Masco Corporation MAS posted weaker-than-expected results for the first quarter of 2025, with both earnings and revenues falling short of the Zacks Consensus Estimate. On a year-over-year basis, the company reported declines across both metrics.
The disappointing performance comes against the backdrop of a challenging macroeconomic and geopolitical environment, notably the imposition of new, far-reaching tariffs. To address rising cost pressures, Masco is implementing a series of strategic responses, including pricing adjustments, cost-saving initiatives and shifts in sourcing.
Citing ongoing uncertainty around how these external developments will affect industry-wide demand, pricing dynamics and input costs, management has refrained from providing full-year 2025 financial guidance.
Inside MAS’ Headlines
The company reported adjusted earnings per share (EPS) of 87 cents, missing the Zacks Consensus Estimate of 92 cents by 5.4%. In the year-ago quarter, it reported an adjusted EPS of 93 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Masco Corporation Price, Consensus and EPS Surprise
Masco Corporation Price, Consensus and EPS Surprise
Net sales of $1.8 billion missed the consensus mark of $1.84 billion by 1.9% and declined 6% from the prior-year period. Excluding divestitures, net sales declined 3% year over year in local currency.
Net sales in the North American region slipped 7% (in local currency) from the prior year. Internationally, the metric remained flat in local currency.
Masco’s Segmental Analysis
Plumbing Products: Net sales in the segment declined 1% year over year to $1.18 billion. Currency had a minimal impact on the net sales value. North American sales inched up 2% year over year, while International sales remained flat in local currency.
The adjusted operating margin contracted 60 basis points (bps) year over year to 18.5% on account of unfavorable mix and trade show costs. Adjusted EBITDA during the quarter came in at $245 million compared with $255 million reported in the prior-year quarter.
Decorative Architectural Products: The segment reported sales of $617 million, down 16% from the prior-year period. In local currency and after excluding divestitures, the segment’s net sales decreased 8% year over year. Total paint sales decreased in mid-single digits. PRO paint sales increased in the mid-single digits, but DIY paint sales decreased in high-single digits.
Adjusted operating margin contracted 140 bps from the prior-year level to 15.6%, driven by lower volume. Adjusted EBITDA came in at $103 million compared with the prior-year figure of $134 million.
Margin Performance of MAS
Adjusted gross margin during the quarter expanded 20 bps from the prior-year level to 35.9%. Adjusted selling, general and administrative expenses — as a percentage of net sales — were up 80 bps to 19.9% from the year-ago figure of 19.1%.
Adjusted operating margin contracted 70 bps on a year-over-year basis to 16%. The downside was due to lower volume and higher marketing costs. Adjusted EBITDA during the quarter came in at $322 million compared with $360 million reported in the prior year quarter.
MAS’ Q1 Financials
As of March 31, 2025, Masco had a total liquidity of $1.246 billion, compared with $1.31 billion as of March 31, 2024. This includes cash and cash investments of $377 million, and revolver availability of $869 million. Long-term debt as of the first quarter came in at $2.95 billion, flat from 2024-end.
During the reported period, the company repurchased 1.8 million shares for about $130 million. It returned $66 million to its shareholders in the form of dividends.
MAS’ Zacks Rank & Recent Construction Releases
Masco currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton, Inc. DHI reported dismal second-quarter fiscal 2025 (ended March 31, 2025) results, with earnings and total revenues missing Zacks Consensus Estimate and decreasing on a year-over-year basis.
D.R. Horton now expects consolidated revenues to be in the range of $33.3-$34.8 billion, down from the previously expected range of $36-$37.5 billion. This compares with $36.8 billion in fiscal 2024. Homes closed are anticipated to be within 85,000-87,000 homes, down from the previously expected range of 90,000-92,000 units. This compares with 89,690 homes closed in fiscal 2024.
KB Home KBH reported lackluster fiscal first-quarter 2025 results. The quarter’s earnings and total revenues missed the Zacks Consensus Estimate and tumbled year over year.
KB Home’s results reflect the softness in the housing market as homebuyers are still navigating through affordability concerns due to high mortgage rates. Besides, the ongoing macroeconomic uncertainties and other regulatory changes in the country are adding to the instability of the housing market. Owing to these market uncertainties and a lower net order level at the end of the quarter, KB Home lowered its fiscal 2025 guidance.
Lennar Corporation LEN reported first-quarter fiscal 2025 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top line increased, but the bottom line declined.
Lennar’s performance was impacted by a challenging macroeconomic environment. Although demand remained strong, higher interest rates, inflation and weak consumer confidence made homeownership less accessible. A limited supply of affordable homes added to the difficulties, leading to a decline in the company's average sales price. Moving forward to fiscal 2025, to counter the market uncertainties, Lennar aims to focus on its volume-based strategy to drive sales and implement an asset-light, land-light business model.
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