Mohawk Industries (MHK) investor relations material

Executive summary

• Q2 2026 net sales reached $3.0 billion, up 6.8% year-over-year, with adjusted EBITDA of $437.2 million and adjusted EPS of $3.67, including a $0.63 benefit from tariff refunds.

• Net earnings attributable to the company were $196 million, with adjusted net earnings of $223 million, both significantly above prior year due to volume growth, pricing, and product mix improvements.

• Share repurchases exceeded 600,000 shares for $60 million during the quarter.

• New cost-reduction and restructuring projects targeting $60 million in annual savings by end of 2027, requiring $50 million in restructuring costs.

• Leadership transition announced: CEO retiring, COO to assume CEO role effective September 30, 2026.

Financial highlights

• Q2 2026 gross profit was $795.1 million, with adjusted gross margin at 27.4% (up 100 bps YoY); adjusted operating income was $290.1 million (9.7% margin), up 170 bps YoY.

• Adjusted EBITDA for Q2 2026 was $437.2 million (14.6% margin), up from $371.4 million (13.3%) in Q2 2025.

• Free cash flow for Q2 2026 was $228.2 million; net debt as of July 4, 2026, was $1,066.9 million, with net debt/EBITDA at 0.8x.

• SG&A expenses improved to 18.1% of sales (reported) and 17.7% (adjusted).

• Effective tax rate for Q2 2026 was 21.0% (Q3 expected at ~22%).

Outlook and guidance

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

• Anticipates seasonally lower sales in Q3, with commercial outperforming residential; higher input costs expected to persist into Q4, possibly requiring further price increases.

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

• Long-term outlook anticipates robust growth post-downturn, driven by housing supply deficits, aging homes, and deferred remodeling.

• Planned capital expenditures for 2026 are approximately $460 million, focused on capacity expansion and cost reduction initiatives.