Mohawk Industries (MHK) Q4 2025 earnings summary

Executive summary

• Q4 2025 net sales reached $2.7 billion, up 2.4% as reported but down 3.3% on a constant basis year-over-year, with adjusted EPS at $2.00 and adjusted net earnings of $124 million.

• Full-year 2025 sales were $10.8 billion, flat year-over-year; adjusted EPS was $8.96, down 7.5%, and adjusted net earnings were $559 million.

• Free cash flow for 2025 was $621 million, with $150 million spent on share repurchases; Q4 free cash flow was ~$265 million.

• Commercial segments outperformed residential, with strength in healthcare, education, and hospitality.

• Housing turnover and consumer confidence remained weak due to affordability, inflation, and geopolitical tensions.

Financial highlights

• Q4 2025 adjusted gross margin was 24.3%; adjusted operating margin was 5.6%; adjusted EBITDA was $301 million.

• Q4 operating income was $68 million (2.5% margin) as reported; adjusted operating income was $152 million (5.6% margin).

• Net debt at year-end 2025 was $1.17 billion; net debt to adjusted EBITDA improved to 0.9x.

• Cash and cash equivalents at year-end were $856 million; inventories at $2.7 billion.

• Net cash from operating activities for 2025 was $1.06 billion; capital expenditures were $435 million.

Outlook and guidance

• Q1 2026 adjusted EPS expected between $1.75 and $1.85, with market conditions similar to Q4.

• 2026 sales and earnings anticipated to improve, driven by sales initiatives, product innovation, and operational improvements, but dependent on economic and housing market recovery.

• Full-year 2026 tax rate forecasted at 18.5%-19.5%.

• CapEx planned at $480 million for 2026, focused on innovation, cost reduction, and maintenance.

• Recent restructuring initiatives expected to generate $60–70 million in savings in 2026.