| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Plumbing Products    | N/A     | **1,222**  **[0000062996-23-000014_mas-20230331.htm:10]**  | N/A     | **1,191**  **[0000062996-23-000042_mas-20230930.htm:15]**  | N/A     | **1,192**  **[0000062996-24-000012_mas-20240331.htm:5]**  | **1,253**  **[0000062996-24-000027_mas-20240630.htm:15]**  | **1,219**  **[0000062996-24-000033_mas-20240930.htm:15]**  |
| Decorative Architectural Products | N/A | **757**  **[0000062996-23-000014_mas-20230331.htm:10]**  | N/A | **788**  **[0000062996-23-000042_mas-20230930.htm:15]**  | N/A | **734**  **[0000062996-24-000012_mas-20240331.htm:5]**  | **838**  **[0000062996-24-000027_mas-20240630.htm:15]**  | **764**  **[0000062996-24-000033_mas-20240930.htm:15]**  |
| Total Revenue        | N/A     | **1,979**  **[0000062996-23-000014_mas-20230331.htm:10]**  | **2,127**  **[0000062996-23-000031_a630238-kex99.htm:0]**  | **1,979**  **[0000062996-23-000042_mas-20230930.htm:15]**  | **1,882**  **[0000062996-24-000004_a1231238-kex99.htm:0]**  | **1,926**  **[0000062996-24-000012_mas-20240331.htm:5]**  | **2,091**  **[0000062996-24-000026_a630248-kex99.htm:0]**  | **1,983**  **[0000062996-24-000033_mas-20240930.htm:15]**  |

5cef1b9d563c7f339b9638b661de151731b64306d9237763695b4ca5ea48b236

Masco Corporation is a global leader in the design, manufacture, and distribution of branded home improvement and building products, primarily focusing on the repair and remodeling (R&R) industry, with a smaller portion dedicated to new home construction **[0000062996-24-000006_mas-20231231.htm:3]** **[0000062996-24-000006_mas-20231231.htm:32]**. The company operates through two main segments: Plumbing Products and Decorative Architectural Products. Masco emphasizes leveraging its strong brands, product innovation, and customer service to drive growth and expand margins, while maintaining a disciplined capital allocation strategy **[MAS_3400742_0]** **[0000062996-24-000006_mas-20231231.htm:3]** **[0000062996-24-000006_mas-20231231.htm:32]**.

1. **Plumbing Products Segment** - Designs and manufactures a wide range of products including faucets, plumbing system components, valves, showerheads, bath hardware, bath units, tubs, shower bases, enclosures, shower drains, steam shower systems, sinks, kitchen accessories, toilets, spas, exercise pools, aquatic fitness systems, saunas, and water handling systems **[MAS_3400742_0]** **[0000062996-24-000006_mas-20231231.htm:88]** **[0000062996-24-000006_mas-20231231.htm:70]**.
   
2. **Decorative Architectural Products Segment** - Offers architectural coatings such as paints, primers, specialty coatings, stains, waterproofing products, paint applicators, and accessories, with the Behr brand being a significant part of this segment, sold exclusively through The Home Depot **[MAS_3400742_0]** **[0000062996-24-000006_mas-20231231.htm:6]** **[0000062996-24-000006_mas-20231231.htm:70]**.

4fd28c894009e04b9aba4441a39a2c3206b094bdd31a8bd3e06a3a887adac6ba

6477c6737d688d1b51181f236c30060e1bc7c5acb75c41dac23895e063cc6451

Change in net sales from higher sales volume of plumbing products (percentage)

Change in net sales from unfavorable sales mix of plumbing products (percentage)

Change in net sales from lower sales volume across the entire company (percentage)

Change in net sales from lower net selling prices of decorative architectural products (percentage)

Change in net sales from higher net selling prices of plumbing products (percentage)

690fc52c7bdf13720fb3caf9f042b4101539b1365c241f9bae39fed551e7c711

| Metric [USD Million] | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| North America        | N/A     | **1,602**  **[0000062996-23-000042_mas-20230930.htm:6]**  | **1,718**  **[0000062996-23-000033_mas-20230630.htm:5]**  | **1,555**  **[0000062996-23-000014_mas-20230331.htm:4]**  | N/A     | N/A     | N/A     | N/A     |
| International        | N/A     | **377**  **[0000062996-23-000042_mas-20230930.htm:6]**    | **409**  **[0000062996-23-000033_mas-20230630.htm:5]**    | **424**  **[0000062996-23-000014_mas-20230331.htm:4]**    | N/A     | N/A     | N/A     | N/A     |
| Total Revenue        | **1,882**  **[0000062996-24-000004_a1231238-kex99.htm:0]**  | **1,979**  **[0000062996-23-000042_mas-20230930.htm:6]**  | **2,127**  **[0000062996-23-000033_mas-20230630.htm:5]**  | **1,979**  **[0000062996-23-000014_mas-20230331.htm:4]**  | N/A     | N/A     | N/A     | N/A     |

9852149acfeb385d4b00b06a4da5e79e1c44c87f1f5d8498eb9b78dc984f9d19

Adjustments for Non-Cash Items

Stock-Based Compensation (USD, millions)

Changes in Working Capital

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

6f2bf3ec1bb5570d79ba96e711a44ab1e0b4871c79af004ffa299a8cfddce3bd

1. With the ongoing uncertainty in the macroeconomic environment and your revised expectation of flat sales in the second half of the year, what specific strategies are you implementing to drive growth and mitigate the impact on your full-year sales guidance?
2. Considering the increased commodity and ocean freight costs impacting both segments, can you elaborate on the specific cost savings initiatives and operational efficiencies you are leveraging to sustain margin expansion, and how confident are you in their long-term sustainability?
3. You mentioned a 30% reduction in tariff exposure, but in light of potential abrupt changes in tariff policy, how prepared are you to manage additional tariffs, and what lessons from previous experiences are you applying to mitigate these risks effectively?
4. Given that existing home sales are at historically low levels, which traditionally boost DIY spending, how are you adjusting your approach to address the continued softness in the DIY paint market and offset potential declines in this segment?
5. With the M&A environment being quiet due to current rates and valuations, how do you plan to execute your capital allocation strategy to drive shareholder value, particularly if bolt-on acquisitions remain limited and you have committed to deploying approximately $600 million?

7ecf56c966ce5d82c4ed49c40ca0a66d5afa4861d0706ce518e7658a0b4b8cd6

North America

International

International, principally Europe

Total Revenue

419630c78f6a58ab4925319d3a39a16490a6039e98be4f8d9f9806c4a9877753

- Dornbracht AG & Co. KG - Competitor in the plumbing products segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Zurn Elkay Water Solutions Corporation - Competitor in the plumbing products segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Fortune Brands Innovations, Inc.'s Moen, Rohl and Riobel brands - Competitors in the plumbing products segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Kohler Co. - Competitor in the plumbing products segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Lixil Group Corporation’s American Standard and Grohe brands - Competitors in the plumbing products segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Spectrum Brands Holdings, Inc.'s Pfister faucets - Competitor in the plumbing products segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Artesian Spas - Competitor in the spas, exercise pools, aquatic fitness systems and saunas segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Harvia - Competitor in the spas, exercise pools, aquatic fitness systems and saunas segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Jacuzzi - Competitor in the spas, exercise pools, aquatic fitness systems and saunas segment  **[0000062996-24-000006_mas-20231231.htm:5]** .
- Master Spas - Competitor in the spas, exercise pools, aquatic fitness systems and saunas segment  **[0000062996-24-000006_mas-20231231.htm:5]** .

119d919c5c5b36c64a3436343e31f43de8c8c1ff76fdaa5cef36b99b4804114a

**Annual guidance for FY 2024:**
- **Full-year sales**: down low single digits  **[MAS_3404324_4]** **[MAS_3404324_2]** (lowered from plus or minus low single digits  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Operating margin**: 17.5%  **[MAS_3404324_4]** **[MAS_3404324_2]** (raised from 17%–17.5%  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Plumbing segment sales**: plus or minus low single digits  **[MAS_3404324_4]** (no change from plus or minus low single digits  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Plumbing segment operating margin**: 19%  **[MAS_3404324_4]** (no change from 19%  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Decorative Architectural segment sales**: down mid single digits  **[MAS_3404324_4]** (lowered from down low single digits  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Decorative Architectural segment operating margin**: 18%  **[MAS_3404324_4]** (no change from 18%  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Earnings Per Share (EPS)**: $4.05 to $4.15  **[MAS_3404324_4]** **[MAS_3404324_2]** (lowered from $4.05 to $4.20  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Capital deployment**: $750 million  **[MAS_3404324_4]** **[MAS_3404324_2]** (raised from $600 million  **[MAS_3394261_4]** **[MAS_3394261_2]** )  
- **Working Capital as a Percent of Sales**: 16%  **[MAS_3404324_3]** (no prior guidance)  
- **DIY Paint Market**: down high single digits  **[MAS_3404324_3]** (no prior guidance)  
- **Pro Paint Market**: increase low single digits  **[MAS_3404324_3]** (no prior guidance)

795e0c4f67b18a0346343f578bd67919f2cfc77b0ff12f2d8c600895580dbe3a

Plumbing Products

Decorative Architectural Products

Cabinetry Products

Windows and Other Specialty Products

Installation and Other Services

Other Specialty Products

508612bf8ee046cb9a780a42c09ca9775259ec5f5ec0b215312cd84d2816a21c

dc72309d5bf8597fd88915f527e5cdf9165b3a9c09364f81a6a8d7fa80dca11a

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** FY 2024
- **Guidance:**
  1. **Sales:**
     - Full year sales expected to be plus or minus low single digits.
     - Second half sales anticipated to be roughly flat.
     - Plumbing segment sales expected to be plus or minus low single digits.
     - Decorative Architectural segment sales expected to be down low single digits.
  2. **Operating Margin:**
     - Overall operating margin expected to be 17% to 17.5%.
     - Plumbing segment margin expected to be approximately 19%.
     - Decorative Architectural segment margin expected to be approximately 18%.
  3. **Earnings Per Share (EPS):**
     - EPS estimate narrowed to $4.05 to $4.20.
  4. **Capital Deployment:**
     - Approximately $600 million expected for share repurchases or acquisitions  **[MAS_3394261_4]** **[MAS_3394261_2]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024
- **Guidance:**
  1. **Sales:**
     - Overall sales expected to be roughly flat.
     - Plumbing and Decorative Architectural segment sales expected to be plus or minus low single digits.
  2. **Operating Margin:**
     - Overall margin expected to grow to approximately 17%.
     - Plumbing segment margin expected to expand to approximately 18.5%.
     - Decorative Architectural segment margin expected to be approximately 18%.
  3. **Earnings Per Share (EPS):**
     - Adjusted EPS anticipated to be $4 to $4.25.
  4. **Currency Impact:**
     - Minimal impact expected.
  5. **Share Count and Tax Rate:**
     - 221 million average diluted share count and 24.5% effective tax rate.
  6. **First Half and Second Half Expectations:**
     - Sales down slightly in the first half, modest growth in the second half.
     - Operating margin flat in the first half, expansion in the second half  **[MAS_3380420_2]** **[MAS_3380420_4]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** FY 2024
- **Guidance:**
  1. **Earnings Per Share (EPS):** $4 to $4.25.
  2. **Sales:** Approximately flat.
  3. **Operating Margin:** Approximately 17%.
  4. **Plumbing Segment Sales:** Plus or minus low single digits.
  5. **Plumbing Segment Margin:** Approximately 18.5%.
  6. **Decorative Architectural Segment Sales:** Plus or minus low single digits.
  7. **Decorative Architectural Segment Margin:** Approximately 18%.
  8. **SG&A as a Percent of Sales:** 18% to 18.5%.
  9. **Dividend:** 2% increase, annual dividend $1.16 per share.
  10. **Free Cash Flow Conversion:** Approximately 90%.
  11. **Capital Expenditures:** Approximately $200 million.
  12. **Share Repurchases or Acquisitions:** Approximately $600 million.
  13. **Effective Tax Rate:** 24.5%.
  14. **Average Diluted Share Count:** 221 million.
  15. **Currency Impact:** Minimal impact expected  **[MAS_3372428_3]** **[MAS_3372428_2]** **[MAS_3372428_5]** .

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** N/A
- **Guidance:**
  - The documents do not contain information from the Q3 2024 earnings call for Masco Corporation. Therefore, I cannot provide the guidance they issued for that period [N/A].

6aba73a9665c9b8e48862bc87ef2340d877bb7a9427be8c3210e72197c42e57a

| Name                  | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Keith J. Allman       | President and Chief Executive Officer                                    | 2014             | Keith J. Allman has been serving as the **President and Chief Executive Officer** of Masco Corporation since **2014**. He has held key leadership positions within the company, including Group President and President of Delta Faucet  **[0001193125-24-083355_d485118ddef14a.htm:10]** **[0001193125-23-088086_d400147ddef14a.htm:5]** . |
| Imran Ahmad           | Group President                                                          | February 2023    | Imran Ahmad was elected as **Group President** at Masco Corporation in **February 2023**. He joined Masco in 2018, initially serving as the President of Masco Canada  **[0001193125-24-083355_d485118ddef14a.htm:59]** **[0001193125-23-088086_d400147ddef14a.htm:50]** .                                                                  |
| Kenneth G. Cole       | Vice President, General Counsel and Secretary                            | 2013             | Kenneth G. Cole was elected as **Vice President, General Counsel and Secretary** of Masco Corporation in **2013**. He joined Masco in **2004** and has held positions of increasing responsibility within the legal department  **[0001193125-24-083355_d485118ddef14a.htm:59]** **[0001193125-23-088086_d400147ddef14a.htm:50]** .          |
| Richard A. Marshall   | Vice President, Masco Operating System                                   | 2021             | Richard A. Marshall was elected as Vice President, Masco Operating System in **2021**. Before this role, he served as Vice President, Service Operations at Delta Faucet Company since **2003**  **[0001193125-24-083355_d485118ddef14a.htm:59]** **[0001193125-23-088086_d400147ddef14a.htm:50]** .                                        |
| Jai Shah              | Group President                                                          | 2018             | Jai Shah was elected as Group President at Masco Corporation in **2018**. He previously served as the President of Delta Faucet Company from **2014 to 2018** and held various other roles at Masco  **[0001193125-24-083355_d485118ddef14a.htm:59]** .                                       |
| Renee Straber         | Vice President, Chief Human Resource Officer                             | 2014             | Renee Straber was elected as **Vice President, Chief Human Resource Officer** at Masco Corporation in **2014**. She joined Masco in **1995** and has held various HR roles, including Vice President, Human Resources for Delta Faucet  **[0001193125-24-083355_d485118ddef14a.htm:59]** **[0001193125-23-088086_d400147ddef14a.htm:50]** . |
| Richard J. Westenberg | Vice President, Chief Financial Officer, and Treasurer                   | October 16, 2023 | Richard J. Westenberg serves as the **Vice President, Chief Financial Officer, and Treasurer** at Masco Corporation. He commenced his role as Vice President and CFO on **October 16, 2023**, and will be Treasurer effective **April 1, 2024**  **[0001193125-24-083355_d485118ddef14a.htm:24]** **[0001193125-24-083355_d485118ddef14a.htm:59]** . |
| Robin L. Zondervan    | Vice President, Chief Accounting Officer and Investor Relations/FP&A     | March 1, 2024    | Robin L. Zondervan was elected as **Vice President, Chief Accounting Officer** in 2022 and will take on responsibilities for **Investor Relations and FP&A** effective **March 1, 2024**. She previously worked at Steelcase Inc.  **[0001193125-24-083355_d485118ddef14a.htm:59]** .          |

5c244681ef8712f0b1636de94bb0ca7b534806566e17806ac1a355a310fcd66f

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | October 20, 2022  **[0000062996-24-000033_mas-20240930.htm:18]**  |
| End Date/Duration        | N/A             |
| Total additional amount  | **$2.0 billion**  **[0000062996-24-000033_mas-20240930.htm:18]**  |
| Remaining authorization amount | **$1.2 billion**  **[0000062996-24-000033_mas-20240930.htm:18]**  |
| Details                  | The program underscores Masco's strong financial position and the Board's confidence in the company's future. It replaces the existing authorization and is part of the company's long-term capital allocation strategy.  **[MAS_1104890_3]** **[0000062996-24-000033_mas-20240930.htm:18]**  |

653b138ef4ee832eae2356944e5c7a99e938433f60fc56e9f09944e5a8205126

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 1959  **[0000062996-24-000006_mas-20231231.htm:48]**    | Present  | Current auditor   |

356ad4cba0662b2d0fd5ec9f61131473a15089d2391ad340840eeaae11cbd0fe

191dd99b7ed95969e927a159698ef572a2d6422db3f476c366340bf71106e1a9

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $1.983 billion (+0.2% YoY)  **[0000062996-23-000042_mas-20230930.htm:9]** **[0000062996-24-000033_mas-20240930.htm:10]**   
- Plumbing Products: $1.219 billion (+2.3% YoY)  **[0000062996-23-000042_mas-20230930.htm:9]** **[0000062996-24-000033_mas-20240930.htm:10]**   
- Decorative Architectural Products: $764 million (-3% YoY)  **[0000062996-23-000042_mas-20230930.htm:9]** **[0000062996-24-000033_mas-20240930.htm:10]**   
- Operating Income (EBIT): $358 million (-6.5% YoY)  **[0000062996-23-000042_mas-20230930.htm:3]** **[0000062996-24-000033_mas-20240930.htm:2]**   
- Net Income: $167 million (**+541% YoY**)  **[0000062996-23-000042_mas-20230930.htm:3]** **[0000062996-24-000033_mas-20240930.htm:2]**   
- EPS (Diluted): $0.77 (-30% YoY)  **[0000062996-23-000042_mas-20230930.htm:3]** **[0000062996-24-000033_mas-20240930.htm:2]**   

ecde672ec98b9359a29898b792c863e4bd5b0e4bb9d275fac0486e9cb875f78c

6829f187e36a10cdf489bf90cf8c6120a004079a2c93986add4ee02a1b4addcc

ee6049de38175baef2ba8be87d744a5f57e195633632423dbc504ee3071392c4

- **Masco expects to outperform the market and expand margins in 2024 due to strong brands like Delta and Hansgrohe, a robust innovation pipeline, and leading market positions, even in a flat Repair and Remodel market.**  **[MAS_3362097_6]**
- **Despite softening international markets, Masco's Hansgrohe brand is gaining significant market share in Europe, with signs of stabilization and steady demand providing optimism for future growth.**  **[MAS_3362097_11]**
- **Masco is investing in new manufacturing facilities, including a new European faucet and shower facility and a paint manufacturing and distribution center in Ohio, positioning the company for future growth.**  **[MAS_3362097_15]**

44e7f96d62493629b93fe48968f42c0e2d3a0cd9a846f03a8be439d0d98c4cbc

1. **Repair and Remodel Outlook**  
   **Q:** Any changes to the outlook for repair and remodel given rate moves?  
   **A:** Management sees **no change** in the repair and remodel outlook despite recent rate moves. They expect the market to be **flat to down low single digits**, anticipating an uptick in the second half of the year. First-quarter performance was as expected, and guidance is being held.  **[MAS_3380420_7]** 

2. **Capital Allocation and Acquisitions**  
   **Q:** How is the company approaching capital allocation and potential acquisitions?  
   **A:** The company maintains its capital allocation strategy, focusing on **bolt-on acquisitions** in Paint and Plumbing, with approximately **$600 million** available for acquisitions or share buybacks. They are considering opportunities, including a significant paint asset under strategic review, consistent with their strategy.  **[MAS_3380420_12]** **[MAS_3380420_18]** 

3. **Plumbing Margins Outlook**  
   **Q:** What is the outlook for Plumbing margins following a strong Q1?  
   **A:** Despite a **19.1%** Plumbing margin in Q1, the full-year margin guidance remains unchanged at **18.5%**. Management cites a pipeline of productivity initiatives and expects no significant negative headwinds. Potential risks include commodity volatility and freight costs, but these are deemed manageable.  **[MAS_3380420_10]** **[MAS_3380420_11]** 

4. **International Plumbing Performance**  
   **Q:** What are expectations for International Plumbing sales?  
   **A:** The International market is expected to be down **low to mid-single digits**. While Germany shows stability, China remains variable. The company anticipates continued market share gains with Hansgrohe outperforming major competitors.  **[MAS_3380420_19]** 

5. **Price and Commodity Cost Dynamics**  
   **Q:** How are price and commodity costs affecting margins?  
   **A:** In Plumbing, a **low single-digit** price tailwind is expected for the year, with commodities being relatively neutral. In Paint, commodity impacts are not expected to be significant for the year, though there's monitoring of potential upward pressures from oil and TiO<sub>2</sub> prices.  **[MAS_3380420_15]** **[MAS_3380420_20]** **[MAS_3380420_21]** **[MAS_3380420_22]** 

6. **Cost Savings Initiatives**  
   **Q:** Can you elaborate on cost-saving programs in Plumbing?  
   **A:** The company is executing on purchasing efficiencies, value engineering, and productivity improvements through their operating system. Initiatives include consolidating component sets, optimizing labor productivity, and leveraging technology, contributing to margin enhancements.  **[MAS_3380420_23]** **[MAS_3380420_25]** **[MAS_3380420_26]** 

7. **Kichler and Liberty Hardware Performance**  
   **Q:** What's driving the decline in Kichler and hardware businesses?  
   **A:** Kichler and Liberty were down more than the overall portfolio, partly due to strategic decisions like exiting less profitable lines. As the year progresses, these businesses are expected to align more closely with repair and remodel industry trends.  **[MAS_3380420_8]** 

8. **Working Capital Improvements**  
   **Q:** What drove the improvements in working capital, and what's the outlook?  
   **A:** Disciplined management led to improved working capital, which is expected to end the year around **16.5%** of sales, similar to 2023 levels. Seasonal factors contribute to higher Q1 levels, but the company anticipates staying in line with normalized trends.  **[MAS_3380420_14]** 

9. **Consumer Price Sensitivity**  
   **Q:** How is consumer price sensitivity impacting demand?  
   **A:** Management finds it challenging to assess price elasticity due to recent significant inflation. While some price sensitivity exists at lower price points and in specific markets like China, overall mix impact has been minimal.  **[MAS_3380420_27]** 

10. **Delta Brand Performance**  
    **Q:** Is the growth in Delta sustainable in a down market?  
    **A:** Delta saw revenue growth, particularly in the wholesale channel, and management maintains cautious optimism. Performance aligns with full-year guidance, anticipating stabilization in North American Plumbing.  **[MAS_3380420_28]** 

11. **Incremental Margins with Volume Recovery**  
    **Q:** How should we view incremental margins if volumes turn positive?  
    **A:** Incremental margins are expected to be consistent with historical levels at **30–35%** in Plumbing, slightly lower in Decorative Architectural. No change is expected in the drop-down on incremental volume.   

84b3865b1f741d631d2ea789204afc40536dadd761c41af16d84674b0c34c1a4

- **Masco's DIY paint segment is experiencing more pressure than expected due to economic sensitivities and significant price increases, leading to declining volumes.**  **[MAS_3394261_13]** **[MAS_3394261_5]**
- **The company anticipates commodity inflation and ocean freight headwinds in the second half of the year, which may negatively impact margins despite planned low single-digit price increases in the Plumbing segment.**  **[MAS_3394261_21]**
- **Management has tempered expectations for sales in the second half of the year, indicating potential challenges in meeting earnings targets if sales come in at the lower end of the forecasted range.**  **[MAS_3394261_9]**

f41fbc7e9086131ef51fdcb5410a4fb224d842d32408b10a0439548d268c3cf3

- **Masco's strong focus on consumer-backed innovation and reducing complexity enhances their market position, leveraging their brand to meet unmet customer needs and build pricing power.**  **[MAS_3394261_8]**
- **Effective cost management and operational efficiencies have structurally improved margins, enabling Masco to maintain its EPS guidance even with tempered sales expectations.**  **[MAS_3394261_21]** **[MAS_3394261_19]** **[MAS_3394261_9]**
- **Holding market share in both DIY and pro paint segments, with robust partnerships like Home Depot and strong brands like Behr, Masco is well-positioned to capitalize on demand recovery with new manufacturing facilities coming online.**  **[MAS_3394261_13]** **[MAS_3394261_10]**

120a91c97fe6c79921743b99f005448dce28d48ae01beec4ff006226c04db401

- Masco is **gaining market share** in both domestic and international markets, particularly in their international plumbing segment where they are **outperforming major competitors in Europe** and **continuing to gain share**.  **[MAS_3380420_19]**
- The company has demonstrated **strong margin performance** driven by productivity initiatives and operational efficiencies, leading to confidence in overall **margin increases year-over-year**. Incremental margins are expected to remain consistent with historical levels of **30% to 35%** in plumbing.  **[MAS_3380420_27]** **[MAS_3380420_10]**
- Masco has a **strong relationship** with key partner Home Depot and sees continued opportunities to **gain market share** in paint and plumbing products. Their **Pro business is performing strongly** with significant **share gains and profitability**.  **[MAS_3380420_28]** **[MAS_3380420_22]**

26e323b8cb945b1c0d5640386882d7a4820deedd413b0bc680b77b0238cad2bd

1. **Margin Performance and Outlook**  
   **Q:** Explain factors driving margin expansion; can it continue next year?  
   **A:** Management is pleased with their margin performance, achieving **17.5% operating margins**, at the top end of their range.  **[MAS_3404324_6]**  This marks their sixth consecutive quarter of margin expansion, executed in a volatile environment.  **[MAS_3404324_6]**  The strong gross margin is due to operational excellence and cost savings initiatives.  **[MAS_3404324_6]**  They expect full-year margins to expand for the entire company and both plumbing and decorative segments, and plan to carry that momentum into next year.  **[MAS_3404324_6]** 

2. **Impact of Kichler Divestiture on Margins**  
   **Q:** How does Kichler sale affect current margin guidance?  
   **A:** The divestiture of Kichler, whose margins were below that of the segment and Masco overall, is accretive to margins.  **[MAS_3404324_9]**  While they don't disclose individual profitability, management noted that the increase in margin expectations is due to both the divestiture and strong operating performance across business units.  **[MAS_3404324_9]** 

3. **2026 Targets and R&R Market Outlook**  
   **Q:** Are 3-5% R&R growth assumptions still valid for 2026 targets?  
   **A:** Yes, the company maintains its expectation of a **3-5% growth rate** for the repair and remodel (R&R) market.  **[MAS_3404324_7]**  They believe the fundamentals are strong but acknowledge the timing of market normalization is unpredictable.  **[MAS_3404324_7]**  They are not changing their 2026 expectations or guidance.  **[MAS_3404324_7]** 

4. **Commodity Costs Impact and Pricing Strategy**  
   **Q:** Are higher commodity costs a greater headwind; will you raise prices in plumbing?  
   **A:** Commodity costs, particularly copper and zinc, increased significantly, with copper hitting an all-time high over **$5 per pound** in May.  **[MAS_3404324_15]**  This has been a headwind, with unfavorable price/cost relationships in Q3 expected to continue into Q4.  **[MAS_3404324_15]**  Despite this, they've offset the impact through cost initiatives and pricing, expanding plumbing margins by **100 basis points** in Q3.  **[MAS_3404324_15]**  Commodity costs remain elevated, which will factor into their pricing strategy for 2025.  **[MAS_3404324_15]** 

5. **Pro Paint Business Growth and Outlook**  
   **Q:** What's the size and outlook of the pro paint business?  
   **A:** The pro paint business is approximately **$900 million** in size.  **[MAS_3404324_8]**  Management is pleased with its growth and ability to gain and hold share.  **[MAS_3404324_8]**  They attribute this to the strength of the Behr brand, innovation, and strong channel partnerships.  **[MAS_3404324_8]**  They expect to continue growing above market and gaining share going forward.  **[MAS_3404324_8]** 

6. **Outlook for DIY Paint Market Growth**  
   **Q:** Will DIY paint grow in line with R&R market moving forward?  
   **A:** While the DIY paint market has been declining, management believes it will return to growth but may not grow in line with the overall R&R market.  **[MAS_3404324_11]**  Factors supporting this include influx of millennials forming households, healthy home equity levels, and millennials' propensity for DIY projects.  **[MAS_3404324_11]**  The timing of this turnaround is uncertain.  **[MAS_3404324_11]** 

7. **M&A Strategy Post Kichler Divestiture**  
   **Q:** Post Kichler sale, will you pursue bolt-on acquisitions or other M&A?  
   **A:** The company's M&A strategy remains focused on bolt-on acquisitions within plumbing, coatings, or wellness businesses.  **[MAS_3404324_19]**  They are not averse to bigger transactions but these would be within core business segments.  **[MAS_3404324_19]**  The proceeds from the Kichler sale, approximately **$150 million**, increase their capacity for share buybacks or acquisitions.  **[MAS_3404324_20]** 

8. **Reduction in China Import Exposure**  
   **Q:** How has Kichler sale affected your China import exposure?  
   **A:** Kichler had a higher concentration of Chinese imports.  **[MAS_3404324_12]**  Since the Section 301 tariffs in 2019, Masco reduced its exposure to Chinese imports by about **30%**.  **[MAS_3404324_12]**  With the Kichler divestiture, this reduction increases to **closer to 40%**.  **[MAS_3404324_12]** 

9. **Decorative Architectural Products Margins**  
   **Q:** How did paint margins perform relative to expectations?  
   **A:** The Decorative Architectural Products segment delivered strong margins at **18.1%** in the quarter.  **[MAS_3404324_21]**  They reaffirmed full-year margin guidance at approximately **18%**.  **[MAS_3404324_21]**  Pricing is expected to be down low single digits, with commodity costs roughly flat.  **[MAS_3404324_21]**  They are offsetting headwinds through cost savings initiatives and expect modest operating profit margin expansion this year versus last year.  **[MAS_3404324_21]** 

10. **Plumbing Business Performance**  
    **Q:** How is the plumbing segment performing internationally and in North America?  
    **A:** Internationally, they grew **3%** in the third quarter.  **[MAS_3404324_17]**  Europe shows signs of stability, particularly in Germany, while China is more volatile but delivered growth.  **[MAS_3404324_17]**  They expect international plumbing to be down low to mid-single digits for the full year.  **[MAS_3404324_17]**  In North America, the e-commerce market and retail performance are strong, while the trade segment is slightly challenged but fundamentally stable.  **[MAS_3404324_17]** 

11. **Pro Paint Share Gains**  
    **Q:** Are share gains in pro paint due to shelf space or market outperformance?  
    **A:** Share gains are due to outperformance against the broader market, not changes in shelf space.  **[MAS_3404324_22]**  Factors include their offering, ease of doing business, product quality, strong Behr brand, and innovation.  **[MAS_3404324_22]** 

12. **Wellness Business Performance**  
    **Q:** How is the wellness segment performing given higher-ticket offerings?  
    **A:** The wellness business is relatively stable, performing in line with the overall plumbing segment.  **[MAS_3404324_23]**  They saw growth in Q2 and similar performance in Q3.  **[MAS_3404324_23]**  Organically, they observe stability and improvement, and are optimistic about the business's positioning when the market turns around.  **[MAS_3404324_23]** 

13. **Trade Plumbing Channel and Inventory**  
    **Q:** What are you seeing in wholesale and trade plumbing channels?  
    **A:** Inventories are at typical levels for this time of year, accounting for seasonal variation.  **[MAS_3404324_24]**  The trade segment was down slightly and feeling some pressure.  **[MAS_3404324_24]**  Sentiment in the trade channel acknowledges volatility but remains fundamentally stable, with optimism about industry fundamentals.  **[MAS_3404324_24]** 

6df64dfd67750ee9b79a60bde7ee534fac717aa08ee7147f48dde0b43b111320

- **Masco's lighting and hardware businesses experienced double-digit sales declines in the third quarter, exceeding the overall segment's decline**.  **[MAS_3362097_14]**  This softness was attributed to their higher exposure to the DIY market.
- **International markets, particularly Europe and China, continued to weaken, and the company anticipates ongoing softness in these regions into the fourth quarter**.  **[MAS_3362097_11]**  This could pose risks to Masco's international plumbing segment.
- **Fourth-quarter margins are expected to decline sequentially due to factors such as negative mix in plumbing, increased startup costs for new facilities, and continued pressure from lower volumes**.  **[MAS_3362097_15]**  These factors may negatively impact profitability in the near term.

14b12217eb731090e1b483a140aa9e8079f22f1ad1997920f34526f39ea67d12

- **Uncertainties in the Repair and Remodel Market:** The company acknowledges ongoing volatility in the repair and remodel market due to macroeconomic factors such as interest rates and consumer confidence, which could impact demand for their products.  **[MAS_3380420_7]**
- **Weakness in International Plumbing Segment:** Masco expects their international plumbing market to be down low to mid-single digits, with particular weakness in **China**, which is lagging in recovery and tends to be a more profitable market, leading to a negative impact on margins.  **[MAS_3380420_19]** ,  **[MAS_3380420_16]**
- **Declining DIY Paint Volumes:** The company continues to see a decline in the DIY paint market, stating that they "haven't really seen a restoration of volumes," and expect DIY paint sales to be down **low single digits** for the year.  **[MAS_3380420_5]**

6d2b519873993ba7c010b2946a744fe28920fffd7bbae95267e45fd72e272903

- **Masco expects to outperform the market and expand margins**, driven by their industry-leading brands, strong consumer and trade recognition, and superior service proposition.  **[MAS_3372428_6]**
- **The Pro Paint business has achieved 60% growth over the last three years**, and Masco intends to continue gaining share through innovation, service, and competitive offerings, particularly in the pro paint market.  **[MAS_3372428_24]**
- **Masco is confident in achieving its 2026 margin targets**, even if the remodeling market does not fully recover, by focusing on cost and variable productivity, disciplined pricing, and operational excellence through its Masco operating system.  **[MAS_3372428_25]**

a0147497d1f525b9d3b3ed0da4fe6ea62753000b2c054774b48acd0eaa818d6d

1. **Margin Expansion to 2026 Targets**  
   **Q:** How will margin expansion progress to 2026 targets?  
   **A:** Keith Allman explains that in **2024**, they expect a **flat top line** and **modest margin improvements** due to ongoing operational efficiencies and innovation projects that will gain traction in later years. Margin acceleration is anticipated in **2025 and 2026**, driven primarily by a **25–30% drop-down** on incremental revenue from projected **3–5% R&R market growth** and benefits from new product launches and cost reduction initiatives. ** **[MAS_3372428_7]** **[MAS_3372428_12]** **

2. **Revenue Guidance and Demand Outlook**  
   **Q:** How is demand tracking, and what's the revenue outlook for '24?  
   **A:** Demand is **stabilizing**, with signs of improvement in wholesale plumbing, Europe, and China. For **2024**, Masco expects sales to be **flat to slightly down** in the first half, with better performance in the second half as growth picks up. Overall, they project a **flat top line** for the year, aligning with their guidance of a **flat to down low single-digit R&R market**. ** **[MAS_3372428_9]** **[MAS_3372428_11]** **

3. **Cost Inflation and Pricing Dynamics**  
   **Q:** What are the expectations for input costs and pricing in '24?  
   **A:** In **2024**, input costs are not expected to have a significant impact. In Plumbing, they anticipate **modest input cost declines** offset by freight and other inflation, while Decorative Architectural Products should see a **modest decrease** in input costs. They expect a slight pricing **tailwind** in Plumbing and a slight **headwind** in Decorative due to **modest price givebacks** corresponding with cost deflation. ** **[MAS_3372428_14]** **[MAS_3372428_20]** **

4. **Working Capital and Cash Flow Management**  
   **Q:** What is the outlook for working capital in '24?  
   **A:** After reducing working capital to **16% of sales** in 2023, Masco plans to maintain disciplined working capital management in **2024**, targeting **16.5% of sales** to support inventory and service levels as the market grows. This approach contributed over **$200 million** to free cash flow in 2023. ** **[MAS_3372428_17]** **[MAS_3372428_21]** **

5. **Supply Chain and Red Sea Shipping Issues**  
   **Q:** Are there supply chain issues due to Red Sea shipping disruptions?  
   **A:** Masco is experiencing **elevated shipping costs** for containers rerouted around the Red Sea, primarily impacting their European business. These increased costs have been **factored into their 2024 guidance**, and so far, service levels have been maintained without significant disruptions. **[MAS_3372428_22]**

6. **Competitive Positioning and Market Share Gains**  
   **Q:** How is Masco planning to outgrow its markets?  
   **A:** Masco expects to **outperform the market** and **expand margins** by leveraging their strong brands, consumer and trade pull, and superior service proposition. They are focused on gaining share in areas like the showroom channel in Plumbing and have seen **60% growth** in pro paint over the past three years, aiming to continue this momentum through innovation and customer engagement. ** **[MAS_3372428_6]** **[MAS_3372428_23]** **

7. **Trends in Hardware and Lighting**  
   **Q:** What are the trends in hardware and lighting within Decorative Architectural?  
   **A:** In **2023**, the hardware and lighting businesses faced **market softness**, but took pricing and cost actions to partially offset volume losses. In **2024**, these businesses are expected to perform **in line with the overall R&R market**, which is projected to be **flat to down low single digits**. **[MAS_3372428_10]**

8. **Spa Business Expectations**  
   **Q:** What's the outlook for the spa business in '24?  
   **A:** Masco is positive about their spa business, citing it as a **strong, globally recognized** segment with growth opportunities driven by trends like an aging population and increased focus on health and wellness. The business is **growing** and is expected to continue performing well in **2024**. **[MAS_3372428_25]**

9. **Cost Management Opportunities**  
   **Q:** Where are the biggest cost opportunities moving forward?  
   **A:** New CFO Rick Westenberg sees significant opportunities in leveraging Masco's **continuous improvement mindset** and **operational efficiencies**. By driving productivity and efficiency across all businesses, particularly in Plumbing, Masco aims to enhance cost reduction and scale benefits. **[MAS_3372428_19]**

10. **Impact of Rates and Existing Home Sales**  
    **Q:** How will changing rates and existing home sales affect the business?  
    **A:** While existing home sales are important, Masco views **consumer confidence** and **home equity** as more critical drivers of R&R spending. They believe that as rates decrease and consumer confidence improves, R&R activity will be positively impacted. Segments focused on **lower-ticket, repair and remodel** projects are expected to benefit the most. **[MAS_3372428_16]**

fff9c02b932a304bd3d6ee8c5d1ffc480930f016b381e0c3fd1bab4f70189150

- Elevated shipping costs due to disruptions in the Red Sea are impacting Masco's supply chain, particularly in their European plumbing business, potentially pressuring margins.  **[MAS_3372428_22]**
- Masco's 2026 margin targets rely on achieving 3% to 5% sales growth in the repair and remodel market in 2025 and 2026; failure to reach these growth rates could challenge margin expansion goals.  **[MAS_3372428_12]**
- The spa business, being a higher-ticket item and more globally exposed, may remain volatile and underperform smaller-ticket items, adding uncertainty to future growth prospects.  **[MAS_3372428_2]**

d14788711e23121fc3413576212939543e144978d3af1353d3c342710a2d3dca

1. **Earnings Guidance Amid DIY Paint Decline**  
   **Q:** Can you maintain earnings guidance despite DIY paint softness?  
   **A:** Management is confident in meeting their earnings guidance even if sales are at the lower end of expectations due to cost-saving initiatives and operational efficiencies. They have tempered their sales outlook but still expect to achieve margin expansion through sustainable productivity enhancements and cautious SG&A spending. They have maintained the midpoint of their EPS guidance range and believe they can deliver improved margins regardless of sales variations.  **[MAS_3394261_9]** 

2. **Margin Outlook and Cost-Saving Initiatives**  
   **Q:** How are cost-saving initiatives supporting margin expansion?  
   **A:** The company has implemented numerous cost-saving measures across operations, including productivity enhancements, shift optimization, and efficiency improvements in manufacturing plants. These initiatives are considered sticky and sustainable, contributing to higher margins even in a volatile market. Management emphasizes that they are not relying on uncertain future events but on executed and ongoing operational improvements to achieve margin targets.  **[MAS_3394261_19]** 

3. **Adjustments for Potential Tariff Changes**  
   **Q:** How will you handle abrupt changes in tariff policy?  
   **A:** Masco has reduced tariff exposure by approximately **30%** through alternative sourcing strategies and plans to execute a proven playbook if tariffs increase. Management believes they can navigate potential tariff impacts more effectively and swiftly based on past experience, having maintained margins above pre-pandemic levels despite previous tariff challenges.  **[MAS_3394261_7]** 

4. **Strong Performance in Plumbing Segment**  
   **Q:** What's driving growth in the Plumbing segment?  
   **A:** Growth in the Plumbing segment is driven by stabilization of demand both internationally and in North America, with signs of recovery in key international markets like Germany and China. The company is gaining market share, particularly with their Hansgrohe brand in Europe. Product innovation, influencer advocacy, and the successful integration of the Sauna360 acquisition are also contributing to the positive trends.  **[MAS_3394261_6]** 

5. **Capital Allocation and M&A Pipeline**  
   **Q:** What's the outlook for M&A activity and capital allocation?  
   **A:** While the M&A pipeline remains consistent, activity is somewhat quiet due to interest rates and valuation expectations. Masco continues to focus on paint and plumbing businesses that can leverage their strengths, seeking opportunities similar to the Sauna360 acquisition. They remain committed to their capital allocation strategy of **$600 million** towards share repurchases or bolt-on M&A.  **[MAS_3394261_20]** 

6. **Sensitivity of EPS Guidance to Top Line**  
   **Q:** Is EPS guidance sensitive to lower sales volumes?  
   **A:** Management believes they can achieve their EPS guidance even if sales come in at the lower end of the range. This confidence is based on their ability to manage margins through operational efficiencies and cost control measures, which are expected to offset potential sales shortfalls.  **[MAS_3394261_9]** 

7. **DIY Paint Volumes vs. Pre-COVID Levels**  
   **Q:** How do current DIY paint volumes compare to pre-COVID levels?  
   **A:** DIY paint volumes are currently below pre-pandemic levels, while pro paint volumes are above. Overall, the company's volumes are relatively consistent with pre-pandemic levels when considering that pro growth has offset DIY declines. Management sees the current situation as a deferral of demand and expects improvement when the market normalizes.  **[MAS_3394261_10]** 

8. **Pricing and Commodity Costs in Plumbing**  
   **Q:** How are commodity costs affecting pricing in Plumbing?  
   **A:** The company is experiencing some commodity inflation, particularly in metals like copper and zinc. In response, they are implementing low single-digit price increases in the Plumbing segment to offset these costs. Despite the headwinds, they expect margin expansion due to operational efficiencies and effective cost management.  **[MAS_3394261_14]** 

9. **DIY Paint Market Share and Performance**  
   **Q:** Is DIY paint performance tracking industry trends?  
   **A:** Management believes they are holding market share in DIY paint, performing in line with the industry. They attribute this to their strong partnership with The Home Depot and the strength of the Behr brand, which is highly regarded for quality and brand equity. They remain confident in their position and are prepared for when DIY demand returns.  **[MAS_3394261_15]** 

10. **Impact of Existing Home Sales Slowdown**  
    **Q:** How does the slowdown in existing home sales affect you?  
    **A:** While increased existing home sales are beneficial, the impact on Masco's business is minimal due to the large base of **130 million** existing homes compared to the **4 million** annual sales. The company's focus on small-ticket repair and remodel products provides resilience, and they are not significantly affected by fluctuations in existing home turnover.  **[MAS_3394261_16]** 

b20262a9f175deb07f1376d8b0991bc4bea5c9941970b3a81626085a56a1ce85

Masco Corp (MAS)

Financials