McClaran Hayes

McClaran Hayes inquired about MasterBrand's full-year market outlook for 2026, seeking a breakdown by end channel, specifically comparing assumptions for the builder market versus home improvement. Hayes also asked for an explanation of the sequential deceleration in price realization from Q3 to Q4, differentiating between channel headwinds from weaker builder sales and increased promotional or competitive behavior.

Answer

President and CEO Dave Banyard indicated that both the builder and R&R (retail) markets are expected to be down mid-single digits in 2026, with the builder market potentially starting weaker but catching up due to easier comps. He attributed the Q4 pricing deceleration primarily to a mix shift towards lower opening price point offerings and the ongoing challenge of capturing price to mitigate tariffs, noting that overall volume and trade-down behavior were the larger impacts on Q4 results.

McClaran Hayes asked about MasterBrand's full-year market outlook for 2026, specifically requesting a breakdown by end channel, comparing assumptions for the builder market versus home improvement/R&R.

Answer

Dave Banyard, President and CEO of MasterBrand, indicated that both the builder and R&R markets are expected to be down mid-single digits, with the builder market potentially starting worse but catching up due to easier comps. He noted that the R&R market is anticipated to be consistently down mid-single digits throughout the year, emphasizing that the spring season's performance will be crucial for the full-year outcome.

McClaran Hayes of Zelman Partners LLC asked for details on the phasing of the $90 million in cost synergies, an update on the Supreme integration synergy target, and commentary on recent demand trends and the Q3 outlook.

Answer

MasterBrand President & CEO Dave Banyard stated the synergy phasing will be similar to the Supreme integration, with easier items like supply chain consolidation addressed first. He confirmed the Supreme integration is on track, with North Carolina plant consolidations largely complete. Regarding demand, Banyard noted steady Q2 new construction demand but expects softness ahead due to lower housing starts, while describing the repair and remodel market as consistently choppy. American Woodmark President & CEO Scott Culbreth concurred, noting R&R is 'bouncing at the bottom' and new construction weakened in their recent quarter.

McClaran Hayes of Zelman Partners LLC asked for details on the phasing of the $90 million in cost synergies, an update on the Supreme integration synergy realization, and commentary on recent demand trends and pre-buy activity.

Answer

Dave Banyard, President & CEO of MasterBrand, stated that the synergy phasing will be similar to the Supreme integration, with easier items like supply chain consolidation addressed first. He confirmed the Supreme integration is on track, with North Carolina plant consolidations largely complete. Regarding demand, Banyard noted steady Q2 new construction demand but anticipates softness ahead due to lower housing starts. Scott Culbreth, President & CEO of American Woodmark, added that the repair and remodel market has been "bouncing at the bottom," while new construction weakened in their recent quarter.

McClaran Hayes from Zelman Partners inquired about the phasing of the $90 million in cost synergies, the progress on the Supreme acquisition's synergy target, and current demand trends for Q3 after potential pre-buy activity.

Answer

MasterBrand's President & CEO, Dave Banyard, stated the synergy phasing will be similar to the Supreme integration, with easier items addressed first. He confirmed the Supreme synergy plan is on track, with North Carolina plant consolidations largely complete. Regarding demand, Banyard noted new construction is softening while repair and remodel remains choppy. American Woodmark's CEO, Scott Culbreth, added that R&R is 'bouncing at the bottom' and new construction weakened in their recent quarter.

McClaran Hayes of Zelman Partners asked for the expected phasing of the $90 million in cost synergies, the current progress on the Supreme acquisition's synergy targets, and recent demand trends, including any pre-buy activity.

Answer

MasterBrand CEO Dave Banyard stated the synergy phasing will mirror the Supreme integration, with early wins from supply chain consolidation. He confirmed the Supreme integration is on track, with North Carolina plant consolidations nearly complete. Regarding demand, Banyard noted steady Q2 new construction but anticipates future softness, while American Woodmark CEO Scott Culbreth described the repair and remodel market as "bouncing at the bottom."

McClaran Hayes questioned how the lower annualized tariff forecast has affected the company's strategy for cost-out actions and investments, and also asked for an update on the business environment in China for the Water segment.

Answer

CEO Nicholas Fink explained that while the financial models are updated daily, the core strategy remains unchanged: building a resilient, regionalized North American supply chain. He emphasized this is a long-term strategic goal beyond tactical tariff mitigation. Regarding China, Fink noted a market slowdown in Q1 due to tariff uncertainty impacting the developer business, but highlighted growth in the showroom and designer channels. He stated the China team has managed costs well, minimizing EPS risk, and the goal is to find the bottom of the developer channel and return to growth.