Masco (MAS) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 2% year-over-year to $2.09 billion, mainly due to lower paint volumes and unfavorable plumbing mix, but operational excellence and a strong repair and remodel product portfolio drove margin expansion.

• Adjusted EPS grew 1% to $1.20 per share, with gross margin improving 140 bps to 37.6% and operating profit margin reaching 19.1%.

• Returned $206 million to shareholders in Q2 via $143 million in share repurchases and $64 million in dividends; liquidity at quarter-end was $1.4 billion.

• Full-year adjusted EPS guidance narrowed to $4.05–$4.20, with operating margin guidance raised to 17–17.5%.

• Management expects ongoing demand headwinds in H2 but remains confident in long-term strategy and market fundamentals.

Financial highlights

• Q2 2024 net sales: $2.09 billion, down 2% year-over-year; gross profit increased by $16 million, gross margin expanded to 37.6%.

• Adjusted operating profit was $399 million, with a margin of 19.1%.

• Net income attributable to Masco was $258 million ($1.17 per diluted share) for Q2 2024.

• Free cash flow remained strong, supporting $206 million in shareholder returns via dividends and buybacks in Q2.

• Working capital as a percent of sales was 18.4% as of June 30, 2024.

Outlook and guidance

• 2024 adjusted EPS expected in the range of $4.05–$4.20, assuming 220 million diluted shares and a 24.5% tax rate.

• Full-year operating margin guidance raised to 17–17.5%.

• Sales expected to be within plus or minus low single digits for the year, with H2 sales guided to be roughly flat.

• Plumbing segment sales expected to be plus or minus low single digits; operating margin raised to ~19%.

• Decorative architectural segment sales now expected down low single digits; operating margin maintained at ~18%.