Mohawk Industries (MHK) investor relations material

Executive summary

• Net sales for Q2 2026 reached $2,991.4 million, up 6.8% year-over-year, driven by volume growth, favorable price/mix, and foreign exchange rates.

• Adjusted EPS was $3.67, including a $0.63 benefit from tariff refunds; net earnings attributable to the company rose to $196.1 million, with adjusted net earnings at $223 million.

• Over 600,000 shares were repurchased for $60 million during the quarter.

• Leadership transition announced: CEO retirement and succession by the COO, with the outgoing CEO remaining as chairman.

• New restructuring actions in 2026 target $60 million in annualized cost reductions by end of 2027, requiring $50 million in restructuring costs.

Financial highlights

• Q2 2026 gross profit was $795.1 million, with gross margin at 26.6% as reported and 27.4% adjusted, up year-over-year.

• Adjusted operating income was $290.1 million (9.7% of sales), up 170 bps year-over-year; operating income increased 34.4% to $253.7 million.

• Free cash flow for Q2 2026 was $228.2 million; year-to-date free cash flow was $236 million.

• Net debt as of July 4, 2026, was $1,066.9 million, with a net debt to EBITDA ratio of 0.8x.

• Cash and cash equivalents as of July 4, 2026, were $849.6 million.

Outlook and guidance

• Q3 2026 adjusted EPS expected between $2.50 and $2.60, including $0.12 from additional tariff refunds; baseline EPS range excluding one-time items is $2.38–$2.48.

• Anticipates seasonally lower sales in Q3, with higher input costs and continued productivity efforts.

• Additional price increases may be required if inflation persists.

• Management expects continued softness in U.S. and European housing markets but sees potential support from stable employment and housing shortages.

• Additional restructuring costs of $50–$60 million are expected through 2027.