Oct 28, 2026 earnings call — Masco raises guidance and reports margin improvement
Masco raised 2026 EPS guidance to $4.65 to $4.75 and raised operating margin outlook to 18% to 18.5%.
Revenue $2.0B (est $1.9B) · EPS $1.19 (est $1.02)
Key quotes
"Plumbing Products sales increased 4%, or 5% excluding the impacts of our divestiture of Bristan and unfavorable currency."
"Our strong PRO paint performance continued, with sales increasing mid-single digits in the quarter."
"Our strong cash performance enabled us to return $322 million to shareholders through dividends and share repurchases in the third quarter."
Analyst Q&A 13
targeted investments and demand trends
Q (Matthew Bouley · Barclays): Asked about plans and timing for strategic investments from tariff refunds and whether Q3 showed early benefits; also asked if demand is changing by channel and how that informs Q4 revenue outlook.
A: Management said the investment program is underway but still early and will be deployed over multiple quarters. They said they have not seen significant momentum changes and expect Q4 sales to grow low single digits, noting repair and remodel is less rate-sensitive.
"So to answer your question, it's still early days." — Richard Westenberg (CFO)
input cost inflation and Q4 EPS moves
Q (Ketan Mamtora · BMO): Asked why EPS seems to drop more than usual from Q3 to Q4 and what drives that change, and asked what inflation expectations are as we exit Q4.
A: Management said Q4 is seasonally weaker but they still expect year-over-year revenue growth, with Decorative roughly flat and Plumbing stronger. They expect mid-single-digit input cost inflation for the year in both segments.
"So in terms of our inflationary expectations, in Q3, we experienced mid-single-digit inflation from input costs in both of our segments, and we expect that for the year in its totality." — Richard Westenberg (CFO)
Plumbing Q3 margin drivers
Q (Richard Reid · Wells Fargo): Asked what drove third-quarter Plumbing EBIT and whether any one-offs, tariff effects, or pulls of volume affected the result; also asked how the margin compared to internal expectations.
A: Management said the quarter was driven by pricing, cost saves and lower tariff costs year-over-year, with volume and mix largely a wash and no meaningful one-offs. They said performance was stronger than they expected coming into the year and the guidance raise was driven by operations.
"All that said, I would say in terms of Q3 this year, relatively clean quarter in terms of our performance." — Richard Westenberg (CFO)
drivers of Plumbing strength and CTO hire
Q (Michael Rehaut · Melius): Asked what is driving the stronger Plumbing sales and channel gains, and asked what the new CTO/AI Officer will focus on—internal efficiency, e-commerce, or both.
A: Management said Plumbing momentum comes from strong brands, innovation and share gains across trade, e-commerce and retail. They said the new CTO/AI Officer will build a center of excellence focused on the consumer and also look at manufacturing, procurement and logistics improvements.
"He's assessing where we are and working to put plans in place to make sure that we keep advancing." — Jonathon Nudi (CEO)
Watkins wellness business and China
Q (Anthony Pettinari · Citi): Asked for an update on Watkins (spas and saunas) trends and how higher-income consumer spending is tracking; and asked about International plumbing, especially China, and Q4 expectations.
A: Management said Watkins wellness (spas and saunas) shows good momentum and benefits from a secular trend, with saunas still low penetration but growing. For International plumbing they said year-to-date up 1%, China is a headwind, and they expect similar performance into Q4 while aiming to accelerate global brands over time.
"We feel really good about the underlying business in our wellness business, both with spas and saunas." — Jonathon Nudi (CEO)
working capital and capital allocation
Q (Susan Maklari · Goldman Sachs): Asked about working capital progress and priorities for capital allocation, plus any change in the M&A pipeline given the macro.
A: Management said working capital is tracking seasonally and they expect 16.5% of sales by year-end. They reiterated the capital allocation priorities (invest in business, maintain credit rating, 30% payout dividend, then buybacks or M&A) and said bolt-on M&A pipeline remains active.
"From a working capital perspective, really consistent with prior year in terms of where we're at from a seasonality standpoint this year." — Richard Westenberg (CFO)
Decorative Architectural outlook and Europe share
Q (Trevor Allinson · Wolfe): Asked if Dec Arc can return to growth next year given PRO outperformance and if share gains in North America extend to Europe.
A: Management said flat Dec Arc is progress but they want more growth and have momentum in PRO via service, convenience and marketing; they are taking actions on DIY too (ChatHUE color tool). They said they are also gaining share in Europe and deploying the same brand and digital strategies there.
"We believe we have the best quality at the best price." — Jonathon Nudi (CEO)
M&A interest and strategy
Q (John Lovallo · UBS): Asked about interest in factory-applied wood coatings or moves outside core categories, and how M&A fits strategy.
A: Management said they prefer bolt-on deals inside existing categories and have a high bar for adding new legs outside core areas; they will evaluate opportunities but plan to stay focused on bolt-on acquisitions.
"I think we'll stay clear to what we've been guiding, which is bolt-on acquisitions will be the focus moving forward." — Jonathon Nudi (CEO)
DIY paint demand vs existing home sales
Q (Stephen Kim · Evercore): Asked how much DIY paint demand correlates with existing home sales versus maintenance-driven repainting, and whether paint usage per home is changing.
A: Management said paint demand correlates most strongly with existing home turnover because people sell and repaint or repaint after moving in. They said DIY will stay challenged until existing home sales recover, and they must make shopping easier and emphasize Behr's value.
"By far, the item that correlates the highest is existing home turnover." — Jonathon Nudi (CEO)
raw cost lag and pricing timing
Q (Margaret Grady · Jefferies): Asked about the lag from raw material price moves to the P&L and how that informs pricing and mitigation next year.
A: Management said Plumbing has roughly a two-quarter lag and Decorative about a one-quarter lag for commodity cost pass-through, giving them time to observe market moves. They said they use sourcing, cost reductions and pricing as levers to mitigate inflation.
"So as we've described before, that really our lag, as you articulated, for Plumbing is really a 2-quarter lag, roughly speaking." — Richard Westenberg (CFO)
Plumbing price vs volume contribution
Q (Keith Hughes · Truist): Asked how much of Plumbing's strong domestic quarter came from price versus volume and which channels led the domestic 8% growth.
A: Management said pricing contributed 5% year-over-year to Plumbing in Q3 and volume/mix was roughly a wash overall. They said North American Plumbing sales were up 8% and growth was balanced across trade, retail and e-commerce.
"As it pertains to Q3, we indicated in our prepared remarks that pricing for Plumbing was a 5% contributor on a year-over-year basis." — Richard Westenberg (CFO)
Q4 margin inflection and levers vs inflation
Q (Michael Dahl · RBC): Asked why margins might inflect in Q4 despite strong year-to-date performance, and which levers they expect to use against inflation next year.
A: Management said Q4 margin dynamics reflect higher commodity and employee costs offsetting sales and cost reduction efforts, so operating profit is expected roughly in line year-over-year. They reiterated they focus first on footprint optimization and cost actions, using pricing as a last, precise lever if needed.
"And as articulated earlier, that's a trade-off between slightly increased sales on a year-over-year basis and cost reduction efforts." — Richard Westenberg (CFO)
freight cost impact
Q (Adam Baumgarten · Vertical Research Partners): Asked what upside they see in freight and how much freight represents of total COGS.
A: Management said freight costs are elevated inbound and outbound due to fuel, they watch it closely and include freight in their mid-single-digit input inflation metrics, but they do not disclose freight as a percent of COGS.
"We haven't articulated the proportion of COGS that represents for Masco." — Richard Westenberg (CFO)