Mohawk Industries (MHK) investor relations material

Executive summary

• Q2 2025 net sales were $2.8B, flat year-over-year, with operational improvements, productivity gains, and cost containment actions supporting results amid challenging market conditions.

• Adjusted EPS was $2.77, with net earnings down year-over-year due to higher input costs and lower sales volume, partially offset by restructuring and favorable FX.

• Free cash flow was ~$125M; 393,000 shares repurchased for ~$42M; new $500M share repurchase authorization approved.

• Restructuring actions are on track, targeting ~$100M in annual cost savings in 2025 through operational streamlining and technology investments.

• Industry faces continued pricing pressure and soft demand, with commercial channels outperforming residential.

Financial highlights

• Q2 2025 gross margin was 25.5% as reported, 26.4% adjusted, down year-over-year due to higher input costs and lower volume, partially offset by productivity and FX.

• Adjusted operating income was $223M (8.0% margin), down from $257M (9.2%) prior year.

• Adjusted EBITDA for Q2 2025 was $371M (13.3% margin), down from $406M (14.5%) prior year.

• Cash and equivalents at $547M as of June 28, 2025; net debt at $1.65B; net debt to adjusted EBITDA at 1.2x.

• Q2 CapEx was $80M; 2025 CapEx projection reduced to ~$500M, focused on cost reduction and innovation.

Outlook and guidance

• Q3 2025 adjusted EPS expected between $2.56 and $2.66, excluding restructuring or one-time charges.

• Fourth quarter results anticipated to improve year-over-year, driven by easing inflation, price increases, stronger mix, and restructuring benefits.

• Guidance does not include potential impact from new tariffs, which remain uncertain.

• Restructuring actions expected to deliver ~$100M in cost savings for 2025; additional $10M annual savings from new actions at a $20M cost.

• Full-year tax rate forecasted at approximately 19%.