Thank you, operator, and good morning, everyone. Welcome to Masco Corporation's 2026 first quarter conference call.

With me today are Jon Nudi, President and CEO of Masco, and Rick Westenberg, Masco's Vice President and Chief Financial Officer. Our first quarter earnings release and the presentation slides are available on our website under Investor Relations.

Following our remarks, we will open the call for analysts' 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 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. We've described these risks and uncertainties in our risk factors and other disclosures in our Form 10-K and our Form 10-Q 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.

Thank you, Robin. Good morning, everyone, and thank you for joining us.

Before I discuss our quarterly results, I want to spend a few minutes talking about the continued evolution of our Masco Executive Committee, which we established at the end of last year. Jai Shah, Group President, Plumbing and Wellness, and Rick Marshall, Vice President, Masco Operating System, recently announced their intent to retire from Masco later this summer.

I'd like to thank both Jai and Rick for their leadership and their important contributions to both our business and our culture. With Jai's retirement, we've taken steps to further streamline our organization.

The leaders of our four largest businesses—Delta, Hansgrohe, Behr, and Watkins Wellness—will now all report directly to me. These four leaders have over 80 years of combined service at Masco, have extensive experience in our industry, and are key contributors to Masco's performance and our culture.

Furthermore, we are adding two new leaders to our Executive Committee with expertise in supply chain and procurement. The addition of these leaders and capabilities will enable us to drive additional efficiencies, leverage our scale, and enhance our speed of execution across the enterprise.

The structure and leadership composition of our Executive Committee will help enable greater agility and tighter alignment between corporate and business unit priorities, all in the pursuit of delivering above-market top- and bottom-line growth. In addition, we have continued the implementation of other initiatives that were announced earlier this year.

Our integration of Liberty Hardware into Delta Faucet Company is on track as we further leverage the brands, capabilities, and scale of our Delta Faucet business. Restructuring actions to streamline our business, reduce headcount, and optimize operations are ongoing.

We incurred approximately $8 million in restructuring charges in the first quarter, and we continue to expect approximately $50 million in total charges in 2026. The savings generated from these actions will fund additional growth initiatives and contribute to our future margin expansion.

We're already experiencing the positive impact of these actions in our results. With that, let's dive into our first quarter results.

Please turn to slide 5. Overall, we are pleased with our performance in an extremely dynamic environment.

Net sales increased 6%, or 4% in local currency, primarily driven by favorable pricing. Additionally, while still down slightly, this was our strongest year-over-year first quarter volume performance since the end of the pandemic.

Operating profit was $324 million, an increase of 13%. Operating profit margin was 16.9%, an improvement of 90 basis points.

Earnings per share grew 20% during the quarter to $1.04 per share. Turning to our segments, Plumbing Products sales increased 7% in local currency, exceeding our expectations, largely due to more resilient than expected volume.

North American sales increased 9% in local currency, driven by favorable pricing as well as slightly higher volumes. Delta Faucet delivered a strong quarter with sales growth across all three channels: trade, retail, and e-commerce.

Additionally, Delta Faucet was recognized by USA Today as the most trusted brand, and by Newsweek as one of America's most trustworthy companies, demonstrating the significant strength of Delta's brand and service capabilities, which are resonating with customers and consumers. Turning to International Plumbing, sales increased 1% in local currency, driven by growth across many European markets, particularly Germany, partially offset by the ongoing weak market in China.

Operating profit for the Plumbing Products segment grew 10% to $250 million, and operating margin expanded 10 basis points to 18.3%. Turning to our Decorative Architectural segment, sales were in line with the prior year.

DIY paint sales decreased low single digits, while PRO paint sales grew mid-single digits. Operating profit for the segment increased 19% to $105 million, and operating margin was 19%.

Showcasing our commitment to innovative new products, BEHR PREMIUM PLUS® EcoMix was recently named a 2026 Green Builder Sustainable Product of the Year. Behr continues its industry leadership in delivering both innovative and sustainable products.

Turning to capital allocation, our strong cash flow allowed us to return $267 million to shareholders this quarter through dividends and share repurchases. We are pleased with our first quarter performance and the team's strong execution and operational focus.

Additionally, I'm proud of how our teams are working quickly to implement various restructuring actions to ensure we have the appropriate cost structure for our business in this rapidly changing environment. Turning to our expectations for the full year, we continue to face a highly dynamic macroeconomic and geopolitical environment.

Therefore, we believe it is prudent to maintain our 2026 earnings per share guidance in the range of $4.10 to $4.30 per share. Our guidance includes our expectation that our sales will now be up low single digits for 2026, but that we will also incur higher than previously anticipated commodity costs.

Rick will share additional details of our guidance in a few moments. While uncertainty remains in the near term, we are focused on positioning ourselves for ongoing sales and profit growth over the mid to long term.

The structural factors for repair/remodel activity are strong, including record high home equity levels, the age of the housing stock, and increasing pent-up demand for renovation projects. As consumer sentiment improves, interest rates decrease, and existing home turnover increases, we expect these favorable fundamentals to become a tailwind for our business.

In addition, we're taking the right actions to optimize our business, leaving us well positioned to deliver above-market top- and bottom-line growth. We are committed to our consumer-driven strategy, which leverages our industry-leading brands, expanded commercial capabilities, and enhanced operational excellence.

We look forward to further sharing this strategy and our long-term goals with you, either in person or online, at our upcoming Investor Day on Wednesday, May 13th, in New York City. With that, I'll now turn the call over to Rick, to go over our first quarter results and 2026 outlook in more detail.

Rick?

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 7, we delivered strong first quarter results, with total sales increasing 6%, or 4% excluding the favorable impact of currency.

In local currency, North American sales increased 5% and international sales increased 1%. Gross margin expanded 10 basis points to 36% in the quarter.

SG&A as a percent of sales was 19.1%, 80 basis points lower than the prior year. Operating profit grew 13% to $324 million in the quarter, and our margin expanded 90 basis points to 16.9%.

Operating profit was driven by pricing actions and cost savings initiatives, partially offset by higher tariff and commodity costs. Our EPS grew 20% to $1.04 per share in the quarter.

Turning to slide 8, Plumbing sales increased 9% in the first quarter, or 7% excluding the favorable impact of currency. While this growth was primarily driven by pricing actions, which increased sales by 6%, our performance was better than expected, driven by volume, which was up slightly in the quarter.

In local currency, North American Plumbing sales increased 9% in the quarter. This performance was primarily driven by strong 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 softness in China and other smaller markets. Segment operating profit in the first quarter increased 10% to $250 million, and operating margin expanded 10 basis points to 18.3%.

Operating profit was driven by pricing actions and cost savings initiatives, partially offset by higher tariff and commodity costs. Turning to slide 9, Decorative Architectural sales were in line with the prior year.

This performance was driven by mid-single-digit growth in our PRO paint sales, offset by a low-single-digit decrease in our DIY paint sales. These results were largely in line with our expectations, and we continue to anticipate full-year PRO paint sales to increase mid-single digits and for DIY paint sales to decrease mid-single digits.

Operating profit in the first quarter was $105 million. Growth versus the prior year was primarily driven by cost savings initiatives, which are inclusive of benefits from our recent restructuring actions, as well as increased pricing.

This was partially offset by higher commodity costs. Operating margin was 19% in the quarter and reflects the benefits of our Liberty Hardware business now being reported in our Plumbing segment.

This was coupled with a more normalized first quarter for our paint business as we lapped the inventory timing dynamic that unfavorably impacted the first quarter of last year. Turning to slide 10, our balance sheet remains strong, with gross debt-to-EBITDA at 2.1 times at quarter end.

We finished the quarter with $1.3 billion of liquidity, including cash and availability under our revolving credit facility. Working capital was 19.5% of sales at quarter end.

As expected, working capital balances in the first half of the year remain elevated versus the prior year due to the timing of when tariffs were implemented. However, we continue to anticipate working capital as a percent of sales will be approximately 16.5% at the end of the year.

Our strong cash performance enabled us to return $267 million to shareholders through dividends and share repurchases, including the repurchase of $202 million of stock in the first quarter. Additionally, based on the strength of our balance sheet and confidence in our future performance, we recently entered into a two-year delayed draw term loan of up to $500 million.

We plan to utilize the available funds under this facility to opportunistically repurchase our shares. As a result, we now expect to deploy at least $800 million toward share repurchases or acquisitions in 2026, up from our previous expectation of approximately $600 million.

Now let's turn to slide 11 and review our outlook for 2026. While we are pleased with our strong results in the first quarter, there remains a high degree of uncertainty in the macroeconomic and geopolitical environment.

As a result, we are largely maintaining our full-year outlook. For Masco overall, we expect 2026 sales to be up low single digits versus our previous guide of flat to up low single digits.

We continue to expect our margins to expand to approximately 17%. Regarding cadence for the year, given the timing of tariff impacts, which largely impacted our results in the second half of last year, we anticipate total Masco margin to be relatively flat in the first half of the year versus our previous guide of margin contraction, and to expand in the second half of the year as we lap the tariff impact and as our mitigation actions continue to take hold.

As it relates to tariffs, on our prior earnings call, we estimated the total cost impact from incremental tariffs to be approximately $200 million before mitigation this year. Given the recent ruling on IEEPA tariffs, the implementation of temporary Section 122 tariffs, and changes to how Section 232 tariffs on steel, aluminum, and copper are applied, we do anticipate the impact of these tariff changes before mitigation to be favorable.

However, given the great deal of uncertainty as to where tariffs will ultimately land, it is challenging to quantify. In addition, we anticipate any tailwind from these tariff changes will be more than offset by anticipated increases in commodity and related input costs.

Copper prices remain elevated, and oil, which impacts a wide range of material as well as logistics costs, also remains elevated and volatile. We continue to monitor these dynamics and will work diligently to mitigate the impacts as we have demonstrated in the past.

Turning to our segments, in our Plumbing segment, we continue to expect 2026 full-year sales to be up low single digits and our operating margin to expand to approximately 18%, driven by pricing discipline, operational efficiencies, and continued cost savings initiatives. In our Decorative Architectural segment, we continue to expect 2026 sales to be roughly flat with the prior year and our operating margin to be approximately 19%, with a continued focus on cost savings initiatives.

Finally, as John mentioned earlier, we are maintaining our 2026 EPS estimate of $4.10 to $4.30 per share. This now assumes a 200 million average diluted share count for the year versus our previous guide of 202 million shares, and a 24.5% effective tax rate.

Additional financial assumptions for 2026 can be found on slide 14 of our earnings deck. With that, I would like to open up the call for questions.

Operator?

Good morning, guys. Thanks for taking my questions.

The first one is just on the Section 232s. You said that this could be actually favorable, which seems right to us, but is this really driven by the fact that the product that you're importing, whether it's faucets or showerheads, are not entirely copper and that some of the subassemblies are done in the US?

How do you kind of wrap your arms around what this potential benefit could be?

Yeah. Hey, John, good morning, it's Rick.

With regards to our comments on the potential favorability on the tariff impacts, it's really a composite impact. It's not just the 232 tariffs, but it's the ruling on the IEEPA tariffs at the end of February, the imposition of Section 122 tariffs, and then of course the 232 tariffs to which you speak.

We look at it from a composite perspective. The 232 tariffs themselves are relatively nominal in terms of their net impact, but on composite, we expect a favorable impact.

In addition to the ones that we talked about in our opening comments, as you probably are aware, the administration is looking into a couple investigations on Section 301 tariffs as well. The environment remains uncertain.

We think on net-net, it'll be favorable for us for the year, but it's difficult to quantify just given the moving parts. As we also mentioned, we think any favorability will likely be offset by elevated commodity costs as we talked about.

That's helpful. Then your prior estimate was for consolidated pricing to be up low single digits with mid-single-digit pricing in plumbing and sort of flattish in Dec Arch.

How are you guys kind of thinking about this now, particularly with the move in resins since the conflict in the Middle East began?

With regards to our pricing expectations for the year, our plumbing expectation is mid-single digit. In terms of Dec Arch, it's really going to be dependent on where we end up from a commodity perspective.

We are seeing significant headwinds, given the elevated and volatile oil prices and the impact that it has really across the input spectrum and including freight costs as well, but certainly on the Dec Arch side with regards to resins, etc. We're seeing upward pressure in the neighborhood of mid to high single digits.

Obviously, that's still in discussions. That's something that we're tracking very closely.

I think from an overall company perspective, we would expect mid-single-digit inflation, and that's really commodities as well as run-of-the-way inflation as well. It's something that we're monitoring and managing very closely.

We do have a track record of offsetting and managing through these challenges, and we believe we'll do so here as well through a combination of levers. That's really the landscape.

A caveat is, as we all recognize, that it's still uncertain. There is upward pressure.

Thanks very much.

Thanks very much, guys. Appreciate it.

You just reiterated that you think that the changes in the tariffs will largely be offset by the commodity. Was wondering if you could give us just an overall estimate of how much that piece, which will be transferred effectively, will be for the year.

If there's a quarterly cadence to that that we should be mindful of.

Stephen, just to clarify your question, in terms of the transfer of costs, could you just elaborate? The offset.

The offset. You were basically saying that the tariff changes could be beneficial to you, but the commodity costs would be higher and that those pieces would effectively be offsetting, if I heard you correctly.

I'm just wondering how big is that piece, effectively?

We're not going to quantify the actual magnitude of it. I think on a net basis, you can think of them as relatively flat to potentially a headwind for us for the year, just given the extent of commodity inflation that we've seen really across many input costs, particularly copper and zinc, as well as oil-based inputs, particularly resins, etc.

We're basically tracking that, but I think at the end of the day, those commodity costs are going to offset the favorability or potentially more than that. In terms of your second question, quarterly cadence, this is largely a back half of 2026 phenomenon.

As I think we've described in the past, particularly on the plumbing side of the business, commodity costs, when they show up in the market, really have to flow through our inventory and then our P&L usually a couple quarters later. We saw elevated copper and zinc costs really as we entered into 2026, so that'll be more of a back-half '26 phenomenon.

As it pertains to oil and resin costs, that's a little bit more near-term because we've been seeing that as of late, and that's more of a quarter to two quarters out. It's really kind of as we approach mid-year in the second half of the year that we would see that impact.

That aligns up pretty cleanly with regards to our tariff favorability because the tariff favorability is largely driven by the IEEPA tariff ruling, and that occurred, as we all know, on February 20th, and so that takes some time to flow through our P&L as well. They tend to map pretty cleanly, but at the end of the day, there's still a lot of volatility out there, Stephen, as you recognize.

Great. That's actually a good cleanup.

Appreciate that. In the Dec Arch segment, your margins were stronger than we expected, and I was curious if you could give us some sense for the relative importance of the cost savings initiatives from restructuring versus pricing, and give us a sense for what's your expectation is about the quarterly cadence, because we typically see the margins rise in 2Q and 3Q from 1Q.

Is there anything that we should be mindful of that would be different this year than normal?

Hi, Stephen. It's John.

I'll jump in first, and then Rick can follow up with anything I miss here. I guess overall feel good about the trajectory that our paint business is on.

As we exited 2025 with a challenging year behind us, and we feel better about our performance. Again, we saw our business overall flat, with PRO paint growing mid-single digits, DIY down low single digits.

Feel great about the plans we have in place with our retail partner, and we'll continue to again, grow share with the PRO painter, which is a big opportunity for us and we've got a significant amount of headroom there, and then make sure that we continue to grow with DIY as well, where we have a significant share. In terms of margins, I would say, yes, they were up significantly versus last year.

They were much more normalized versus a typical Q1, though. We had an easy comp this year versus Q1 of last year, and we feel good about our ability to continue to manage our margins as we move forward.

I would say our restructuring actions are paying off, and particularly at our Behr business as we've taken significant steps to really streamline our cost structure and allow us to compete in a market that hasn't been growing the way that we'd like overall. I'll let Rick answer the question just on quarterly cadence, but hopefully that gives you a good perspective.

Stephen. John's comments were spot-on in terms of the implications on Q1.

I would just reinforce that the performance in Q1 was driven really based off of cost reduction actions that were in our control, including the restructuring actions that John alluded to. We did see some low-single-digit inflation in the commodity input costs, so that's something that we are mindful of and, as I mentioned earlier, are expected to increase over time.

That's something that we're tracking. I think in terms of our margin performance in Q1, it was largely in line with what we would have seen from a historical standpoint on a clean Q1.

Appreciate it, guys. Thanks.

Thank you.

Thanks, everyone. Congrats on the quarter here.

In plumbing, really nice beat versus expectations. I just wanted to perhaps unpack the plumbing volumes that you kind of put up during the quarter.

I know they were modest, but I believe there were some volume benefit there. Just wanted to double confirm that there wasn't anything one-time or any pull-forward in there around pricing that we should be mindful of.

Hi, Sam. This is John.

I would say the short answer is no. It was a pretty normalized quarter in terms of inventories.

We feel really good about our plumbing business and the performance that that team put up really around the world, where we saw our business grow nicely. Our North American business in particular, with Delta Faucet Company, had a terrific first quarter growing high single digits.

I think if you look at our beat versus our internal expectations for Q1, it was really plumbing and then primarily North American plumbing. The vast majority of that beat was really just volume versus expectations.

As you're aware, we took a fairly significant amount of pricing as we exited last year, and the team's done a terrific job really putting that pricing in place and navigating with our customers to have really good plans, and we saw our volume perform better than we would have expected from an elasticity standpoint. We feel like the fundamentals are incredibly strong.

We grew share across our channels. In fact, we grew in every channel across plumbing, whether it be wholesale, trade, or e-commerce.

We've got a great new product lineup, our marketing plans are strong, we feel really good about our plumbing business, and we'll continue to focus on it as we move through the rest of the year.

That's super helpful. Then maybe double-clicking on the plumbing price in a little bit more detail.

It sounds like the strength was widespread across all of your channels, but could you perhaps give us a little bit more color on whether there were any nuances between plumbing price, say, retail versus wholesale, wholesale versus e-com? Would just love maybe a view on how that plumbing price might have looked by channel.

Thanks.

Sam, this is John again. We typically don't get into that level of detail from a pricing standpoint.

I think suffice to say, though, if you look at our results, we executed our plans well from a pricing standpoint across all channels, given that we saw the price realization in the market that we had hoped for, and our elasticities weren't as severe as they could be. Again, we feel really good about how we navigated.

The performance was pretty consistent through all channels, and again, in North America, it was high single digits, which is terrific.

All helpful. Thanks so much.

Thank you.

Morning, everyone. Thank you for taking the questions.

Wanted to start on the growth guidance in plumbing. Obviously started the year at this 9% growth and still guiding the full year up low single digits, and so presumably, those pricing comps will get a lot tougher in the second half.

I guess that part is understood. You would still need a lot more deceleration either as soon as Q2 or perhaps even a negative comp at some point just to kind of hit that guide.

I guess the question is, should we be expecting that deceleration in growth is sort of already happening here in Q2, or are you just really building in a lot of conservatism around the volume side that you kind of think is prudent here to sort of get that type of deceleration? Thank you.

Hey,

you're welcome. This is John.

As I mentioned, really pleased with the performance in Q1. As we look to the remainder of the year, really it's the uncertainty that we see in the world around us that causes us to keep our guidance where it is.

Certainly had all the uncertainty prior to the war in Iran with tariffs and consumer sentiment, things like that. Then obviously the war adds a whole nother level of uncertainty.

We're looking at two things very closely: one, the demand environment and how are consumers purchasing across our markets. To date, we have not seen a meaningful change, but it's something that we're looking at very, very closely, and I think as the oil shock ripples through the economy, we have questions in terms of how the economy's going to perform.

Again, nothing to date that gives us pause, but we're going to continue to watch that closely. As Rick mentioned earlier, what we have seen certainly is the impact of inflation from the oil shock, particularly in petrochemicals and particularly in our Decorative Architectural business.

As Rick also mentioned, our team is really, I think, distinguished itself as being able to navigate through tough times and a dynamic environment, and we'll do everything that we can to offset that inflation by negotiating with our suppliers, looking at footprint, but ultimately, if we have to take price, we'll work to do that in a very efficient and effective way.

Got it. That's very helpful.

Secondly, shifting over to the Hansgrohe business. Question is on basically both demand and energy costs, specifically in Europe.

As the conflict began, the question is, have you sort of seen any changes either from a consumer perspective, sounded like Europe was still positive in the quarter, but anything changing on the margin around demand in Europe or just the energy costs related to natural gas in your business there? Any kind of color on how you expect that to play out.

Thank you.

You're welcome. I'd say similar to what we're seeing in North America, we haven't seen a dramatic change to date.

It's something we're obviously watching closely. We see commodity pressure in Europe just like we do in North America, and The Hansgrohe team's taking the initiatives to offset it.

Then from a demand standpoint, again, remember that Hansgrohe is really a global business. We like how Europe's holding up at this point.

China is no secret. It remains a challenging market from a new home construction standpoint and a building standpoint.

If anything, that's the market we continue to look at in terms of trends and looking to improve our trends in that market. Europe's hanging in there pretty well to date, feel good about Hansgrohe as well.

Great, thanks John. Good luck, guys.

Thank you.

Good morning and congrats on a strong quarter. Maybe just coming back to the full-year guidance, John or Rick, what is the right way to think about sort of what you are embedding as base case?

If the demand environment stay kind of where it is today, do you expect to be more sort of at the midpoint of the range? How should we think about that?

Ketan, good morning, it's Rick. With regards to our guidance, it's informed by all the information that we have to date with regards to what we're seeing in the marketplace, obviously the uncertainty in the macroeconomic and geopolitical environment, as well as from an earnings perspective, the tariff implications and the commodity implications that we've spoken to already.

At the end of the day, we feel confident in terms of delivering our results within the range, and without further input on that, I think you can comfortably assume that we'll end in the mid part of the range. From a top-line perspective, our guidance, we did increase our expectations for the year from flat to low single digits to up low single digits, we do expect growth on our top line this year from a total company perspective, driven primarily in our plumbing space.

From a bottom-line perspective, we do expect earnings growth and EPS expansion, and landing in the $4.10 to $4.30 range for the year.

Got it. No, that's helpful, Rick.

Just as a follow-up, on the capital allocation side, you moved the target higher to $800 million. Is it fair to say that you see bigger opportunity on sort of the share repurchase side or are you seeing kind of more M&A opportunity as well?

Fair question. As it pertains to the increase in our share repurchase expectations or availability for share repurchase or acquisitions, basically we saw an opportunity with regards to the strength of our balance sheet.

We've got a very healthy gross debt-to-EBITDA ratio or leverage ratio, and our confidence in our performance obviously demonstrated in Q1 and our confidence in our future performance, an opportunity to look at increasing the cash available for share repurchases from $600 million to at least $800 million. To enable to do that, we entered into, as I mentioned in my opening comments, a delayed draw term loan facility to enable that.

It's really going to be opportunistic. We like the flexibility that offers, and we like the opportunity in terms of the valuation that we're at today to be able to be opportunistic and leverage that.

We'll keep providing updates as we progress on each quarter, but right now we do expect increase in share repurchases from $600 million to $800 million plus, absent any M&A at this point.

Just reiterating, our capital allocation strategy hasn't changed. We continue to look at M&A, and as we've said before, bolt-on M&A is our focus.

If we find the right deal, we'll do it. As Rick mentioned, we just felt like this was a great opportunity because we have the ability to go out and borrow a bit more, and we frankly believe that our shares at our value right now where we believe that we're performing well, and we think we can continue to as we move into the future as well.

Perfect. That's very helpful.

I'll turn it over. Good luck.

Thank you.

Thank you.

Morning, thanks for taking my questions. I wanted to circle back to some of the cost and margin dynamics.

I think the question is if you look at this being kind of net neutral to less favorable in terms of costs and tariffs and a lot of uncertainty around the second half, I understand that historically you've had the ability to do things to offset this. When you have broad increases in inputs and global tariffs, it's a little harder to get those savings from shifting footprint unless I'm wrong about that.

In your guide, if that is potentially a net negative versus your initial assumption, what is the primary lever that you're relying on to offset that and giving you the confidence to still guide margins up in the back half?

Mike, good morning, it's Rick. Your understanding of the playing field is accurate in terms of our read of the fact that commodity and input costs are likely to be a headwind that exceeds the favorability on tariffs, and as I mentioned earlier, it is more of a back half of the 2026 dynamic.

In terms of the levers that we're looking at, it's really the same levers that we've been executing against already. Footprint, in terms of sourcing footprint, is still a lever that we're pulling, and that is really on track in terms of helping to mitigate the tariff impacts that we still are encountering.

It's also cost reductions. We've really executed well in terms of our cost savings initiatives, and of course the restructuring that we announced in our February call, and John alluded to earlier in his opening comments, that is really taking hold, and so that is amplifying our cost savings initiatives, and we're restructuring the business, reducing headcount, and optimizing operations, and so that's a huge lever for us, and we're going to continue to do that.

Then pricing, obviously we've been really effective at our execution on pricing, and although much of the pricing actions that we've been pursuing are implemented, there's still a lever that we're looking at selectively as we proceed during the course of the year. I would say overall, Mike, the levers remain the same, and we're going to continue to execute like we've done in the past, and we believe that the mitigation actions that we are executing and we intend to execute through the course of the year will be sufficient to allow us to mitigate the headwinds and allow us to deliver results comfortably within the guided range that we provided.

Great. Thanks for that, Rick.

That's helpful. Then shifting gears, I guess part of this might tie back to the capital allocation.

I did note that in your Q, you have a little bit of commentary about the potential to seek relief or refunds from previously paid tariffs, but that nothing has currently been done or contemplated. What can you articulate about your strategy in terms of seeking refunds, and does that tie in at all to kind of the expanded buyback guide, where if you do get some refunds, your inclination would be to return that back to shareholders, or how would you frame that?

Mike, this is John. I would say we think the refund process still has a lot of uncertainty in it, and so, if and when we get refunds, we'll obviously report what they might be and how we might handle them.

We are not banking on refunds, and it didn't really play any kind of in a role in our decision to take on the incremental debt that we talked about. Again, we're taking the steps necessary to protect our shareholders, and at the same time, it's still highly uncertain.

When we have something to report, we'll certainly do that.

Understood. Thanks, all.

Thank you.

Hi, good morning. Thank you for taking my questions.

I wanted to follow up on the restructuring actions. I think last quarter, you guys had talked about those being bigger impact to '27 and '28, but it sounds like you're seeing those come through this year as well and providing nice tailwinds.

Can you size for us what sort of benefit you're getting from the restructuring actions here in '26, and then how much larger does that become as you move into '27, '28?

Trevor, good morning, it's Rick. With regards to the restructuring actions, we're really pleased with the execution, both the true execution and the timing of our restructuring actions.

As we disclosed, we incurred about $8 million in Q1. We had incurred several million dollars in Q4 of last year, and we expect $50 million of restructuring costs for the calendar year, and those are on track.

We're starting to see those savings. We haven't quantified, nor do we intend to quantify the savings per se, because part of the savings are going to be redeployed in terms of growth initiatives, as well as helping us to expand our margins, and that's a contributing factor toward margin expansion this year.

You're absolutely right, the restructuring actions are going to be executed over the course of 2026, and so we'll see more of a full-year benefit as we move into '27 into '28, but we're going to be managing those cost savings and leveraging those, as I mentioned, to drive growth, as well as managing our margin expansion.

Thanks for that, Rick. Then second question maybe is related to that, then.

You guys have made some changes in your incentive comp structure recently. Looks like they'll be more focused on growth than you have been in the past.

Can you talk about that change, why you made the adjustment, and does that imply some shifting priorities for you guys in terms of growth moving forward?

Trevor, this is John. Maybe I'll jump in.

As I joined Masco last summer, it was clear to me Masco was a high-performing company. As I went and did a listening tour and talked to a lot of key constituents, the one thing I heard is that there's likely an opportunity for us to drive our top line a bit faster.

Don't take the focus off of margin, don't take the focus off of cash flow, the company's done a great job on that, but if you can continue to deliver the bottom line and grow a little bit faster, it's probably a benefit to everyone. We've been focused on doing just that.

We're taking actions across the board, including the structure of our Executive Committee to bring some external expertise in areas that we believe that we can benefit, see some additional savings. We're standing up centers of excellence around things like digital marketing and e-commerce, commercial excellence, all in the pursuit of helping to not only grow the bottom line, but also grow our top line a bit more quickly.

Then certainly, incentive is important, we did make a change to change the weights in terms of how we incent our teams, and I would say profit's still the largest percentage of the pie. We've balanced it out a little bit to make sure that we have the appropriate focus on top line as well.

I'm really pleased with the progress we're making. I'm pleased that we were able to grow the way we did in Q1, and again, our goal over time is to be able to do that consistently.

Thank you for all the color. Good luck moving forward.

Thank you. Thanks, Trevor.

Hey, everyone. Good morning.

Nice quarter. I guess just on the margin piece, you talked about first half margins now being flattish year-over-year, which would still imply some margin pressure in 2Q.

Do you expect both segments to see margin pressure next quarter?

Adam, good morning, it's Rick. In terms of our margin expectations, you're right in terms of our updated guide for the first half of the year is flat margins.

Given the fact that we had expanded margins in Q1, it does imply margin contraction in Q2. I would just remind you that Q2 of 2025, last year's quarter, we really weren't impacted by tariffs quite significantly at that point in time, and we had a very strong quarter with regards to 20% margin.

It's a challenging quarter from a year-over-year perspective. We do expect a very solid quarter in Q2.

From a margin contraction perspective, I'm not going to comment on the segments per se, but overall, we do expect some margin contraction, but we do expect to deliver a very strong quarter in Q2.

Got it. Thanks.

Then I think you guys alluded to maybe some incremental price actions. Couple questions, would that be in both segments, and would that exist or happen if kind of commodity costs stay where they are today, or would you need to see more commodity inflation to then think about raising prices further?

Adam, it's John. I guess I would say we're not going to talk about prospective price advances.

I just would probably tell you to look at history here, though, the recent history in terms of how we've approached things. Pricing is the last resort for us.

We start with negotiating with our suppliers, changing our footprint where possible, taking costs out of our own system. If the need is there, I think our team has proven that they can take pricing very effectively and efficiently and do it in a way that benefits not only the bottom line, but doesn't harm the top line as well.

We'll continue to monitor things. Again, as we talked before, I'd say the one surprise for us so far this year has been the impacts on petrochemicals and particularly on our Decorative Architectural business, so that's an area that we have a lot of focus.

We're spending a lot of time with our suppliers to negotiate the best deals we can, and then ultimately, we'll work with our retail partner in terms of how we prospective move forward. Just know that we've had good practice over the last few years given all that dynamic environment and feel really confident the team can navigate as we move forward.

Great. Thanks.

Best of luck.

Thanks, Adam.

Hey, guys. Congrats on a really impressive quarter.

I guess to kind of kick things off, John, I think volumes for plumbing came in, as you pointed out, better than you expected. Is that a more resilient consumer, maybe better price elasticity?

Can you tease out if there's any share gains of note that drove some of that? Help us kind of think through where I guess plumbing would have surprised and it sounds like it's been pretty resilient thus far.

Phil. Good morning.

We're really pleased with plumbing. As I mentioned, globally we grew, which is great.

I would say, again, versus expectations, it was really North America that we saw the beat, and as I mentioned, the vast majority of that beat versus our expectations was volume. I would say our Delta team is firing on all cylinders right now.

They've got great marketing plan for the year, they've got terrific new products that they've launched, our vitality rate continues to increase year-over-year, our commercial plans with our key customers are incredibly strong as well. That team continues to perform.

Then when you break it down across channels, we grew high single digits in North America across each of the channels, wholesale, e-commerce, and retail. That's tricky to do, and the team is hyper-focused on building strong plans at each of our customers.

We do feel like we're taking some share, and at the same time, I think executed pricing in a really effective way that we didn't see the elasticity maybe that we would have modeled out beforehand, and I think it's again a testament to strong execution. The last thing I would add is we continue to see strength in our upper-premium and luxury segment of the market, where we have brands such as Brizo and Axor and Newport Brass.

The high-end consumer definitely seems to be hanging in there strong, and we see really strong margins in that segment as well. Feel great about the performance, and feel good about the plans we have in place for the rest of the year as well.

Gotcha. Just kind of teasing off that, I guess for plumbing, for perhaps Rick, you guys kept your guidance for up low-single-digit top-line growth.

It sounds like there was nothing of note for 1Q and volumes were up. It sounds like things are pretty resilient.

Could that be a source of upside, or are you kind of expecting volumes to kind of decline in the back half, perhaps just given some of the macro dynamics that is out there? Just want to kind of think through some of the puts and takes there on the demand side.

Sure, Phil. As it pertains to that, as John mentioned and we talked before, Q1 was a really strong quarter.

We're very pleased with our results. The consumer, in terms of our business, is holding in there.

The uncertainty is something that we're continuing to track, both on the macro and geopolitical. Consumer confidence is a bit challenged.

As it pertains to the fundamentals of our business, they're strong. The only thing I would point to from a first-half versus second-half perspective is we started to take pricing from a tariff mitigation standpoint in the second half of 2025, and so we'll lap that as we get to the middle of the year.

As evidenced by our Q1 pricing of 6% in Q1, we won't see that type of year-over-year comp in the second half of the year. That's part of the dynamic, just mechanically, but we still feel pretty confident.

Obviously, we're hopeful that there is upside relative to our expectations, but at this point, we're guiding at low single digit in terms of growth for the year.

Okay. Thank you.

Really appreciate the color, guys.

Thanks, Phil.

Thanks, Phil.

Hi, thanks. Good morning, everyone.

Thanks for taking my questions. Wanted to shift the focus to decorative, and the sales were flat, still better than what we were looking for, down low single digits.

Was hoping to get a sense of DIY versus PRO and the different drivers there and where things might be if it's indeed the case, maybe coming in a little stronger, if you're seeing any momentum, similar to what you've seen in plumbing, and how you might contrast the sales momentum that you've seen in plumbing versus what you're seeing in decorative across, again, DIY versus PRO on the paint side. Hey

Mike, good question. It's John.

Our sales for the quarter were flat. Clearly, that was a better performance than what we saw in Q4 of 2025 and really most of 2025.

When you break it down, we saw PRO continue to grow mid-single digits. DIY was down low single digits.

We feel good about the plans we have in place. I do believe that DIY is going to remain pressured when you look at that business.

It's highly correlated with existing home sales, and obviously existing home sales remain pressured. As a result, we're putting strong plans in place.

We're going to focus on the great quality that we provide at the best value in the industry, really make sure that that's playing through, and feel good about our plans with our retail partner. The PRO side is where we continue to see a tremendous amount of opportunity.

That's where the growth has been over the last longer period of time. We have a relatively small share in that space as well.

We've grown our share by 200 basis points over the last few years, we're continuing to invest to take friction out of the experience for PROs. Whether that be order online, pick up at the store, or order online, have it delivered to the job site, we continue to hire both inside and outside sales reps to develop those PRO relationships.

I can tell you that The Home Depot has that same exact laser focus on the PRO as well. I think we hope to see incremental progress as we move throughout the year.

It will remain a tough DIY market, we believe, for the short term, but feel really good about the plans we have in place and the trajectory that we're heading on.

Great. No, that's helpful.

I know at the risk of beating this one to death a little bit, but I think it's going to be a big topic over the next month or two around the strength in plumbing, particularly the volume side. You just highlighted the fact that you've seen that strength across different channels in North America, a lot of success in your execution.

Notwithstanding maybe being a little more conservative in the back half for various reasons, and I presume you'll also hit on this at your Analyst Day next month, but are we to think about, let's say, the share gains that you've been able to achieve in the first quarter as sustainable, and are there parts of the market that maybe you see an opportunity where this share gain dynamic can persist throughout this year into 2027, 2028? Just trying to get a sense of the sustainability and the performance, and if there's anything that shifted within the market, either on the customer side or from your competitors out there that lead you to believe that this share gain dynamic can persist on a let's say on a medium-term basis.

Mike, good question. As I mentioned, we feel terrific about what our team has delivered in Q1, particularly in North America.

We don't take anything for granted. Our competitors are strong, there's good brands out there, and it's a dynamic environment.

We're going to keep playing our game, keep focused on building our brands, innovating, and then executing at a high level. If we do that, we believe that we'll continue to be strong as we move forward.

As I mentioned earlier, the big question mark for us is just what happens with the end consumer, and a couple months ago, we clearly talked about it being uncertain times and a lot of dynamic environment, and obviously since the conflict in the Middle East, it's taken it to a whole new level. We believe that we're just being prudent in terms of, hey, let's wait and see what happens and how it plays out with consumers.

As we mentioned before, we are starting to see some inflation work through. If there's any caution, it's just that.

Certainly these are very uncertain times that we'll continue to monitor in terms of what we can control. I feel great what our teams are doing.

I feel we have very clear line of sight into our plans for the rest of the year, and I expect our performance to be strong, certainly versus the category, and ultimately, the category, how that performs with all this uncertainty, is the thing that we're watching.

Great, thanks. Best of luck.

Thanks, Mike.

Good morning.

Morning, Anthony.

Hey, just following up on plumbing, can you give any additional color on the growth you saw in Watkins and the opportunity or the TAM there? I think you flagged Delta and Watkins as your strongest growers, is Watkins growing maybe similar to Delta, or is it growing faster off a lower base?

Is there any product set or brand within Watkins that's really driving the strength?

Anthony, it's John. We feel, as we've talked about, great about Watkins and the opportunity.

Watkins did grow in Q1. We're going to get into a lot more detail at our Investor Day next month in New York City, we'll walk you through the TAM, we'll walk you through the opportunities that we see.

What I would tell you is that hot tubs are our biggest business, and we've liked the momentum, we're the share leader in that space across North America. Where we're seeing outsized growth is really in sauna, which only has 1% household penetration in the US today.

It's very much front and center in the wellness movement, and we're seeing just a lot of demand for that product. We grew nicely from a Watkins standpoint in Q1.

We'll give you a lot more details next month when we get together.

Great, great. Then I guess, given the rise in diesel and gas prices, I'm wondering if you've historically seen a real sensitivity between gasoline prices and consumer spending for your products.

I guess I'm thinking specifically about DIY paint and maybe some of the smaller ticket items. It seems like you haven't seen that so far, but I'm just wondering if that's something historically that's moved the business.

Anthony, it's Rick. It's tough to single out a particular driver, I think.

What we watch, generally speaking, is consumer sentiment, as well as the overall health of the economy. Higher oil prices, as we all recognize, is generally a headwind to consumer confidence, is generally a headwind to disposable income.

It's a headwind in terms of input costs. Those are things that we're monitoring closely, and that's one of the reasons that gives us caution and why we're prudent with regards to our expectations as we move out through the course of the year.

Again, the fundamentals of the business, as John articulated, are really strong. We're pleased with the execution of what we've been doing here at Masco and across our business units.

Oil prices is something that is a headwind, but it's more how it manifests itself in terms of consumer confidence, etc. For us, in terms of our products, they tend to be lower ticket R&R items, they tend to be more resilient in these types of environments, but nonetheless, we're not immune to it, but it's something that we'll continue to monitor and track as we progress through the course of the year.

Great, that's very helpful. I'll turn it over.

Thank you. Good morning, everyone.

Thanks for taking the questions.

Morning.

I want to talk about the longer-term growth path. With the changes in leadership that you announced this week, you now have the heads of those four key businesses reporting directly to you, John.

Can you talk about what that means in terms of your ability to drive growth over time and how the Executive Committee is focused on some of these items and what that will mean for Masco?

Sue, great question. As I mentioned before, as I came into Masco, I heard that the top-line growth was something that probably was an opportunity, something for us to focus on.

Then, as I took a step deeper in terms of feedback, the other thing I heard is just our ability to move with pace and be agile is probably the other area to focus on. With the Executive Committee, we're trying to do the two things: one, make sure that we have the right experts in terms of our centers of excellence and deep functional knowledge where it matters.

We announced just earlier this week that we're bringing in a Chief Procurement Officer who has 30 years of experience in the space and will be able to help us bring the most modern capabilities as we move forward, which we feel great about. Also with the Executive Committee, really trying to streamline the organization to have more frequent communication, allow us to make decisions more quickly and move with pace.

With the new organization, essentially I've removed a layer, and with that, we think that our speed and agility will increase even more. We talk as an Executive Committee, we meet once a week.

I can tell you I talk to my direct reports many more times than that, and I think with the world around us and the pace that we're seeing, it's really important that we have the organization that's set up to read and respond and deliver to consumers and customers what they expect from us.

That's great color. Then, despite the moving parts around inventories and costs, you're still targeting to get that working capital down to about 16.5% of sales this year.

Can you just talk through some of the pieces in there and how we should think about that coming together?

Sure, Sue, it's Rick. Part of the reason our working capital is higher than it typically is this time of year or has been for the last several months is because of the implications of tariffs.

The higher tariff costs, and commodity costs, quite frankly, that bleed into our inventory and receivables have elevated our working capital, and the shorter payment terms on the tariff bills or invoices also reduces our payables. There's a overarching tariff dynamic that has been at play.

We'll see that normalize as we get into the second half of the year. The team is very focused on managing not only cost, but also working capital.

That's something that we'll continue to execute on, and once we get through the normalization of the tariff implications the second half of the year, we should be able to execute towards a working capital that's more in line with our historical average, and we've guided towards 16.5%.

Okay. Thank you.

Good luck with the quarter.

Great, thanks, Sue.

Hi, good morning. Thanks for taking my questions.

Just the outperformance in plumbing volume in the first quarter in North America, how much would you attribute to just broader consumer resilience and the category holding up relative to your market share outperforming what you were expecting going into the quarter? Rafe, so,

again, I'm not sure we'll quantify it to the level of detail you're looking for. I think the category performed fairly well.

I am very confident we also took market share. As I mentioned, I believe that we're firing on all cylinders right now and really strong plans in place across each of our channels, each of our customers.

Just leave it as probably a bit of both, but if I had to say which one was the bigger driver, I would say probably our market share gains.

Great, that's helpful. Then, in terms of the input cost inflation and what you're expecting, can you talk about what's either copper prices embedded in guidance for the second half of the year or should we be assuming that copper prices stay where they are today?

Sort of just what are you assuming to get to the full-year guidance?

Sure, Rafe, it's Rick. We're not going to disclose a specific assumption in our outlook, but suffice it to say, I would assume that where we have been recently, particularly as we closed out 2025, is a pretty reasonable place to be.

Obviously, it's volatile in that nature. I think as we sit at $6 or above $6 per pound, that is something that represents a bit of a headwind to us, but it's a volatile environment.

At the end of the day, as I've mentioned before, we're not only monitoring the situation, but we're proactively taking actions from a cost reduction standpoint, from an efficiency standpoint, and as necessary, a pricing standpoint to mitigate those impacts, whether they're copper, oil inputs, tariffs, etc., to be able to deliver the results that we've guided to for the year.

That's it. That's really helpful.

Thank you.

Yep.

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.