Trevor Allison

Trevor Allison asked about the input cost inflation rates observed in the plumbing business during Q3 and expectations for Q4, specifically mentioning metals. He also inquired about the DIY paint market, asking where Masco stands in terms of pull-forward versus deferral and if the category can return to growth in fiscal 2026 after several years of declines.

Answer

Rick Westenberg, VP and CFO, stated that Q3 plumbing input cost inflation was low single-digit, primarily driven by copper, with similar low single-digit inflation expected for the full year. Jon Nudi, President and CEO, linked DIY paint softness to near three-decade lows in existing home sales, but expressed confidence in long-term fundamentals. He highlighted the significant opportunity in the pro-paint business, which is approaching 50% of Behr's business, and the potential for DIY paint to improve as existing home sales recover.

Trevor Allison asked about the input cost inflation rates in the plumbing business for Q3 and Q4, particularly for metals like copper, and inquired about the state of the DIY paint market regarding pull-forward versus deferral, and its potential for growth in fiscal 2026.

Answer

VP and CFO Rick Westenberg reported a low single-digit inflationary impact in Q3 for plumbing, mainly due to copper, expecting similar for the full year. President and CEO Jon Nudi linked DIY paint softness to low existing home sales, expecting long-term fundamentals to improve with consumer confidence and interest rates. He also highlighted the significant growth opportunity in the pro-paint business.

Trevor Allison of Wolfe Research LLC inquired about the absorption rates of newly opened communities and the expected cadence of community count growth for the remainder of 2025 and into 2026.

Answer

CEO Phillippe Lord confirmed that the 50 new communities opened in Q2 met expectations, contributing to the strong 4.3 net sales per month pace. He projected that community count growth would be evenly distributed in Q3 and Q4, leading to double-digit growth for 2025, with similar growth anticipated for 2026. EVP & CFO Hilla Sferruzza clarified this growth would be between 10% and 20%.