Susan McClary

Susan McClary asked about the drivers and sustainability of Delta Faucet's strength in e-commerce and wholesale, and what this could mean for plumbing segment volume and price mix in 2026 if the macro environment remains tough. She also inquired about the timing of the increased capital allocation for share repurchases or acquisitions and the current M&A environment.

Answer

Jon Nudi, President and CEO, attributed Delta's strength to brand building, innovation (25% vitality rate), and strong e-commerce capabilities, expecting this momentum to continue into 2026. Rick Westenberg, VP and CFO, explained that the increased capital allocation (from $450M to $500M) was due to a favorable cash tax benefit, with approximately $150M remaining for Q4. He reiterated the focus on bolt-on M&A opportunities, noting that any unutilized cash would be deployed for share repurchases.

Susan McClary asked about the drivers of Delta Faucet's strength in e-commerce and wholesale, its sustainability, and implications for plumbing volume/price mix in 2026. She also inquired about the timing of the increased capital allocation for shareholder returns and observations on the M&A environment.

Answer

President and CEO Jon Nudi attributed Delta's strength to brand building, innovation (25% vitality rate), and strong e-commerce capabilities, expecting this momentum to continue into 2026. VP and CFO Rick Westenberg stated the increased capital allocation ($50 million) was due to a favorable cash tax benefit, with about $150 million remaining for Q4. He reiterated the focus on bolt-on M&A opportunities and using cash for share repurchases if no M&A occurs.