Masco’s third quarter was marked by a negative market reaction following results that missed Wall Street’s revenue and earnings expectations. Management attributed the underperformance to a combination of elevated tariffs, commodity cost pressures, and ongoing industry softness, particularly in the company’s plumbing and DIY paint categories. CEO Jonathon Nudi specifically highlighted the impact of a 145% temporary tariff on China imports, which increased costs by $15 million during the quarter, and noted that DIY paint demand remained weak due to low existing home turnover. While Masco’s teams implemented mitigation efforts, the quarter was ultimately affected by an unfavorable macroeconomic environment and unexpected inventory-related adjustments.
Is now the time to buy MAS? Find out in our full research report (it’s free for active Edge members).
Masco (MAS) Q3 CY2025 Highlights:
- Revenue: $1.92 billion vs analyst estimates of $1.95 billion (3.3% year-on-year decline, 1.5% miss)
- Adjusted EPS: $0.97 vs analyst expectations of $1.03 (5.7% miss)
- Adjusted EBITDA: $349 million vs analyst estimates of $369.6 million (18.2% margin, 5.6% miss)
- Management lowered its full-year Adjusted EPS guidance to $3.93 at the midpoint, a 1.9% decrease
- Operating Margin: 15.8%, down from 18% in the same quarter last year
- Organic Revenue fell 1.7% year on year vs analyst estimates of flat growth (133.4 basis point miss)
- Market Capitalization: $13.08 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Masco’s Q3 Earnings Call
- Stephen Kim (Evercore ISI) asked about the impact of upcoming competitor price increases in paint and how Masco’s relationship with The Home Depot influences pricing decisions. CEO Jonathon Nudi explained that pricing is managed collaboratively with the retailer and significant price hikes in paint are not expected in the near term.
- Matthew Bouley (Barclays) questioned whether any unexpected costs, beyond tariffs, impacted plumbing margins in Q3. CFO Richard Westenberg clarified that, in addition to anticipated tariff impacts, higher-than-typical inventory-related reserves and softer sales in China contributed to margin pressure.
- Michael Rehaut (JPMorgan) sought more detail on which business segments were driving the lower end of full-year sales guidance. Westenberg responded that softness was relatively broad, affecting plumbing (especially in China), builders hardware, and DIY paint, with overall industry trends weaker than earlier anticipated.
- Trevor Allinson (Wolfe Research) asked about input cost inflation rates in plumbing. Westenberg indicated that copper and other metals drove low single-digit inflation, a trend expected to persist into the next quarter.
- Eric Bosshard (Cleveland Research) inquired about strategic options to drive growth in DIY paint given ongoing weakness. Nudi highlighted a focus on brand messaging, value, and innovation, including plant-based products, as primary levers to stimulate demand.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be tracking (1) the pace and effectiveness of Masco’s tariff mitigation strategies, including sourcing shifts and further pricing actions, (2) the trajectory of DIY and PRO paint demand as existing home sales and consumer confidence evolve, and (3) the success of new product launches in luxury faucets, water filtration, and sustainable paints. Updates on international performance, particularly in China, and progress toward margin recovery will also be important indicators.
Masco currently trades at $63.40, down from $68.41 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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