumbing as an opportunity , particularly in terms of how an we're competing in the in for assumptions we example , that , market gained we sales across the e-commerce trade and retail So we're seeing really good momentum in channels . regard .
Speaker #6: I mean , we look Stephen opportunity , gave you the at , regards to with the overall you know , I Obviously , we we look on at plumbing as an opportunity , particularly in terms of how an we're competing in the in for assumptions we example , that , market gained we sales across the e-commerce trade and retail So we're seeing really good momentum in channels .
Rick Westenberg: In Q4, for example, we've gained sales across the e-commerce, trade, and retail channels, so we're seeing really good momentum in that regard, and we're gonna continue to drive our performance, kind of relative to the market overall.
John Nudi: We look forward to discussing this strategy and our long-term goals in greater detail at our upcoming Investor Day on Wednesday, May 13, in New York City. Please save the date, and we look forward to seeing you there. Now I'll turn the call over to Rick to go over our fourth quarter and full-year results, and 2026 outlook in more detail. Rick?
John Nudi: Yeah, and Steven, I might just add that, obviously, existing home sales are important. I mentioned how important that is to, to our paint business. You know, beyond though, that we, we, you know, are 90% repair and remodel, and, and I think big picture, believe that there's a lot of opportunity once the market frees up. And you look at, I mentioned in the prepared remarks that home equity levels are at record highs, up 80% since 2019. Interest rates are heading in the right direction. I think the combination of some, additional cuts to interest rates, and then, and, and importantly, improved consumer confidence, we think that's gonna be really the driver to, to turn the market. So, whether that happens in 2020 or 2026 or not, we'll see.
Speaker #6: And continue to gain R&R in the market overall.
Speaker #7: Yeah , Stephen ,
Speaker #7: that existing are important important . I to our paint to business . You beyond that , though , know , are Q4 , 90% repair and I think big that is mentioned how believe that there's a lot of once the market and
Speaker #7: that existing are important important . I to our paint to business . You beyond that , though , know , are Q4 , 90% repair and I think big that is mentioned how believe that there's a lot of once the market and at I mentioned in the up remarks home sales levels are at record highs , opportunity prepared up since 2019 .
Rick Westenberg: Thank you, John, and good morning, everyone. Thank you for joining. As Robin mentioned, my comments today will focus on adjusted performance, excluding the impact of rationalization charges and other one-time items. Turning to slide 9, sales in Q4 decreased 2%, or 3%, excluding the favorable impact of currency. In local currency, North American sales decreased 5% and international sales increased 1%. Gross margin was 33.7% in the quarter. SG&A in the quarter was 19.3%, and in dollars, was in line with the prior year.
Speaker #7: Interest rates are heading 80% direction . I think the of additional to interest rates and importantly , improved consumer confidence , driver to turn the market .
John Nudi: But again, we think that those are the key things that'll be needed for us to get back to historical growth rates across our categories.
Speaker #7: that's going to be So some that happens in 20 or 26 or not , see . But we're going to again , we think that those are the key things that will be needed for we'll back to historical growth rates across combination our categories .
Stephen Kim: Okay, great. Thanks very much, guys.
John Nudi: Thank you.
Rick Westenberg: Operating profit was $259 million in the quarter, and our margin was 14.4%. Operating profit was impacted by lower volume and higher tariff and commodity costs, partially offset by pricing actions and cost savings initiatives. Our EPS was $0.82 per share in the quarter.
Operator: Your next question comes from Michael Rehaut of J.P. Morgan. Please go ahead.
Speaker #10: Great . Okay . we think Thanks very much ,
Speaker #10: Great . Okay . we think Thanks very much ,
Speaker #8: .
Michael Rehaut: Hi. Yeah, good morning. Thanks for taking my questions. Wanted to hit on the restructuring actions contemplated for 2026. I assume part of that is with regards to moving Liberty over and integrating that. I just wanted to get a sense for, you know, what the dollar benefit you anticipate from those restructuring actions in 2026, and how much of that might be reinvested in the company? 'Cause I heard you say, you know, fund growth initiatives versus, you know, just a fall to the bottom line, so to speak.
Speaker #4: question Your next from Michael comes of J.P. you look Morgan . Please go ahead .
Speaker #11: Hi . my
Speaker #11: Hi . my morning .
Speaker #11: . One hit questions wanted to the
Rick Westenberg: Turning to the full year of 2025, sales decreased 3% over the prior year, or 2%, excluding the impact of our divestiture and favorable currency. Our divestiture of Kichler in Q3 of 2024 resulted in a decrease in sales of 2% year-over-year for the full year of 2025, while currency represented a 1% increase in sales. In local currency, North American sales decreased 5%, or 2%, excluding our divestiture, and international sales increased 1%. Gross margin was 35.5% and was impacted by higher tariff and commodity costs. SG&A, as a percent of sales, was in line with the prior year at 18.7%. Operating profit was approximately $1.3 billion, and operating margin was 16.8%.
Speaker #11: for contemplated I of that is is with regards Good liberty moving Thank you 2026 . really the integrating whether that . I just a sense for to the benefit you dollar anticipate from those in 2026 , and how much of that assume part be reinvested in the might ?
Speaker #11: Because I heard you , you know , fund growth say initiatives versus , you know , restructuring just a fall to bottom line , over to speak so .
John Nudi: Yeah, so maybe I'll start and Rick can add on as well. You know, obviously, with markets that aren't growing historical rates, you know, we wanna take action and make sure that we have the cost structure that's needed for today and into the future. So the actions are broad. So again, Liberty would obviously be a part of it, something that we pointed out. But we're really looking across our organization just to make sure we have the right footprint in terms of manufacturing base, make sure that we're leveraging our scale where it makes sense. And the idea is to take those dollars, you know, drop similar to the bottom line as we've guided. Again, we wanna grow margins in 2026 and into the future.
Speaker #7: So maybe I'll start and Rick and add well
Speaker #7: , you know , with obviously
Speaker #7: That aren't, you know, historical rates—growing, making sure that we have what is needed for day-to-day operations into the future, and what constructor that's needed as well.
Speaker #7: that aren't , historical rates , you know , growing make sure
Speaker #7: actions are broad . So again , liberty would be a markets part of it , obviously something that on as we out . wanted to get But we're really pointed have the we want to make sure we have footprint in terms of organization just manufacturing base .
Rick Westenberg: Lastly, our EPS for the full year was $3.96 per share. Turning to slide 10. Plumbing sales increased 5% in the fourth quarter, or 3%, excluding the favorable impact of currency. This growth was largely driven by pricing, which increased sales by 5%, partially offset by lower volume. In local currency, North American plumbing sales increased 4% in the quarter.... This performance was primarily driven by solid growth in our Delta Faucet and Watkins Wellness businesses. In local currency, international plumbing sales increased 1% in the quarter. Hansgrohe grew in many of its European markets, including its key market of Germany. This growth was partially offset by the ongoing challenging market dynamics in China. Segment operating profit in the fourth quarter increased 2% to $204 million, and operating margin was 16.3%.
Speaker #7: our Make sure that the we're leveraging our scale where it looking . And makes the take dollars , across you know , somewhere at the sense line , as we've guided again , we bottom want to grow 2026 and into the in And future .
John Nudi: And importantly, we wanna free up, differential amount of dollars that we can reinvest, back into creating capabilities. And we won't go into a lot of detail today, but at our main Investor Day, we'll really detail the capabilities that we're building to not only help us drive the bottom line, so things like, leveraging our scale with shared services and global purchasing, but importantly, creating capabilities that will drive our top line even faster. So things like e-commerce and digital marketing, brand building and consumer insights, and then finally, really accelerating innovation. So, again, I'll let Rick touch a little bit on the dimensions of, of this year and into the future. But, but just know that this is an area that we'll continue to focus on.
Speaker #7: to free up amount of dollars that we can reinvest back into creating capabilities . And we won't go into a detail differential But at our May today .
Speaker #7: Day , we'll lot of detail the drop building to help us bottom line . So things like leveraging our scale services and global purchasing , we want importantly , creating capabilities capabilities that will drive our top line faster .
Speaker #7: with shared
Speaker #7: So that we're seeing things e-commerce-like and digital, not only even building and marketing, consumer. And then insights, finally, brand accelerate innovation.
Speaker #7: So again , I'll let a little bit on dimensions of this year future . just know that this is But but an area continue to focus on .
John Nudi: We're gonna continue to drive hard from a cost standpoint, just because we do wanna keep growing our margins and keep investing in our capabilities as well.
Rick Westenberg: Operating profit was driven by cost savings initiatives and pricing actions, partially offset by higher tariff and commodity costs and lower volume. Turning to the full year of 2025, plumbing sales increased 3%, or 2%, excluding the favorable impact of currency. Favorable pricing contributed 3%, partially offset by lower volume, which decreased sales by 1%. In local currency, North American plumbing sales increased 3%, and international plumbing sales increased 1%. Full year operating profit was $904 million, and operating margin was 18.1%. Turning to Slide 11, decorative architectural sales decreased 15% in Q4. In the quarter, total paint sales decreased double digits due to lower volume.
Speaker #7: We're going to continue to drive hard from a cost standpoint, just do want to keep growing our margins and keep investing in our—the well.
Rick Westenberg: Yeah, Mike, with regards to restructuring and timing, as we indicated in our prepared remarks, we took a charge of about $18 million in Q4 2025, and we expect about $50 million of charges here in 2026. So we've embarked on restructuring actions, and we were highlighting this for a couple of reasons. One is because it's more significant than Masco has done in the recent past in terms of the extent of restructuring, all for the reasons that John mentioned in terms of the overall market dynamics, volume, et cetera. In terms of the and it's broad-based in nature, I would say in terms of benefits, those restructuring actions are gonna take hold as we move through 2026. They're contemplated within our guidance, and we do have some margin expansion contemplated in our guidance for 2026.
Speaker #6: timing . So as our prepared we took
Speaker #6: remarks , 18 million in charge Q4 that we'll of 2025 , about 50 million with regards
Speaker #6: So, in 2026, as indicated, we embarked on restructuring actions, and we were doing this for a couple of reasons. Really, it's more— we've seen significant charges here. Masco has, in the recent past, in terms of the restructuring, and Rick touched on that. John mentioned reasons for restructuring, highlighting, in terms of what's been done, the dynamics, volume, etc.
Speaker #6: In terms of the extent of it, I would say, in terms of the overall actions, they are going to be broad-based and take hold as we move through 2026.
Rick Westenberg: But the full benefit will be realized as we get into 2027 and 2028. And as John indicated, we'll provide more visibility in terms of our margin expectations as we get into our discussion at Investor Day in May.
Speaker #6: There are benefits, restructuring we are contemplating, and some margin guidance contemplated within for 2026. In our view, the full market benefit will be in '27 and '28.
Rick Westenberg: Volume was impacted by the favorable inventory timing in Q4 of 2024, as well as the impact related to the customer transition of our primer and applicator business in Q4 of 2025. Excluding these impacts, overall paint sales decreased mid-single digits, with pro paint sales growing low single digits and DIY paint sales decreasing high single digits, in line with our full year performance. Operating profit in the fourth quarter was $76 million, primarily impacted by lower volume and significantly higher tariff and glass antidumping duty costs at our Liberty Hardware business, partially offset by cost savings initiatives. We continue to take proactive actions to mitigate the impact of tariff and duties, and have announced the integration of the Liberty business into Delta Faucet Company.
Speaker #6: And as John expanded, we'll provide realized indicated visibility in terms of our margin expectations as we get into our Investor Day in May. But guidance discussion at Q4 as we get more.
Michael Rehaut: Okay. No, appreciate that. I guess secondly, just to follow up on the earlier question around raw materials and, and where copper, copper prices are today. You said, obviously, that, you know, your '26 guide contemplates or reflect, you know, that you're aware of what's going on in the markets. I just, you know, a little just for a little clarity's sake, does that imply that, you know, if copper prices today if copper prices of today were to hold, that would be, in effect, a neutral impact on, let's say, the second half of the year because there is a lag? Or would there need to be some additional adjustments taken to make sure that you can, you know, achieve the, the guidance that, that you've laid out?
Speaker #11: Okay , no , I appreciate that . I just guess to follow up , secondly , on earlier question around raw materials where copper prices are today , you said obviously that or contemplates 26 guide reflects that you're aware of what's going on markets .
Speaker #11: I just , you just clarity's know , a copper your prices prices of little , copper up today to would be in a in the know , , let's say , the second half of the year , imply because there is a lag that , you would there .
Rick Westenberg: We believe this integration will provide a significant opportunity to further optimize the operation and improve the profitability of Liberty, as we leverage the capabilities and scale of the combined business. Operating profit margin was 13.9% in the segment. Turning to the full year of 2025, sales decreased 14%, driven by our Kitchen divestiture and lower volume, which decreased sales by 6% and 8%, respectively. Excluding the impact of the prior year inventory timing benefit, pro paint sales were up low single digits, and DIY paint sales were down high single digits for the year. Full year operating profit was $457 million, and operating margin was 17.8%. Turning to Slide 12, our balance sheet remains strong, with gross debt to EBITDA at 2.1x at year-end.
Speaker #11: need to impact some additional and taken to adjustments sure that you can , you know , the the you know , that that achieve you've laid effect , ?
Rick Westenberg: Yeah, Mike, without giving you a specific figure in terms of what we've pegged our plan at, what I can say is we have contemplated elevated copper prices. We haven't contemplated copper prices at the levels that they've reached in the recent past, like above $6 per pound from a COMEX perspective. But that's something that we continue to monitor. We do have, as I mentioned earlier, to Matt's question, a bit of a delay with regards to when it impacts our P&L. So it does give us the opportunity to respond, whether it's through further cost actions or pricing, to mitigate those impacts. And so that's something that we continue to monitor, and we've demonstrated the ability to offset these types of headwinds in the past.
Speaker #6: Mike , without Yeah . giving you a specific in terms of
Speaker #6: our figure
Speaker #6: plan can say , what I do have we have is we elevated copper contemplated . We prices contemplated prices
Speaker #6: levels be reached in past , guidance like above $6 per pound from
Speaker #6: levels be reached in past ,
Speaker #6: something that Comex continue to . But match do have , mentioned earlier , to to
Speaker #6: monitor . a impacts our question a it does when it delay with
Speaker #6: monitor . a impacts our question a it does when it delay with copper . Whether it's the on or us
Rick Westenberg: And so it may not be one for one from a timing perspective, and there might be both risk and upside relative to our the copper assumption. But we do, we do monitor it very closely, and we do take action accordingly.
Speaker #6: to mitigate impacts . And something that we demonstrated the
Speaker #6: to mitigate impacts . And something that we demonstrated the ability to actions to these types of headwinds in the past . And so that's not be so one for one from a timing Does that perspective .
Rick Westenberg: We ended the year with $1.6 billion of liquidity, including cash and availability under our revolving credit facility. Working capital was 16.7% of sales at quarter end. Working capital was impacted by tariff-related dynamics, including higher material costs and pricing, which resulted in increased working capital balances in 2025. We anticipate working capital as a percent of sales will be approximately 16.5% in 2026. Our free cash flow for the year was over $850 million, a bit stronger than anticipated, driven by disciplined cost and working capital management, achieving free cash flow conversion of nearly 100%.
Speaker #6: And there might respond . . both risk and upside today were to
John Nudi: Yeah, I would just say, Mike, look, it's one of many risks and opportunities that we continue to look at. So I, I would say we feel good about where the call is today. If, if it moves materially, we'll, we'll take actions to make sure we mitigate it.
Speaker #6: our continue be . But there but we do . We out closely . And we do take monitor . action accordingly . hold
Speaker #7: would just Yeah . I say , Mike , look ,
Speaker #7: So I would look at . say
Speaker #7: So I would look at . say That continue to we feel good where the call is
Michael Rehaut: Great. Thanks so much.
Speaker #7: we'll take materially , If it actions mitigate to make today . about .
Operator: Your next call comes from Susan Maklari of Goldman Sachs. Please go ahead.
Speaker #11: so
Speaker #11: much Great . Thanks
Operator: Thank you. Good morning, everyone.
John Nudi: Good morning.
Speaker #4: The call comes from Susan Maklari of Goldman Sachs. Please go ahead.
Speaker #4: call comes from Susan Maklari of as I Sachs . Goldman Please go ahead
Operator: Good morning. Building on your recent comments to Mike's questions, can you talk a bit about the executive committee that you formed there, some of the initiatives that you're gonna be really focused on as you think about driving that growth, and anything specific that we should be focused on for 2026 as it relates to that?
Rick Westenberg: Given our strong cash performance, we were able to return $832 million to shareholders through dividends and share repurchases, including the repurchase of $217 million in stock in Q4, and the repurchase of $571 million for the full year. Now let's turn to Slide 13 and review our outlook for 2026. The guidance that is being provided today reflects the integration of Liberty Hardware into Delta Faucet Company. Therefore, Liberty's results will now be included in the plumbing product segment, versus previously being included in the decorative architectural segment. For comparison purposes, we have recast our segments in 2025 by quarter to reflect this change. This information can be found in the appendix of our earnings deck on our website.
Speaker #12: you . Good morning Thank everyone .
Speaker #12: Building . Good And we've on . sure we your recent morning comments
Speaker #12: talk a bit about executive you committee that there ? Some of the the that you're going to be really initiatives focused about driving
John Nudi: Yeah, Sue, this is John. I'm happy to take that question. I'm excited about the new executive committee, and really, it was designed to do two things: One, allow us to get closer to the business. As, as we all know, the world's moving faster than ever before, including our consumers and customers, and we wanted to bring our four big BU leaders onto the senior team of the company. That's the first time we've done that at Masco. Their businesses make up more than 80% of our total business, and we meet at least weekly. We talk about what's working, what's not, where there's challenges, and we're flowing resources to those challenges more quickly than we have in the past. And again, just being really in touch with the business is what we're shooting for.
Speaker #12: growth ? And anything specific that formed
Speaker #12: On 2026, as it relates to that.
Speaker #7: Yes , sir . This is
Speaker #7: about the for John . . Your next committee and I'm really it was designed to do two One , allow us to get closer to the business as as know , the world is moving faster than ever before , including our consumers and we all customers .
Speaker #7: And we wanted to bring our excited boo leaders four big onto the senior team of the company . It's the first time we've done that that their make up businesses , more than in business meet at least we We talk about what's working , there's weekly .
Speaker #7: And we wanted to bring our excited boo leaders four big onto the senior team of the company . It's the first time we've done that that their make up businesses , more than in business meet at least we We talk about what's working , there's weekly . where flowing what's resources and we're to those quickly on as than we have in the past .
Rick Westenberg: Our guidance also includes the impact of currently enacted tariffs in effect in February, inclusive of the 10% reduction in China tariffs that went into effect after our Q3 earnings call. As a result of this tariff reduction, as well as proactive and ongoing changes to our sourcing footprint, we now estimate that the total annualized cost impact from tariffs to be approximately $200 million before mitigation, down from an annualized $270 million as of our Q3 earnings call. Of the $200 million annualized cost impact, approximately $80 million is related to the current 20% China tariffs, and the remaining approximately $120 million is driven by a combination of the various tariffs on countries other than China, the 50% tariffs on steel, aluminum, and copper, and the glass antidumping duties.
John Nudi: In addition to that, Behr is now reporting directly to me, as you know, they deal with our largest customer. I think that helps with decision-making. It helps me be really in tune with what's happening on that important business, as well as with our most important and largest customer as well. In addition to that, the goal is to leverage our scale better. Masco has a long history of driving a lot of success. We've done that in a very decentralized way. And what I would say is, I don't plan to centralize this company. That's not the goal at all. But the goal is to really leverage our scale where it makes sense. And to do that, we need to make sure that we do it in a smart way.
Speaker #7: again , just being challenges more touch with the is shooting for . , and that And , bear is now really in to me .
Speaker #7: As you deal with our largest customer . I think that helps with making . helps me It be really in tune happening on they business , as well as directly to our most largest with customer , as well .
Speaker #7: In to that , the goal addition leverage better . is to has a long decision what's history of lot of . We've done that success Masco in a very decentralized is I don't plan way , this company .
Speaker #7: That's centralize all . our scale goal is to really our scale In addition leverage makes sense important and . And to we need do that , to make sure know , and what I smart way .
John Nudi: So as we build these strategies to leverage our scale, having the business unit leaders be a part of the strategy of development, and then obviously, the execution as we go to market and deploy these capabilities, things that I talked about, like digital marketing, e-commerce, and brand building, consumer insights, and innovation. Having them to be a part of the development, I think, is really important. So our goal is to keep doing what we've done historically from a margin standpoint, keep driving margins, but probably grow a bit more quickly on the top line. And bringing this growth mindset to Behr is what we're trying to do as an executive committee.
Speaker #7: that we do it as we these strategies to to scale , unit leaders be a part of in a leverage our the and obviously the strategy execution So go to market and deploy these .
Rick Westenberg: We anticipate the full $200 million will impact 2026. This is up from the in-year impact in 2025 of approximately $150 million, largely due to the timing of tariffs as they were implemented throughout 2025. Our teams continue to actively work to further mitigate these costs and recover the cost and margin impact through a combination of levers.... These include cost reductions, continued efforts to change our sourcing footprint, and pricing where necessary. We anticipate that these mitigation actions will offset the direct cost impact of the currently enacted tariffs in 2026. To provide an update on our China exposure, in 2026, we expect to import approximately $400 million from China that is subject to the reciprocal tariffs, down from our 2025 exposure of $450 million.
Speaker #7: Things that I would say capabilities talked like digital marketing and then building and consumer insights and innovation , having them about , brand development , I to be a our goal important .
Speaker #7: part having is we've done historically from a to standpoint , keep margin driving margins . But probably quickly on the top line . And bringing this growth mindset to to do as an committee grow a .
Operator: Yeah. Okay, that's great color. And then turning to the cash flow side of the business, you guided for working capital to come down a bit to 16.5% of sales this year. Can you talk about the path of getting there, further potential upside to that as, as conditions perhaps normalize? And then how we should be thinking about what that means for overall cash generation and the uses of that cash?
Speaker #12: Yeah , okay . That's great . . And then turning
Speaker #12: Yeah , okay . That's great . . And then turning
Speaker #12: flow side of the
Speaker #12: working bear is what bit , 16.5% of sales year . Can guided Color you talk about path the really keep doing of Further upside to there .
Speaker #12: capital .
Speaker #12: conditions
Speaker #12: conditions as generation receivables .
Rick Westenberg: Sure, Sue, it's Rick. So with regards to working capital, as you may recall, and I believe I mentioned this in my prepared remarks as well, 2025 working capital was adversely impacted by the tariff dynamic, and what I mean by that is a couple of folds. One is, as cost bled into our inventory and as pricing bled into our receivables, that inflated our working capital ratios. Also, from a payment timing perspective, tariffs are due on shorter payment terms than our regular vendor payables, and so that shortened our payable days as well. And so those impacts took hold in 2025 and were adverse impact in terms of our working capital dynamic. In 2026, we expect more of a return to normalization.
Speaker #12: perhaps normalize and then how we should be thinking about what that overall cash we're trying and the that getting cash uses of .
Rick Westenberg: Based on our continued efforts, we anticipate that our China exposure will be less than $300 million as we exit 2026. This represents a greater than 60% reduction from our peak exposure in 2018. From a segment perspective, with a shift of Liberty Hardware to the plumbing product segment, nearly all of our tariff exposure and impact reside in this segment. Now turning to our expected financial performance for 2026. For Masco overall, we expect 2026 sales to be flat to up low single digits and operating margin to expand to approximately 17%, up from 16.8% in 2025. Our 2026 sales guide reflects an assumption that the global repair and remodel markets in aggregate will be roughly flat.
Speaker #6: Sure . Sue , it's
Speaker #6: may recall , and
Speaker #6: may
Speaker #6: prepared remarks well ,
Speaker #6: capital was adversely capital executive by the by tariff
Speaker #6: I mean a couple of fold . the means is is , into our
Speaker #6: inflated our working capital ratios this from a payment One perspective , tariffs are due shorter terms payment regular vendor payables . That that shortened And is our potential payable days as bled well .
Speaker #6: And so those impacts took hold, as were for impact terms of our working in capital dynamics in also 2026. We expect more of a return to normalization.
Speaker #6: And so those impacts took hold , as . were for impact terms of our working in capital dynamics in Also 2026 . We expect more of a adverse Will be some residual course , for the impacted But historically .
Rick Westenberg: There'll be some residual implications, of course, for the tariffs, but 16.5% is more where we've run historically, and so that's more of a normalization, I would call it, with regards to our working capital. From an overall cash allocation perspective, our capital allocation framework, as you know, has not changed, and we're consistently deploying capital as we've done in the past. And that's, number one, first and foremost, investing in the business, and we guided to an expectation of approximately $190 million of capital expenditures in 2026. Second is an investment-grade credit rating, which we have, you know, securely in place.
Speaker #6: that's more of And so on a And so normalization I would regards with our to call it capital from an cash our working or Of cash allocation perspective , our capital timing framework , as you know , allocation changed .
Rick Westenberg: As we think about the cadence for the year, excluding the impact of currency, we expect sales to be roughly flat to slightly up in both the first and second half of the year. We expect SG&A as a percent of sales to be in line with 2025, as we continue to invest in our business for future growth, while also maintaining cost discipline. Also, as it relates to operating margins, given the timing of tariff impacts, which largely impacted our results in the second half of last year, we anticipate total Masco margin contraction in the first half of the year, with expansion expected in the second half as we lap the tariff impact and as our mitigation actions continue to take hold. In our plumbing segment, we expect 2026 full year sales to be up low single digits.
Speaker #6: And we're not deploying capital as we've done one . in the foremost , investing in the business that's number to past . an approximately And $190 million of capital expenditures in 2026 .
Rick Westenberg: Third is a relevant dividend, and as John and I both mentioned, we got support from the board to increase our dividend 3% to $1.28 per share for 2026. And then all available cash that we don't deploy to capital investments or to the dividend are available for share buybacks or M&A activity. And we indicated our expectation is that number would be about $600 million for 2026.
Speaker #6: investment which we Second is an securely in place . expectation of Third is relevant John and I both mentioned dividend we got support our increase dividend 3% board to to , you know , share $1.28 per And for 2026 .
Speaker #6: And that is all, to don't capital, then or to, are that we investments available, buybacks and activity. Indicated about our activity or that is to deploy cash—$600 million for 2026.
Speaker #6: and is all to don't capital then or to are that we investments available buybacks And activity . indicated our about or the is that deploy cash $600 million for would be we
Rick Westenberg: We anticipate the full year plumbing margin will be approximately 18%, up from a comparable 2025 margin of 17.6%. Margin expansion will primarily be driven by pricing discipline, operational efficiencies, and continued cost savings initiatives. In our decorative architectural segment, we expect 2026 sales to be roughly flat with the prior year. We expect our pro paint business will increase mid-single digits, and our DIY paint business will decrease mid-single digits. We anticipate the full year decorative architectural margin to be approximately 19%, relatively in line with a comparable 2025 margin of 18.9%, with a continued focus on cost savings initiatives.
Sam Reid: Okay. Thanks for the color, and good luck with the quarter.
Rick Westenberg: Great. Thanks, Sue.
John Nudi: Thanks, Sue.
Operator: Your next question comes from John Lovallo of UBS. Please go ahead.
Speaker #12: Thanks for the color and good luck
Speaker #6: Great . M&A
John Lovallo: Good morning, guys. Thanks for taking my questions as well here. The first one, just on Liberty Hardware. It looks like the operating margin was kind of mid to high single digits in 2025, and I'm sure that was impacted by tariffs, but that compares to sort of 16 to 17% in 2024. So I guess the question is, you know, what are your expectations for Liberty Hardware margin embedded in the plumbing outlook? And can you remind us why this business is still considered core?
Speaker #8: Sue expectation Thanks , .
Speaker #4: question comes next from
Speaker #4: question comes next from
Speaker #4: Go ahead, UBS. Please, your question.
Speaker #13: guys .
Speaker #13: Thanks for taking my questions as well here . one just on first Liberty Hardware . It looks like the operating .
Speaker #13: Thanks for taking my questions as well here . one just on first Liberty Hardware . It looks like the operating . share
Speaker #13: kind of high single number I'm
Speaker #13: tariffs . But that impacted to sort of
Speaker #13: compares guess the Lovallo question is in what are your expectations for Liberty So I margin embedded in the plumbing for ? And margin can you sure that was us why this business is you .
Rick Westenberg: Sure, John, it's Rick. So we typically do not comment on individual business unit performance, but obviously, with the shift of Liberty Hardware from our decorative architectural segment to our plumbing segment, it creates a bit more visibility. And as you noted, our margins were adversely impacted in 2025. And that's really, I would say, primarily driven by a couple things. The volumes were a bit challenged, but really even more than that, from a profit margin perspective, we were hit significantly by tariff and the glass anti-dumping duties. And just as a reminder, the glass anti-dumping duties impact our shower door sourcing, and that was at a rate of 323%.
Speaker #13: considered core ?
Speaker #6: Sure , John The it's Rick
Speaker #6: Sure , John The it's Rick
Rick Westenberg: With regards to capital allocation, we expect to reinvest approximately $190 million through capital expenditures to pay a dividend of $1.28 per share, up 3% from our 2025 dividend, and to deploy approximately $600 million towards share repurchases or acquisitions in 2026. Finally, as John mentioned earlier, our 2026 EPS estimate is $4.10 to $4.30 per share. This assumes a 202 million average diluted share count for the year and a 24.5% effective tax rate, which is consistent with our 2025 effective tax rate. Additional financial assumptions for 2026 can be found on slide 16 of our earnings deck. With that, I'd like to open up the call for questions. Operator?
Speaker #6: Comment on individual business thank performance, but obviously with the shift of Liberty Hardware from our Decorative Architectural segment to within our Plumbing, it creates a bit, Jon, more.
Speaker #6: comment on individual business Thank performance , but obviously with the shift of Liberty hardware from our decorative architectural segment to unit our plumbing it creates a bit John , more segment , And as you noted , our our margins were adversely digits outlook impacted 2025 .
Speaker #6: really , I would say , that's primarily driven Volumes were of things . but really by a couple even challenged , a profit margin perspective , hit significantly by tariff and the glass in anti-dumping duties .
Speaker #6: And just as a reminder , the glass anti-dumping duties door shower that was sourcing of 323% . to say , the team that from So needless working to change our footprint .
Rick Westenberg: So needless to say, the team has been proactively working to mitigate and change our sourcing footprint to address that duty impact, and we're making good progress on that, and that will be something that we mitigate over the course of 2026. As it pertains to Liberty overall, Liberty is a core part of our business. As John noted in his comments, over half of the sales of Liberty are branded Delta. There's a great product complement, portfolio complement that Liberty possesses in terms of kitchen and bath hardware and shower doors, that we're really excited will be even more successful when we integrate it into Delta in 2026.
Speaker #6: To address that . That duty sourcing we're making good progress on that . will be we And that mitigate over the course of something that impact our 2026 mitigate and as it liberty , overall a , liberty of our business noted in his comments , of the sales of John .
Operator: Thank you. We will now begin the question and answer session. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question and one follow-up question during the Q&A session. To ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star, then the number two. One moment, please, while we assemble the queue. Your first question comes from Matthew Bouley of Barclays. Please go ahead.
Speaker #6: Delta is a great product. A compliment is that Liberty of Kitchen branded hardware and shower doors really, that we're even more excited and successful with regard to possessing and integrating it into there when we get to 2026.
John Lovallo: Got it. And then on the paint sales side, I think you guys talked about paint being down 15%, but you called out a couple sort of one-time items, if you will, the inventory timing and the customer transition of primer and applicator businesses. Can you just help sort of break out the impact of each of those two factors in that number?
Speaker #13: Got it . And
Speaker #13: then on I think talked you guys paint sales side , being 15% , but called out
Speaker #13: a will , the inventory timing and about paint the customer of items , if you applicator and businesses . Can of break help sort impact Delta that of those two number ?
Matthew Bouley: Good morning, everyone. Thank you for taking the questions. Maybe just one common question we're getting from investors now is around commodity inflation and specifically copper. So maybe just a quick question there around how you're embedding that into your guidance for plumbing margin expansion in 2026, and maybe the sort of timing of that commodity impact. Thank you.
Rick Westenberg: Sure, John. So you're right. I identified a couple of items that provided a bit of impact in Q4. What I would say is not new news is the inventory channel build in Q4 of 2024 that we experienced, and we had flagged as a favorable impact in Q4 of 2024, and an unfavorable comparison as we look at Q4 of 2025. That had about a mid-single-digit impact in terms of our volume and sales for the business on a year-over-year basis. And then with regards to the transition of the primer and applicator business from one of our customers, that had about a single digit impact in terms of sales in the quarter.
Speaker #13: you just
Speaker #6: Sure , you're right ,
Speaker #6: So of we
Speaker #6: a in would say is But I not core part of Q4 . news is the inventory of channel build in John . of 2024 that we a experienced .
Speaker #6: of as items Q4 impact unfavorable as we look at out the Q4 2024 , in an 2025 , that had about a And we comparison , impact in and terms of digit sales for the Q4 business on down basis .
Rick Westenberg: Sure, Matt, it's Rick. Good morning. So with regards to commodity inflation, as I'm sure you've been seeing, particularly with copper, we saw that really tick up later part of last year, and really the first part of this year. We're monitoring very closely. It's obviously a volatile dynamic. With regards to inflation, we saw in our plumbing segment, mid-single digit inflation in Q4, so we're seeing some of that pull through, and we're expecting mid-single digit inflation in our guide for plumbing in the calendar 2026.
Speaker #6: favorable volume And then over year regards to the of the and applicator had from from from one of our customers a year that had a about in single terms transition of of sales in the quarter .
Speaker #6: one you strip out some of those impacts is what we saw digit through the course of the of the in line with year 2025 , which to down high single in terms of digits performance was digits low single in terms of pro .
Rick Westenberg: So we thought it was appropriate to adjust those out as it pertains to providing a more representative picture of our performance during the quarter. Our performance during the quarter, quite frankly, when you strip out some of those impacts, is in line with what we saw through the course of the calendar year 2025, which was down high single digits in terms of DIY and up low single digits in terms of pro. We expect, as John have articulated, an improvement in that trend rate as we move into 2026, in terms of overall paint sales being roughly flat year-over-year, with DIY down mid-single digits, and pro up mid-single digits.
Rick Westenberg: So it's something that we've contemplated. Admittedly, it is volatile, and there's risk and upside, depending on how things play out.
Speaker #6: So we thought it was impact of to those adjust appropriate pertains to representative providing a more picture of our during the quarter and our performance during the quarter .
Rick Westenberg: As a reminder, with regards to how you think about commodities flowing through to our P&L, it's usually about a six-month lag in terms of when you see the commodity costs in the market before it hits our P&L. So that's why you're seeing it kind of later in Q4 in 2025 and in 2026. So that delay is, and so to the extent that there's movement one way or the other, you can envision that lag would stay true.
Speaker #6: And we expect the of , as , I've Quite articulated , an improvement in that a trend as we move rate into 2026 .
Speaker #6: of In terms sales being overall paint roughly John year , with DIY DIY mid-single pro digits and mid-single up digits
John Lovallo: Got it. Thank you, guys.
Rick Westenberg: Sure, John.
Matthew Bouley: Okay, perfect. Thank you for that, Rick. Second one, pricing in plumbing. I think I heard you say 5% in the Q4, and correct me if I'm wrong, but I think that would suggest price was probably above that in North America, assuming it was below that level in the international business. And so given that level of price, can you speak a little bit about what you're expecting to kind of flow through in the first half of 2026? Any kind of early reads on your initial January pricing actions in that segment?
John Nudi: Thanks, John.
Operator: Your next question comes from Sam Reid of Wells Fargo. Please go ahead.
Speaker #13: Got it .
Speaker #13: Thank you
Speaker #13: guys
Speaker #13: .
Speaker #8: John .
Speaker #8: Thanks , .
Speaker #8: John Your next
Speaker #8: . Sure , down
Sam Reid: Thanks, everyone. Just wanted to circle back on the mid-single-digit plumbing pricing for 2026. If you could just disaggregate in your outlook between wholesale and retail channel pricing. Would just love some perspective on how potentially those retail conversations are going, and also just how you might be managing price gaps that might be evolving between wholesale and retail and plumbing.
Speaker #4: question from Sam flat Wells Fargo . ahead go .
Speaker #4: question from Sam flat Wells Fargo . ahead go
Speaker #14: just Thanks , wanted to on the circle back
Speaker #14: could just 2026 . pricing in your If you digit wholesale and year over channel , would pricing some retail on perspective just love potentially how conversations those going .
Matthew Bouley: And if you're expecting that to contribute additional price on top of what you've already got, and kind of how that would flow through the first half and second half. Thank you.
John Nudi: Yeah, Sam, this is John. I'll take a crack at this. So, you know, I would say, in terms of pricing and plumbing, we feel good about, you know, where we are today and the conversations we have with customers are being, you know, constructive. As you can imagine, customers don't love pricing no matter the environment, so we always have to give good justification for it, and we're working through that as we speak right now. We won't get into, you know, channel by channel.
Speaker #14: you might be And also price evolving be between wholesale and Please and plumbing gaps .
John Nudi: Yeah, hi, Matt. It's John. Maybe I'll start and then turn it over to Rick to get into the flow for 2026. You know, I would say, really pleased with the way that our plumbing team has handled, you know, a lot of challenges in 2025. Obviously, between tariffs and commodities, they were faced with a lot and really took action and really used to say, some sophisticated tools to take precise pricing, and really across all of our channels. And the good news is we continue to grow share through that time period.
Speaker #7: crack at I'll take a this . Sam , this is
Speaker #7: , you So
Speaker #7: , you So know , I would pricing and terms of plumbing , feel good
Speaker #7: about today . And the take a retail conversations John . we have with customers are retail being , you know can imagine , customers don't love pricing I'll no matter the environment .
John Nudi: It's just not something that we really guide to, but I can tell you that we're putting some good discipline in place in terms of our strategic revenue management approach, and that means just having strategies by channel, making sure that we have, you know, a good idea of price elasticity and where we stand versus our competitors. And I think at the end of the day, what you really want to do is keep growing your business while you take price, and clearly, we're doing that. We're growing nicely. We're growing share in the category. Part of that is just being competitive, which we believe we are, and it's also about building your brands and about innovating.
Speaker #7: we So justification for it . good And we're working through always have now . to give right We get into won't , you know , that we really guide to .
Speaker #7: we So justification for it . good And we're working through always have now . to give right We get into won't , you know , that we really guide where we But I are It's just you that can tell we putting channel .
John Nudi: As we've taken smart pricing, we believe we're well positioned in the market. And again, I'll let Rick talk a little bit about the flow and how that will happen.
Speaker #7: discipline in place in our terms of strategic management approach . And that are just having making some good by sure that we're we idea channel , elasticity and where we stand versus our competitors .
Speaker #7: discipline in place in our terms of strategic management approach . And that are just having making some good by sure that we're we idea channel , elasticity and where we stand versus our means And I have really want keep think at the growing your to do is price strategies day , doing that .
Speaker #7: discipline in place in our terms of strategic management approach . And that are just having making some good by sure that we're we idea channel , elasticity and where we stand versus our means And I have really want keep think at the growing your to do is price strategies day , revenue growing the category a good is just being not something believe we are .
John Nudi: But again, really pleased with the way that we're navigating, this environment.
Rick Westenberg: Yeah, Matt, with regards to your specific question, you heard correctly that pricing and plumbing was a 5% benefit in Q4. It's fair to assume that international wasn't as significant. I'll leave it at that. As it pertains to 2026, we've indicated that we would expect mid-single digit pricing for plumbing in the calendar year. From a case perspective, we won't get into the details, but suffice it to say that we started to implement mitigation actions, as John alluded to, really, as tariffs started to take hold across cost, sourcing, and pricing, really mid-year last
John Nudi: So we feel good about where we are from a, you know, pricing standpoint for sure, but more importantly, just a business standpoint, particularly on our plumbing business in North America. Our Delta team, I think, did a fantastic job in 2025, navigating an incredible number of headwinds, and we really like where we stand today.
Speaker #7: about And innovating . it's So clearly we're feel good are from a about pricing . standpoint for sure . from , But but more business Part of that growing particularly on our plumbing We're business in North America , our Delta take in 2025 , . also incredible headwinds .
Speaker #7: about And innovating . it's So clearly we're feel good are from a about pricing . standpoint for sure . from , But but more business Part of that growing particularly on our plumbing We're business in North America , our Delta take in 2025 , .
Speaker #7: job where we we stand
Sam Reid: ... That helps. And maybe switching gears to paint. I believe in the prepared remarks, one of you mentioned a job site delivery as being a lever for the paint business. I would just love to understand how widespread job site delivery is today, perhaps the runway, and then any color on who's paying for some of the outside, trade representatives. Is that being split with Home Depot, or are you bearing those costs on the paint business? Thanks.
Rick Westenberg: year. So you can imagine, as we lap that activity in 2026, you'll see some moderation with regards to year-over-year comparison. But for the full year, you can expect a mid-single digit pricing benefit.
Speaker #14: That helps . And maybe switching gears to paint , I believe prepared mentioned
Speaker #14: as lever for the paint
Speaker #14: being delivery is widespread today . Perhaps the . And And site any color job who's runway the some of on for we trade representatives ?
Speaker #14: We'd just love to how a
Matthew Bouley: Okay. Thank you both. Good luck, guys.
Rick Westenberg: Thanks, Matt.
John Nudi: Thank you.
Operator: Your next question comes from Anthony Pettinari of Citi. Please go ahead.
John Nudi: Yeah, absolutely. So in terms of order online and deliver the job site, it's something that's expanding. We started in our big markets where there's density of stores, because we, in many cases, set up micro distribution sites that help with that distribution. So we think that there's plenty of runway left there. I won't give you a percentage, but again, I think it's early to mid-innings on that ability to take friction out of the system for pros. So, more to come there. And the second part of the question was?
Anthony Pettinari: Good morning. Just pivoting from plumbing to DA, I'm wondering if you could, you know, talk about assumptions for price cost in 2026, any commodity cost trends that you'd call out, and any pricing actions that you can talk about?
Speaker #14: with Depot , or bearing those paint business ? being split
Speaker #14: Home
Speaker #14: costs on the
Speaker #7: of order online and
Speaker #7: that's expanding . We start absolutely . in
Speaker #7: that's
Speaker #7: big the job in there's terms of cases set micro in many Thanks . distribution that help with that , that because we our distribution .
John Nudi: Yeah, absolutely. This is John. As we look at, as we look at that, we are seeing some upward pressure on cost. As you likely know, we have a unique relationship with our large exclusive big box retailer and have a price cost mechanism in place. So we're not gonna comment on prospective pricing or even our conversations with our retail partner, but given the costs that we're seeing, you know, those conversations are beginning. We'll come back at future quarters and let you know where we shake out in that, that, that space.
Speaker #7: So we think that there's that's something plenty of runway I won't give paying you a left there . again I think up it's early to innings mid that on to take ability out of friction navigating an pros system for markets where outside .
Speaker #7: percentage , this , it's some of get after joint , some of would say it's , to come it really the initiative . But you know , we like this business a lot .
Sam Reid: Just on the economics of your outside-
John Nudi: Oh, yeah.
Sam Reid: Representatives.
Speaker #7: there . And the So second part of the
Speaker #7: there . And the So second part of the
John Nudi: Yeah, I would say, again, without getting into a whole lot of detail, I would say it's a true partnership, one that goes back 43 years with the Home Depot. In terms of how we get after this, it's some of it's joint, some of it's, you know, we invest. I would say it really depends on the initiative. You know, we like this business a lot. We're not talking about, you know, certainly, we're talking about 2026 and what we have to do to bend the curve. Importantly, we're talking much longer in terms of the horizon, what kind of investments we need to make ourselves, what kind of investments we're gonna make jointly, to really grow this business into the future.
Speaker #14: Just
Speaker #14: on
Speaker #14: on
Speaker #14: economics of
Speaker #7: Yeah your question
Speaker #7: without Is that getting into a whole lot of but it's a sites detail , I are you more . 43 back . years with partnership , the Home in .
Anthony Pettinari: Okay. Okay. And then in terms of DIY, I think you guided down mid-single digits. You know, are there any kind of big picture thoughts you can share in terms of, you know, the volume pressure in that business? And, you know, how much of it might just be a sort of a secular shift from DIY to pro, so maybe, you know, demand is not being destroyed; it's just being kind of shifted between the channels. Just kind of as you look back at the last, you know, three, four years, can you give us some context and how that informs your expectations for 2026?
Speaker #7: talking about , not you We're terms of know , certainly would say 2026 and what we have to do to it's bend the invest .
Speaker #7: we're Thanks .
Speaker #7: curve . depends on much terms of Depot I talking about talking ourselves , what investments we need kind of make the to And I've been impressed with the relationship incredibly that's into the over , obviously , a of what we're going to period .
John Nudi: And I, I've been incredibly impressed with the relationship that's developed over obviously a long period, and importantly, just the candor back and forth in terms of what's working, what's not. And I have a lot of confidence that we're gonna get to a better place on paint, starting in 2026, and then really accelerate from there. And, you know, the last thing I would mention is we made, you know, some leadership changes at Behr over the course of the last few months as well, and really pleased with the focus and the attention and what's happening at that BU at this point. So, I'll leave it at that. Thanks. Thanks, Sam.
John Nudi: Yeah, absolutely. So this is John. It's certainly been dynamic for sure. We do know that existing home sales correlate highly with DIY paint, and it makes sense. When you go to sell a home, you tend to paint it, and when you buy it, you tend to paint it again to put your own mark and style into the home. So as existing home sales were at three- or four-decade near lows, and then in 2025, it was challenging, and we saw that obviously in the previous years as well. As we look forward, we know that we have a strong DIY brand, one of the share leaders.
Speaker #7: And of candor back and forth in terms of importantly , what's working , make confidence that we're going have a lot of to a better on pain starting in really 2026 and then really there what's .
Speaker #7: And , you know , the last thing I made , you know , place some leadership to would just the over the bear last as really well .
Speaker #7: And changes pleased with the focus and the attention happening at that , mention is we get to that , that , that view at this point .
Speaker #7: And what’s—thanks, accelerate.
Sam Reid: Thanks, guys.
Speaker #7: So not . I'll that . Thanks , Sam And I .
Operator: Your next question comes from Trevor Allinson of Wolfe Research. Please go ahead.
John Nudi: We have amazing quality at great value, and we think we can actually tell our story better just to make sure that, you know, we, we get our, our continued growth share in the DIY market. The space that we're, you know, very excited about is the pro market. When you look at that, that segment, it's the biggest single segment Masco competes in. It's over $10 billion, and it's grown nicely, really over the short, medium, and long term. We have a relatively small share. We have less than a 10 share. Really proud that we gained 200 basis points of share since 2019. But we are squarely focused on growing that at a differential rate. The good news is, The Home Depot, our retail partner, is very, very squarely focused on the pro as well.
Trevor Allinson: Hi, good morning. Thank you for taking my questions. Another question on Deckers here. Margins came in a little weaker than what you were expecting in the quarter. Was that primarily volume related or drove the weaker margins? And then just given the lower starting point, as we exit 2025, how should we think about the cadence of Deckers margins throughout the year in 2026?
Speaker #4: Your question comes next from Allison Wolfe with Wolfe Research. Please go ahead.
Speaker #4: question Your comes next from Allison Wolfe Research . ahead Please go
Speaker #14: for taking of Hi . questions . my question deck here Another came in . Margins little weaker
Speaker #14: you were in expecting quarter . Was that primarily the a or drove the weaker margins ? And just then the lower starting point , as we exit 2025 , how Trevor should we about the think volume of deck throughout the margins in 2026 ?
Rick Westenberg: Yeah, Trevor, it's Rick. So in terms of the operating profit margin implications in Q4, it was impacted by really a couple factors. One is volume. And as we articulated, there were a couple of impacts that we highlighted in Q4. Obviously, the Q4 2024 higher inventory in our channel, and then the customer transition in Q4 2025, and then just the overall market dynamics. So volume, for a number of reasons, was impacted. And then in 2025, just as a reminder, Liberty Hardware is still part of that segment, and that was adversely impacted, as we talked about, by significant tariff in the 323% class antidumping duties. And so that weighed heavily with regards to operating profit margins.
Speaker #6: in Yeah , Trevor , So terms of it's
Speaker #6: implications in Q4 , it was impacted by couple of really a factors . given articulated , there were a couple of
John Nudi: So we're working to take friction out of the experience for the pro. Things like order online and pickup in store, which is available now. Order online and have it delivered to the job site, which we can do now. The Home Depot is trialing some trade credit, which we think will make a real difference. And then we've continued to increase the number of both outside and inside sales reps we have focused on the pro. So regardless of where the market goes, we like our ability to play both in DIY, where we're very strong today, and then we think there's a tremendous amount of upside in pro, and we'll continue to invest in that space, and again, very aligned with our retail partner in that initiative.
Speaker #6: One is volume impacts And as we that highlighted in Q4 . Obviously , the we we Q4 2024 higher inventory in our channel .
Speaker #6: the then And customer transition cadence in Q4 25 and then just the market volume , for overall a number of dynamics . was impacted then was in 2025 , just .
Speaker #6: Liberty as a Hardware is reminder , part of that segment . And that So still impacted was adversely as we And talked significant tariff in 323% glass anti-dumping And so that weighed duties .
Rick Westenberg: Now, we've been taking price, and we've been doing mitigating actions, but those take time to take hold, and so there's an implication there in the near term as it pertains to the operating profit margin. As we roll into 2026, obviously, you have to take into account the fact that we are shifting Liberty from our decorative architectural segment to our plumbing segment. We provided a breakdown from a quarterly cadence for 2025 on a recast basis in the appendix of our earnings deck, so I'd refer you to that, and we can certainly address questions as a follow-up. But I would say that would help, I think, provide visibility in terms of our cadence for our recast segment for decorative architectural, at least in 2025.
Speaker #6: heavily with regards to the to , to operating margins . Now , we've profit been taking been doing mitigating actions . But those price and we've take time to take hold .
Anthony Pettinari: Okay, that's helpful. I'll turn it over.
John Nudi: Thank you.
Operator: Next question comes from Stephen Kim of Evercore ISI. Please go ahead.
Speaker #6: And so there's an implication there in the near term as it pertains to the operating profit margin . As we roll 2026 , into to take obviously you have into account the fact that we are shifting liberty from our decorative architectural to our segment plumbing segment .
Stephen Kim: Yeah, thanks a lot, guys. Appreciate all the color so far. I guess, in your guide for fiscal 2026, can you give us a sense for what your expectations are for existing home sales, and just anything else relevant coming out of the housing market, specifically, in your outlooks?
Speaker #6: We've provided a breakdown from a quarterly cadence for 2025 on a recast basis in the appendix of our refer you to that . And deck .
Speaker #6: We've provided a breakdown from a quarterly cadence for 2025 on a recast basis in the appendix of our refer earnings address questions as a follow up .
Rick Westenberg: Hey, Stephen, good morning. So we've got pretty modest expectations with regards to some of the macro drivers. From an overall R&R perspective, we're assuming both in terms of the US market in which we play, as well as international, roughly flat. And that's contemplating volume down and, and pricing up, kind of offsetting one another. From an industry perspective, we, Masco, expect to outperform that and be flat to slightly up or up low single digits. In terms of some of the other macro factors, existing home sales, new home builds, et
Speaker #6: would say But I help . I think , provide that So I'd terms of cadence for our segment for decorative , architectural , at least recast in 2025 .
Rick Westenberg: And outside of the impacts that we just highlighted for Q4 in particular, I would say there's nothing that I would note at this point for 2026.
Speaker #6: And our outside of the the impacts that highlighted we just Q4 in particular , nothing say there's visibility in this that I would point note at for 2026 .
Trevor Allinson: Okay. Okay, makes sense. Thank you for that. And then you've talked about your expectations overall for the market in 2026. Can you talk about how you think Watkins performs relative to your overall plumbing portfolio, this year? And then can you remind us roughly the size of that business as you exit 2025? Thanks.
Speaker #14: Okay , okay . That makes sense . Thank you for that . And then you've talked about your expectations overall for the market in 2026 .
Speaker #14: Okay , okay . That makes sense . Thank you for that . And then you've talked about your
Rick Westenberg: cetera, pretty modest expectations, nothing significant differently from what we've seen in the last couple of years.
Speaker #14: your overall plumbing portfolio ? This then can you year . remind us roughly the size of that business as you exit 2025 ? Thanks I would .
John Nudi: Yeah, I'll take a crack at that. So, you know, we typically don't break out BUs within a segment. So, but what I would say is, you know, we really like the space that Watkins plays. Wellness is very much on trend, obviously, from a consumer standpoint. You look at the categories at play, spas and hot tubs only have 5 or 6% penetration in North America. We're the sure leader. We have two of the major, you know, premium brands in the space, in Caldera and Hot Springs. And then saunas are kind of a phenomenon right now. It's only 1% household penetration.
Stephen Kim: And if you did see an inflection upwards in existing home sales beyond your expectations, would you be expecting that you would see that more on the pricing side? Or do you anticipate that there would be certain other sort of subcategories that would particularly benefit or see it first?
Speaker #7: Yeah . I'll take I'll take a crack at that . So , you know , we don't typically break out booze within segment .
Speaker #7: So a but what say is , you know , we really like the space that Watkins plays . Wellness is very much on trend .
Speaker #7: consumer standpoint . Obviously from a at You look the categories play spas that we and hot tubs only have 5 or 6 , 5 or 6% penetration in America , where the cheerleader we have two of the major , premium brands in the space , and Springs North .
Rick Westenberg: Yeah, Stephen, that's a tricky one to answer. I think from a standpoint, I think pricing, as we've taken price with regards to mitigating both tariff and commodity costs, that's largely in place. Obviously, we continue to monitor the market. I think from an overall variability standpoint, I would presume volume would be the biggest dynamic, both in terms of upside opportunity as in terms of risk. I mean, we look at... You know, I gave you the assumptions with regards to the overall R&R industry.
John Nudi: If you look at pop culture at all, it's amazing how much people are talking about saunas and the benefits that come with them. So, look, it's been a bit of a mixed market over the last few years. They are bigger ticket purchases. We're exiting the year with momentum from 2025, and we feel good about our opportunities to grow, and, you know, at least in line with the plumbing segment in 2026, and probably grow even faster as we look forward, just given how much upside there is and how much on trend our products are.
Speaker #7: Caldera and then hot kind saunas are a phenomenon right now. It's only 1% household penetration, if you look at culture at all.
Speaker #7: It's pop about amazing how much benefits talking saunas and the people are that come with them . So look , been it's a bit of a mixed market over the few last There are bigger years .
Speaker #7: ticket
Speaker #7: exiting the with year We're from momentum 2025 , and we feel good about our opportunities to grow . And , you know , at least in line with And plumbing segment the 2026 and probably grow even faster as we look in forward .
Rick Westenberg: Within that, we look at plumbing as an opportunity for us, particularly in terms of how we're competing in the market.
Rick Westenberg: In Q4, for example, we've gained sales across the e-commerce, trade, and retail channels, so we're seeing really good momentum in that regard, and we're gonna continue to drive our performance, kind of relative to the market overall.
Trevor Allinson: Thank you for all the color. Good luck moving forward.
Speaker #7: Just given how upside there is much on products are trend our and how much .
John Nudi: Thank you.
Rick Westenberg: Thanks, Trevor.
John Nudi: Thanks, Trevor.
Operator: Next question is from Mike Dahl of RBC Capital Markets. Please go ahead.
Speaker #14: Thank you for all the color . Good luck moving forward .
Mike Dahl: ... Morning. Thanks for taking my questions. First one, just to drill down into the plumbing guide one more time. I think if you're up low single digits with mid-single digit price, so you're implying volumes down low singles. I think you ended up the year with volumes kind of closer to flat in plumbing. So can you just kind of dive into that a little bit more in terms of changes in your volume expectations versus what you've seen in recent trends in plumbing?
John Nudi: Yeah, and Steven, I might just add that, obviously, existing home sales are important. I mentioned how important that is to, to our paint business. You know, beyond though, that we, we, you know, are 90% repair and remodel, and, and I think big picture, believe that there's a lot of opportunity once the market frees up. And you look at, I mentioned in the prepared remarks that home equity levels are at record highs, up 80% since 2019. Interest rates are heading in the right direction.
Speaker #4: Next question is from Mike Dahl of RBC Capital Markets. Please go ahead.
Speaker #15: Thanks for the good morning and for taking my questions. First one, just to drill down into the plumbing guide one more time. I think if you're up low single digits with mid-single digit price—
Speaker #15: So you're implying volumes down, low singles. I ended up thinking you were with volumes kind of flat, closer to, and in... so can plumbing.
John Nudi: I think the combination of some, additional cuts to interest rates, and then, and, and importantly, improved consumer confidence, we think that's gonna be really the driver to, to turn the market. So, whether that happens in 2020 or 2026 or not, we'll see.
Speaker #15: you just kind of dive into that a little bit more in terms of changes in your volume versus what expectations in seen recent trends in plumbing ?
Rick Westenberg: Sure, Mike, it's Rick. In your dissection of our 2026 guide is accurate. We are guiding in terms of our plumbing volumes to be down low single digits that are partially offsetting the mid-single digit pricing. We expect overall plumbing sales to be up low single digits in 2026. As we looked back on 2025 in terms of our performance, we saw some of that pricing take hold in the latter part of the year, but from a volume perspective, we were down, depending on the period, 1 to 2%, from an overall plumbing volume standpoint. So effectively, we're seeing more of a continuation from a volume perspective in that same ZIP code. Obviously, we're investing in many areas to, as John articulated, grow the business.
Speaker #6: Sure , Mike , it's Rick in your dissection of our 2026 guide . Is accurate . So we are guiding in terms of our volumes to be down low , single digits that are partially offsetting the mid-single digit We pricing .
John Nudi: But again, we think that those are the key things that'll be needed for us to get back to historical growth rates across our categories.
Stephen Kim: Okay, great. Thanks very much, guys.
John Nudi: Thank you.
Speaker #6: overall plumbing sales to be up low single digits in 2026 , as we looked at back on 2025 , in terms of our performance , we saw some of that pricing take hold in the latter part of the year .
Operator: Your next question comes from Michael Rehaut of J.P. Morgan. Please go ahead.
Michael Rehaut: Hi. Yeah, good morning. Thanks for taking my questions. Wanted to hit on the restructuring actions contemplated for 2026. I assume part of that is with regards to moving Liberty over and integrating that. I just wanted to get a sense for, you know, what the dollar benefit you anticipate from those restructuring actions in 2026, and how much of that might be reinvested in the company? 'Cause I heard you say, you know, fund growth initiatives versus, you know, just a fall to the bottom line, so to speak.
Speaker #6: But from a volume perspective , we were down depending on the period , 1 to 2% from a from an overall plumbing volume standpoint .
Speaker #6: So effectively we're seeing more of a continuation from a volume perspective in that same code . zip Obviously , we're we're investing in many areas to , as John articulated , to grow the business .
Rick Westenberg: So we are cautiously optimistic that we can improve upon that, particularly as we move going forward, and really set ourselves up to capitalize on our growth initiatives and to capitalize when the industry does return to growth, both from a volume and a price perspective.
Speaker #6: And so we are cautiously optimistic that we can improve upon that , particularly as we move as we move , plumbing going forward .
Speaker #6: And really set ourselves up to capitalize on growth in our initiatives and capitalize on the industry. Does return to growth, both from a volume and a price perspective—
Mike Dahl: Okay, got it. That's helpful, Rick. And then, I guess, somewhat similar, but shifting to decor, you know, volumes were really down all year. They've been down for a couple of years, and even adjusting for the one-timers. So in terms of just the level of confidence or conviction getting to flat for this year, when it doesn't sound like you're assuming anything heroic from existing home sales, just give us a little more insight into what you've seen in recent trends or the conversations you've had that give you that confidence that we'll, we'll improve back to flat.
Speaker #15: Okay . Got it . Rick . That's helpful . And then I guess somewhat similar , but shifting to Derkach , you know , volumes were really down all year .
John Nudi: Yeah, so maybe I'll start and Rick can add on as well. You know, obviously, with markets that aren't growing historical rates, you know, we wanna take action and make sure that we have the cost structure that's needed for today and into the future. So the actions are broad. So again, Liberty would obviously be a part of it, something that we pointed out. But we're really looking across our organization just to make sure we have the right footprint in terms of manufacturing base, make sure that we're leveraging our scale where it makes sense.
Speaker #15: They've been down for a couple of years on an even adjusting for the one timers . So in terms of just the level of confidence or conviction , getting to flat for this year when it doesn't sound like you're assuming anything heroic from existing home sales , just give us a little more insight into what you've seen in recent trends or the conversations you've had that that give you that confidence , that will improve back to flat .
John Nudi: Yeah, this is John, Mike. And I think I think 2025 had a lot of challenging comps, you know, with the inventory build at the end of 2024, the exclusivity on primer and applicators. So the comps certainly become more favorable. So that's one thing that's real. I would say in addition to that, I think focusing on what we can control. And from our side, we can, you know, focus on building our brand and really communicating the message that we've got the best quality and the best value in the category. I think particularly in this environment, the value messaging is something that can be compelling, so we're going to step that up.
John Nudi: And the idea is to take those dollars, you know, drop similar to the bottom line as we've guided. Again, we wanna grow margins in 2026 and into the future.
Speaker #7: Yeah , this is this is John . Mike . I mean , I think I think 20 , 25 had a lot of challenging comps , you know , with the inventory build at the end of 2024 , the exclusivity on primer and comps applicators .
John Nudi: And importantly, we wanna free up, differential amount of dollars that we can reinvest, back into creating capabilities. And we won't go into a lot of detail today, but at our main Investor Day, we'll really detail the capabilities that we're building to not only help us drive the bottom line, so things like, leveraging our scale with shared services and global purchasing, but importantly, creating capabilities that will drive our top line even faster. So things like e-commerce and digital marketing, brand building and consumer insights, and then finally, really accelerating innovation. So, again, I'll let Rick touch a little bit on the dimensions of, of this year and into the future. But, but just know that this is an area that we'll continue to focus on.
Speaker #7: the So certainly become more real . one thing that's So that's I would say in addition to that , I think focusing can control and from our side , we can focus on building our brand and really communicating the message that we've got the best quality and the best value in the category .
John Nudi: I can also tell you that we are very aligned with The Home Depot in terms of our strategies and really making sure that we get every bit of growth we can out of 2026. So as we talked, we don't think the market's going to necessarily spring back to historical growth levels in 2026, but we feel good that we're gonna, you know, execute at a high level and certainly see, you know, some better trends just because the comps are a bit easier for us in 2026 as well.
Speaker #7: I think particularly in this environment , the value messaging is something that can be compelling . So we're going that up . to step I can you that we are very aligned with with The Home Depot in terms of our strategies and and really making sure that we get every bit of growth we can out of 2026 .
Speaker #7: So as we talked , we don't think the market's on what we going to necessarily spring back to historical growth levels in 2026 .
John Nudi: We're gonna continue to drive hard from a cost standpoint, just because we do wanna keep growing our margins and keep investing in our capabilities as well.
Speaker #7: But we feel good that we're going to execute at level . a high And certainly see , you know , better some trends just the because comps are a bit easier for us in 2026 as well .
Mike Dahl: Got it. Okay. Thanks, John.
Rick Westenberg: Yeah, Mike, with regards to restructuring and timing, as we indicated in our prepared remarks, we took a charge of about $18 million in Q4 2025, and we expect about $50 million of charges here in 2026. So we've embarked on restructuring actions, and we were highlighting this for a couple of reasons. One is because it's more significant than Masco has done in the recent past in terms of the extent of restructuring, all for the reasons that John mentioned in terms of the overall market dynamics, volume, et cetera. In terms of the and it's broad-based
John Nudi: Thank you.
Operator: Your last question today comes from Philip Ng of Jefferies. Please go ahead.
Speaker #15: Got it . Okay . Thanks ,
Speaker #8: Thank John . you .
Philip Ng: Hey, guys. Thanks for squeezing me in. John, I think you mentioned on your pro paint business with your partnership with The Home Depot, perhaps you're doing a trial on trade credits. Any more color on that? Is that going to be pretty broad-based, and we could see an uplift this year, or is that more of a 2027 opportunity? And with that partner growing in that pro side of things more broadly, do you see that as an opportunity this year?
Speaker #4: Your last question today
Speaker #4: from Phil Ng Jefferies . go of Please ahead .
Speaker #16: guys . for Hey Thanks also tell in , John . I think you mentioned on propane your business with your partnership with the Home Depot .
Speaker #16: Perhaps doing a trial you're trade credits on . Any more color Is that on that ? going to be pretty broad based ? And we could see an uplift this year , or is that more of a 2027 opportunity ?
Rick Westenberg: in nature, I would say in terms of benefits, those restructuring actions are gonna take hold as we move through 2026. They're contemplated within our guidance, and we do have some margin expansion contemplated in our guidance for 2026.
John Nudi: Yeah, I guess what I would say is, we do believe that trade credit is an important unlock with the pro customer. And at the same time, I would say, you know, this initiative is really being driven by The Home Depot, and I don't want to speak for them, so I know they will be talking more about this. They have talked about trade credit in the past, and I think they believe it's a big unlock as well. So I'll let them comment on just how widespread this is, but I know for a fact that they believe it's meaningful and something that they're very committed to growing over time.
Speaker #16: And with that in partner growing that pro side of things more broadly , do you see that as an opportunity this year ?
Speaker #7: Yeah , I guess what I would say is we do believe that trade credits are an important unlock with the pro customer . And at the same time , I would say , you know , this initiative is really being driven by the Home Depot .
Rick Westenberg: But the full benefit will be realized as we get into 2027 and 2028. And as John indicated, we'll provide more visibility in terms of our margin expectations as we get into our discussion at Investor Day in May.
Speaker #7: And I don't want to speak for them . So I know they're we'll be talking more about this . They have talked about trade credit in the past , think they believe it's a big unlock as well .
Michael Rehaut: Okay. No, appreciate that. I guess secondly, just to follow up on the earlier question around raw materials and, and where copper, copper prices are today. You said, obviously, that, you know, your '26 guide contemplates or reflect, you know, that you're aware of what's going on in the markets. I just, you know, a little just for a little clarity's sake, does that imply that, you know, if copper prices today if copper prices of today were to hold, that would be, in effect, a neutral impact on, let's say, the second half of the year because there is a lag?
Speaker #7: So I'll let comment on on just them how widespread and I this is . But but I know that fact that for a they believe meaningful and it's it's something that they're committed to , growing over to time .
Philip Ng: Okay. Gotcha. And then you commented about some of the momentum you saw in plumbing in 25 with share gains. I think it was on the e-com side in retail. Anything to flag when we look at 2026, any new placement in higher those channels or the wholesale channel as well on the plumbing side?
Speaker #16: Gotcha then you . And commented about of the some momentum Okay . you saw in plumbing in 25 , with share gains . I think it was e-commerce side .
Speaker #16: And retail to flag . , anything When we look the 2026 , any at new placement in those channels or the wholesale On the channel as well .
John Nudi: Yeah. So I would say, you know, we obviously have good visibility into particularly our retail sets and our plans for the year, and we feel like we're going to have a really nice year in North America at retail. We've had a really incredible momentum in e-commerce over a longer arc of time, particularly led by our Delta business, you know, growing nicely, I mean, above certainly our overall average, and we feel good about the plans we have in place there as well. And look, at the end of the day, our wholesale channel remains very, very important for us, and we've got deep relationships that go back many years.
Speaker #16: plumbing side ?
Speaker #7: say ,
Speaker #7: you know , Yeah would obviously have . So so I good visibility into particularly our retail sets and our plans for we feel like the year .
Speaker #7: we're going to have a year really nice And in North America at retail a really . We've had incredible momentum in e-commerce over , longer over time , particularly led by our Delta business .
Michael Rehaut: Or would there need to be some additional adjustments taken to make sure that you can, you know, achieve the, the guidance that, that you've laid out?
Rick Westenberg: Yeah, Mike, without giving you a specific figure in terms of what we've pegged our plan at, what I can say is we have contemplated elevated copper prices. We haven't contemplated copper prices at the levels that they've reached in the recent past, like above $6 per pound from a COMEX perspective. But that's something that we continue to monitor. We do have, as I mentioned earlier, to Matt's question, a bit of a delay with regards to when it impacts our P&L.
Speaker #7: know , growing even above certainly You our nicely feel good about the average . And we plans we have in place overall there as well .
John Nudi: So, you know, as we've talked about this new executive committee getting closer to the business, I can tell you we review all of these key, you know, indicators on a, on a weekly basis and feel really good about the plans we have in place from a, from a plumbing standpoint. So I feel very good that we're going to have another nice year from a share standpoint in North America. And Hansgrohe, I mean, we had nice strength as well in some challenged markets, particularly in China, and believe we have plans in place to turn that. The last thing I would hit on North America, the area that's really growing the fastest is the upper premium and luxury segment of the category.
Speaker #7: , at the end of the our channel And look remains day , very , wholesale very And we've got deep important for us .
Speaker #7: relationships that many So years . go back , you talked about this know , as new executive getting closer to the committee business , I can tell you all of review key these , you know weekly , indicators on a on a basis plans we really good place a plumbing from from have in standpoint .
Speaker #7: about the So and feel I feel good that we're very going to have year standpoint in share America from a another nice North .
Rick Westenberg: So it does give us the opportunity to respond, whether it's through further cost actions or pricing, to mitigate those impacts. And so that's something that we continue to monitor, and we've demonstrated the ability to offset these types of headwinds in the past.
Speaker #7: in Hansgrohe . I mean , And nice we had strength as well , and some challenged markets , China . And particularly I believe we have place to plans in turn that .
Rick Westenberg: And so it may not be one for one from a timing perspective, and there might be both risk and upside relative to our the copper assumption. But we do, we do monitor it very closely, and we do take action accordingly.
Speaker #7: last thing I would hit on North that's area really growing America , the The fastest , is the premium and upper luxury segment of of the category .
John Nudi: And we have great brands with Brizo and Newport Brass and AXOR, and those are our fastest growing brands, whether it's in the United States or outside the US. They tend to be our highest margin brands, and we really like that space. In the US alone, it's over $100 million or over $1 billion in terms of a segment. So we like the momentum on our plumbing business, both in North America and around the world.
Speaker #7: we have great brands with Brizo and Brass and , and Axor Newport And those are growing our fastest the brands . States or United the outside US , they tend to be Whether it's in our highest brands margin like , and that US we really alone , it's over 100 million over in $1 billion in or terms of a we like the segment .
John Nudi: Yeah, I would just say, Mike, look, it's one of many risks and opportunities that we continue to look at. So I, I would say we feel good about where the call is today. If, if it moves materially, we'll, we'll take actions to make sure we mitigate it.
Philip Ng: Okay. Thank you. Appreciate the call.
John Nudi: Thank you.
Michael Rehaut: Great. Thanks so much.
Speaker #7: plumbing momentum on our both in North around the America and world So business , .
Operator: This time, we will now turn the call back over to Robin Zondervan. Please continue.
Speaker #16: Okay . Thank you . I
Speaker #16: appreciate the color .
Operator: Your next call comes from Susan Maklari of Goldman Sachs. Please go ahead.
Robin Zondervan: We'd like to thank all of you for joining us on the call this morning and for your interest in Masco. That concludes today's call. Have a wonderful day.
Speaker #4: This time we Thank you the call . to back over will now turn Robin Zondervan . Please continue .
Susan Maklari: Thank you. Good morning, everyone.
John Nudi: Good morning.
Speaker #17: like to thank all of you We'd joining us on for the call this morning , and for your Masco concludes . That today's call .
Susan Maklari: Good morning. Building on your recent comments to Mike's questions, can you talk a bit about the executive committee that you formed there, some of the initiatives that you're gonna be really focused on as you think about driving that growth, and anything specific that we should be focused on for 2026 as it relates to that?
Speaker #17: interest in Have a day wonderful .
Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.
John Nudi: Yeah, Sue, this is John. I'm happy to take that question. I'm excited about the new executive committee, and really, it was designed to do two things: One, allow us to get closer to the business. As, as we all know, the world's moving faster than ever before, including our consumers and customers, and we wanted to bring our four big BU leaders onto the senior team of the company. That's the first time we've done that at Masco. Their businesses make up more than 80% of our total business, and we meet at least weekly.
John Nudi: We talk about what's working, what's not, where there's challenges, and we're flowing resources to those challenges more quickly than we have in the past. And again, just being really in touch with the business is what we're shooting for.
John Nudi: In addition to that, Behr is now reporting directly to me, as you know, they deal with our largest customer. I think that helps with decision-making. It helps me be really in tune with what's happening on that important business, as well as with our most important and largest customer as well. In addition to that, the goal is to leverage our scale better. Masco has a long history of driving a lot of success. We've done that in a very decentralized way. And what I would say is, I don't plan to centralize this company. That's not the goal at all. But the goal is to really leverage our scale where it makes sense. And to do that, we need to make sure that we do it in a smart way.
John Nudi: So as we build these strategies to leverage our scale, having the business unit leaders be a part of the strategy of development, and then obviously, the execution as we go to market and deploy these capabilities, things that I talked about, like digital marketing, e-commerce, and brand building, consumer insights, and innovation. Having them to be a part of the development, I think, is really important. So our goal is to keep doing what we've done historically from a margin standpoint, keep driving margins, but probably grow a bit more quickly on the top line. And bringing this growth mindset to Behr is what we're trying to do as an executive committee.
Susan Maklari: Yeah. Okay, that's great color. And then turning to the cash flow side of the business, you guided for working capital to come down a bit to 16.5% of sales this year. Can you talk about the path of getting there, further potential upside to that as, as conditions perhaps normalize? And then how we should be thinking about what that means for overall cash generation and the uses of that cash?
Rick Westenberg: Sure, Sue, it's Rick. So with regards to working capital, as you may recall, and I believe I mentioned this in my prepared remarks as well, 2025 working capital was adversely impacted by the tariff dynamic, and what I mean by that is a couple of folds. One is, as cost bled into our inventory and as pricing bled into our receivables, that inflated our working capital ratios. Also, from a payment timing perspective, tariffs are due on shorter payment terms than our regular vendor payables, and so that shortened our payable days as well.
Rick Westenberg: And so those impacts took hold in 2025 and were adverse impact in terms of our working capital dynamic. In 2026, we expect more of a return to normalization.
Rick Westenberg: There'll be some residual implications, of course, for the tariffs, but 16.5% is more where we've run historically, and so that's more of a normalization, I would call it, with regards to our working capital. From an overall cash allocation perspective, our capital allocation framework, as you know, has not changed, and we're consistently deploying capital as we've done in the past. And that's, number one, first and foremost, investing in the business, and we guided to an expectation of approximately $190 million of capital expenditures in 2026. Second is an investment-grade credit rating, which we have, you know, securely in place.
Rick Westenberg: Third is a relevant dividend, and as John and I both mentioned, we got support from the board to increase our dividend 3% to $1.28 per share for 2026. And then all available cash that we don't deploy to capital investments or to the dividend are available for share buybacks or M&A activity. And we indicated our expectation is that number would be about $600 million for 2026.
Susan Maklari: Okay. Thanks for the color, and good luck with the quarter.
Rick Westenberg: Great. Thanks, Sue.
John Nudi: Thanks, Sue.
Operator: Your next question comes from John Lovallo of UBS. Please go ahead.
John Lovallo: Good morning, guys. Thanks for taking my questions as well here. The first one, just on Liberty Hardware. It looks like the operating margin was kind of mid to high single digits in 2025, and I'm sure that was impacted by tariffs, but that compares to sort of 16 to 17% in 2024. So I guess the question is, you know, what are your expectations for Liberty Hardware margin embedded in the plumbing outlook? And can you remind us why this business is still considered core?
Rick Westenberg: Sure, John, it's Rick. So we typically do not comment on individual business unit performance, but obviously, with the shift of Liberty Hardware from our decorative architectural segment to our plumbing segment, it creates a bit more visibility. And as you noted, our margins were adversely impacted in 2025. And that's really, I would say, primarily driven by a couple things. The volumes were a bit challenged, but really even more than that, from a profit margin perspective, we were hit significantly by tariff and the glass anti-dumping duties.
Rick Westenberg: And just as a reminder, the glass anti-dumping duties impact our shower door sourcing, and that was at a rate of 323%.
Rick Westenberg: So needless to say, the team has been proactively working to mitigate and change our sourcing footprint to address that duty impact, and we're making good progress on that, and that will be something that we mitigate over the course of 2026. As it pertains to Liberty overall, Liberty is a core part of our business. As John noted in his comments, over half of the sales of Liberty are branded Delta. There's a great product complement, portfolio complement that Liberty possesses in terms of kitchen and bath hardware and shower doors, that we're really excited will be even more successful when we integrate it into Delta in 2026.
John Lovallo: Got it. And then on the paint sales side, I think you guys talked about paint being down 15%, but you called out a couple sort of one-time items, if you will, the inventory timing and the customer transition of primer and applicator businesses. Can you just help sort of break out the impact of each of those two factors in that number?
Rick Westenberg: Sure, John. So you're right. I identified a couple of items that provided a bit of impact in Q4. What I would say is not new news is the inventory channel build in Q4 of 2024 that we experienced, and we had flagged as a favorable impact in Q4 of 2024, and an unfavorable comparison as we look at Q4 of 2025. That had about a mid-single-digit impact in terms of our volume and sales for the business on a year-over-year basis. And then with regards to the transition of the primer and applicator business from one of our customers, that had about a
Rick Westenberg: single digit impact in terms of sales in the quarter.
Rick Westenberg: So we thought it was appropriate to adjust those out as it pertains to providing a more representative picture of our performance during the quarter. Our performance during the quarter, quite frankly, when you strip out some of those impacts, is in line with what we saw through the course of the calendar year 2025, which was down high single digits in terms of DIY and up low single digits in terms of pro. We expect, as John have articulated, an improvement in that trend rate as we move into 2026, in terms of overall paint sales being roughly flat year-over-year, with DIY down mid-single digits, and pro up mid-single digits.
John Lovallo: Got it. Thank you, guys.
Rick Westenberg: Sure, John.
John Nudi: Thanks, John.
Operator: Your next question comes from Sam Reid of Wells Fargo. Please go ahead.
Sam Reid: Thanks, everyone. Just wanted to circle back on the mid-single-digit plumbing pricing for 2026. If you could just disaggregate in your outlook between wholesale and retail channel pricing. Would just love some perspective on how potentially those retail conversations are going, and also just how you might be managing price gaps that might be evolving between wholesale and retail and plumbing.
John Nudi: Yeah, Sam, this is John. I'll take a crack at this. So, you know, I would say, in terms of pricing and plumbing, we feel good about, you know, where we are today and the conversations we have with customers are being, you know, constructive. As you can imagine, customers don't love pricing no matter the environment, so we always have to give good justification for it, and we're working through that as we speak right now. We won't get into, you know, channel by channel.
John Nudi: It's just not something that we really guide to, but I can tell you that we're putting some good discipline in place in terms of our strategic revenue management approach, and that means just having strategies by channel, making sure that we have, you know, a good idea of price elasticity and where we stand versus our competitors. And I think at the end of the day, what you really want to do is keep growing your business while you take price, and clearly, we're doing that. We're growing nicely. We're growing share in the category. Part of that is just being competitive, which we believe we are, and it's also about building your brands and about innovating.
John Nudi: So we feel good about where we are from a, you know, pricing standpoint for sure, but more importantly, just a business standpoint, particularly on our plumbing business in North America. Our Delta team, I think, did a fantastic job in 2025, navigating an incredible number of headwinds, and we really like where we stand today.
Sam Reid: ... That helps. And maybe switching gears to paint. I believe in the prepared remarks, one of you mentioned a job site delivery as being a lever for the paint business. I would just love to understand how widespread job site delivery is today, perhaps the runway, and then any color on who's paying for some of the outside, trade representatives. Is that being split with Home Depot, or are you bearing those costs on the paint business? Thanks.
John Nudi: Yeah, absolutely. So in terms of order online and deliver the job site, it's something that's expanding. We started in our big markets where there's density of stores, because we, in many cases, set up micro distribution sites that help with that distribution. So we think that there's plenty of runway left there. I won't give you a percentage, but again, I think it's early to mid-innings on that ability to take friction out of the system for pros. So, more to come there. And the second part of the question was?
Sam Reid: Just on the economics of your outside-
John Nudi: Oh, yeah.
Sam Reid: Representatives.
John Nudi: Yeah, I would say, again, without getting into a whole lot of detail, I would say it's a true partnership, one that goes back 43 years with the Home Depot. In terms of how we get after this, it's some of it's joint, some of it's, you know, we invest. I would say it really depends on the initiative. You know, we like this business a lot. We're not talking about, you know, certainly, we're talking about 2026 and what we have to do to bend the curve. Importantly, we're talking much longer in terms of the horizon, what kind of investments we need to make ourselves,
John Nudi: what kind of investments we're gonna make jointly, to really grow this business into the future.
John Nudi: And I, I've been incredibly impressed with the relationship that's developed over obviously a long period, and importantly, just the candor back and forth in terms of what's working, what's not. And I have a lot of confidence that we're gonna get to a better place on paint, starting in 2026, and then really accelerate from there. And, you know, the last thing I would mention is we made, you know, some leadership changes at Behr over the course of the last few months as well, and really pleased with the focus and the attention and what's happening at that BU at this point. So, I'll leave it at that. Thanks. Thanks, Sam.
Sam Reid: Thanks, guys.
Operator: Your next question comes from Trevor Allinson of Wolfe Research. Please go ahead.
Trevor Allinson: Hi, good morning. Thank you for taking my questions. Another question on Deckers here. Margins came in a little weaker than what you were expecting in the quarter. Was that primarily volume related or drove the weaker margins? And then just given the lower starting point, as we exit 2025, how should we think about the cadence of Deckers margins throughout the year in 2026?
Rick Westenberg: Yeah, Trevor, it's Rick. So in terms of the operating profit margin implications in Q4, it was impacted by really a couple factors. One is volume. And as we articulated, there were a couple of impacts that we highlighted in Q4. Obviously, the Q4 2024 higher inventory in our channel, and then the customer transition in Q4 2025, and then just the overall market dynamics. So volume, for a number of reasons, was impacted. And then in 2025, just as a reminder, Liberty Hardware is still part of that segment, and that was adversely impacted, as
Rick Westenberg: we talked about, by significant tariff in the 323% class antidumping duties. And so that weighed heavily with regards to operating profit margins.
Rick Westenberg: Now, we've been taking price, and we've been doing mitigating actions, but those take time to take hold, and so there's an implication there in the near term as it pertains to the operating profit margin. As we roll into 2026, obviously, you have to take into account the fact that we are shifting Liberty from our decorative architectural segment to our plumbing segment. We provided a breakdown from a quarterly cadence for 2025 on a recast basis in the appendix of our earnings deck, so I'd refer you to that, and we can certainly address questions as a follow-up. But I would say that would help, I think, provide visibility in terms of our cadence for our recast segment for decorative architectural, at least in 2025.
Rick Westenberg: And outside of the impacts that we just highlighted for Q4 in particular, I would say there's nothing that I would note at this point for 2026.
Trevor Allinson: Okay. Okay, makes sense. Thank you for that. And then you've talked about your expectations overall for the market in 2026. Can you talk about how you think Watkins performs relative to your overall plumbing portfolio, this year? And then can you remind us roughly the size of that business as you exit 2025? Thanks.
John Nudi: Yeah, I'll take a crack at that. So, you know, we typically don't break out BUs within a segment. So, but what I would say is, you know, we really like the space that Watkins plays. Wellness is very much on trend, obviously, from a consumer standpoint. You look at the categories at play, spas and hot tubs only have 5 or 6% penetration in North America. We're the sure leader. We have two of the major, you know, premium brands in the space, in Caldera and Hot Springs.
John Nudi: And then saunas are kind of a phenomenon right now. It's only 1% household penetration.
John Nudi: If you look at pop culture at all, it's amazing how much people are talking about saunas and the benefits that come with them. So, look, it's been a bit of a mixed market over the last few years. They are bigger ticket purchases. We're exiting the year with momentum from 2025, and we feel good about our opportunities to grow, and, you know, at least in line with the plumbing segment in 2026, and probably grow even faster as we look forward, just given how much upside there is and how much on trend our products are.
Trevor Allinson: Thank you for all the color. Good luck moving forward.
John Nudi: Thank you.
Rick Westenberg: Thanks, Trevor.
John Nudi: Thanks, Trevor.
Operator: Next question is from Mike Dahl of RBC Capital Markets. Please go ahead.
Mike Dahl: ... Morning. Thanks for taking my questions. First one, just to drill down into the plumbing guide one more time. I think if you're up low single digits with mid-single digit price, so you're implying volumes down low singles. I think you ended up the year with volumes kind of closer to flat in plumbing. So can you just kind of dive into that a little bit more in terms of changes in your volume expectations versus what you've seen in recent trends in plumbing?
Rick Westenberg: Sure, Mike, it's Rick. In your dissection of our 2026 guide is accurate. We are guiding in terms of our plumbing volumes to be down low single digits that are partially offsetting the mid-single digit pricing. We expect overall plumbing sales to be up low single digits in 2026. As we looked back on 2025 in terms of our performance, we saw some of that pricing take hold in the latter part of the year, but from a volume perspective, we were down, depending on the period, 1 to 2%, from an overall plumbing volume standpoint.
Rick Westenberg: So effectively, we're seeing more of a continuation from a volume perspective in that same ZIP code. Obviously, we're investing in many areas to, as John articulated, grow the business.
Rick Westenberg: So we are cautiously optimistic that we can improve upon that, particularly as we move going forward, and really set ourselves up to capitalize on our growth initiatives and to capitalize when the industry does return to growth, both from a volume and a price perspective.
Mike Dahl: Okay, got it. That's helpful, Rick. And then, I guess, somewhat similar, but shifting to decor, you know, volumes were really down all year. They've been down for a couple of years, and even adjusting for the one-timers. So in terms of just the level of confidence or conviction getting to flat for this year, when it doesn't sound like you're assuming anything heroic from existing home sales, just give us a little more insight into what you've seen in recent trends or the conversations you've had that give you that confidence that we'll, we'll improve back to flat.
John Nudi: Yeah, this is John, Mike. And I think I think 2025 had a lot of challenging comps, you know, with the inventory build at the end of 2024, the exclusivity on primer and applicators. So the comps certainly become more favorable. So that's one thing that's real. I would say in addition to that, I think focusing on what we can control. And from our side, we can, you know, focus on building our brand and really communicating the message that we've got the best quality and the best value in the category.
John Nudi: I think particularly in this environment, the value messaging is something that can be compelling, so we're going to step that up.
John Nudi: I can also tell you that we are very aligned with The Home Depot in terms of our strategies and really making sure that we get every bit of growth we can out of 2026. So as we talked, we don't think the market's going to necessarily spring back to historical growth levels in 2026, but we feel good that we're gonna, you know, execute at a high level and certainly see, you know, some better trends just because the comps are a bit easier for us in 2026 as well.
Mike Dahl: Got it. Okay. Thanks, John.
John Nudi: Thank you.
Operator: Your last question today comes from Philip Ng of Jefferies. Please go ahead.
Philip Ng: Hey, guys. Thanks for squeezing me in. John, I think you mentioned on your pro paint business with your partnership with The Home Depot, perhaps you're doing a trial on trade credits. Any more color on that? Is that going to be pretty broad-based, and we could see an uplift this year, or is that more of a 2027 opportunity? And with that partner growing in that pro side of things more broadly, do you see that as an opportunity this year?
John Nudi: Yeah, I guess what I would say is, we do believe that trade credit is an important unlock with the pro customer. And at the same time, I would say, you know, this initiative is really being driven by The Home Depot, and I don't want to speak for them, so I know they will be talking more about this. They have talked about trade credit in the past, and I think they believe it's a big unlock as well. So I'll let them comment on just how widespread this is, but I know for a fact that they believe it's meaningful and something that they're very committed to growing
John Nudi: over time.
Philip Ng: Okay. Gotcha. And then you commented about some of the momentum you saw in plumbing in 25 with share gains. I think it was on the e-com side in retail. Anything to flag when we look at 2026, any new placement in higher those channels or the wholesale channel as well on the plumbing side?
John Nudi: Yeah. So I would say, you know, we obviously have good visibility into particularly our retail sets and our plans for the year, and we feel like we're going to have a really nice year in North America at retail. We've had a really incredible momentum in e-commerce over a longer arc of time, particularly led by our Delta business, you know, growing nicely, I mean, above certainly our overall average, and we feel good about the plans we have in place there as well. And look, at the end of the day, our wholesale channel remains very, very important for us,
John Nudi: and we've got deep relationships that go back many years.
John Nudi: So, you know, as we've talked about this new executive committee getting closer to the business, I can tell you we review all of these key, you know, indicators on a, on a weekly basis and feel really good about the plans we have in place from a, from a plumbing standpoint. So I feel very good that we're going to have another nice year from a share standpoint in North America. And Hansgrohe, I mean, we had nice strength as well in some challenged markets, particularly in China, and believe we have plans in place to turn that. The last thing I would hit on North America, the area that's really growing the fastest is the upper premium and luxury segment of the category.
John Nudi: And we have great brands with Brizo and Newport Brass and AXOR, and those are our fastest growing brands, whether it's in the United States or outside the US. They tend to be our highest margin brands, and we really like that space. In the US alone, it's over $100 million or over $1 billion in terms of a segment. So we like the momentum on our plumbing business, both in North America and around the world.
Philip Ng: Okay. Thank you. Appreciate the call.
John Nudi: Thank you.
Operator: This time, we will now turn the call back over to Robin Zondervan. Please continue.
Robin Zondervan: We'd like to thank all of you for joining us on the call this morning and for your interest in Masco. That concludes today's call. Have a wonderful day.
Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.
