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Masco's Q1 Earnings Beat Estimates on Pricing & Cost Savings, Stock Up
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Key Takeaways
Masco reported first-quarter EPS of $1.05, up 20.7% YoY, beating estimates by 19.3%.
MAS sales rose 6.5% to $1.92B, driven by Plumbing Products growth and pricing actions.
Margins expanded on cost savings, while $267 million was returned via buybacks and dividends.
Masco Corporation (MAS - Free Report) reported exceptional first-quarter 2026 financial performance with earnings and net sales beating the Zacks Consensus Estimate and growing year over year.
Performance benefited from pricing actions and cost-savings initiatives, which helped offset higher tariff and commodity costs. Another notable highlight was the company’s continued commitment to shareholder returns through sizable repurchases during the quarter.
MAS stock gained 7.2% during today’s pre-trading hours following the earnings release.
Masco’s Q1 Earnings & Sales
The first-quarter 2026 earnings of $1.05 per share rose 20.7% from 87 cents a year ago and came in 19.3% above the Zacks Consensus Estimate of 88 cents.
Net sales of $1.918 billion increased 6.5% year over year and topped the consensus mark of $1.839 billion by 4.3%.
Masco Corporation Price, Consensus and EPS Surprise
Net sales in the North American region grew 5% (in local currency) from the prior year, while International sales inched up 1% year over year in local currency.
MAS’ Operating Margin Expands on Pricing Actions
MAS posted an operating profit of $316 million, up 10% from the prior-year quarter, while operating margin improved 60 basis points (bps) to 16.5%. On an adjusted basis, operating profit rose 13% to $324 million, and adjusted operating margin expanded 90 bps to 16.9%.
Profitability also held firm at the gross line. Reported gross margin was steady year over year at 35.8%, while adjusted gross margin improved 10 bps to 36%. On the cost side, selling, general and administrative expenses were 19.1% of net sales on an adjusted basis, improving from 19.9% a year ago, reflecting operating discipline in a fast-moving macro and tariff backdrop.
Masco’s Plumbing Products Lead the Quarter
Masco’s Plumbing Products segment led the top-line gain. Segment net sales increased 9% to $1.364 billion (up from our model’s projection of $1.22 billion). Adjusted operating profit improved to $250 million, and adjusted operating margin edged up to 18.3%, supported by pricing actions and cost savings initiatives, partially offset by higher tariff and commodity costs.
The Decorative Architectural Products segment was steadier on sales but meaningfully stronger on profitability. Segment net sales were $554 million, essentially flat year over year (down from our model’s projection of $609.3 million). The company cited PRO paint growth in the mid-single digits and a low-single-digit decline in DIY paint. Even with those mixed volume signals, adjusted operating profit rose to $105 million, and adjusted operating margin expanded 320 bps to 19%, helped by cost savings and increased pricing.
MAS’ Capital Returns Remain a Major Feature
MAS continued to prioritize capital allocation. During the quarter, it repurchased 3.1 million shares for $202 million and paid $65 million in cash dividends, which management said drove a total return of $267 million to shareholders through dividends and share repurchases.
Liquidity remained solid at quarter's end. Cash and cash investments were $388 million, and total liquidity was $1.261 billion, including $873 million of revolver availability.
In cash flow, operating activities provided $289 million, but working capital changes used $368 million, resulting in net cash used for operating activities of $79 million. Separately, the company’s gross debt to EBITDA was 2.1X as of March 31, 2026, while working capital as a percentage of the last 12-month sales was 19.5%.
Masco Maintains Its 2026 Earnings Range
Masco kept its full-year 2026 earnings outlook unchanged. It continues to expect earnings per share in the range of $3.91-$4.11 and adjusted earnings per share in the band of $4.10-$4.30. Management framed the decision as a prudent stance, given ongoing macroeconomic and geopolitical volatility.
The company also outlined key planning assumptions underpinning its full-year view. These included a 24.5% tax rate, about $190 million of capital expenditures, roughly $160 million of depreciation and amortization and approximately $50 million of rationalization charges. Masco also expects to deploy at least $800 million toward share repurchases or acquisitions in 2026 and plans around an average diluted share count of about 200 million, with free cash flow conversion targeted near 95% and working capital near 16.5% of net sales.
D.R. Horton (DHI - Free Report) delivered second-quarter fiscal 2026 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. The quarter was marked by an 11% jump in net sales orders and progress in tightening finished inventory, even as affordability constraints kept incentives elevated.
D.R. Horton updated fiscal 2026 consolidated revenue guidance to $33.5-$34.5 billion compared with the prior expectation of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025. It now expects homebuilding closings of 86,000-87,500 homes compared with the earlier guidance of 86,000-88,000. This compares with 84,863 in fiscal 2025.
KB Home (KBH - Free Report) reported first-quarter fiscal 2026 results. The company’s quarterly earnings came in line with the Zacks Consensus Estimate, while total revenues missed the same. Both metrics decreased on a year-over-year basis.
For the second quarter of fiscal 2026, KB Home is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.52 billion reported in the year-ago period. It expects deliveries to be in the range of 2,250-2,450 homes compared with 3,120 homes delivered in the year-ago period.
Lennar Corporation (LEN - Free Report) reported tepid results for the first quarter of fiscal 2026, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate and declined year over year.
For the fiscal second quarter, Lennar expects deliveries to be in the range of 20,000-21,000 homes compared with 20,131 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $370,000-$375,000, down from $389,000 reported a year ago.
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Masco's Q1 Earnings Beat Estimates on Pricing & Cost Savings, Stock Up
Key Takeaways
Masco Corporation (MAS - Free Report) reported exceptional first-quarter 2026 financial performance with earnings and net sales beating the Zacks Consensus Estimate and growing year over year.
Performance benefited from pricing actions and cost-savings initiatives, which helped offset higher tariff and commodity costs. Another notable highlight was the company’s continued commitment to shareholder returns through sizable repurchases during the quarter.
MAS stock gained 7.2% during today’s pre-trading hours following the earnings release.
Masco’s Q1 Earnings & Sales
The first-quarter 2026 earnings of $1.05 per share rose 20.7% from 87 cents a year ago and came in 19.3% above the Zacks Consensus Estimate of 88 cents.
Net sales of $1.918 billion increased 6.5% year over year and topped the consensus mark of $1.839 billion by 4.3%.
Masco Corporation Price, Consensus and EPS Surprise
Masco Corporation price-consensus-eps-surprise-chart | Masco Corporation Quote
Net sales in the North American region grew 5% (in local currency) from the prior year, while International sales inched up 1% year over year in local currency.
MAS’ Operating Margin Expands on Pricing Actions
MAS posted an operating profit of $316 million, up 10% from the prior-year quarter, while operating margin improved 60 basis points (bps) to 16.5%. On an adjusted basis, operating profit rose 13% to $324 million, and adjusted operating margin expanded 90 bps to 16.9%.
Profitability also held firm at the gross line. Reported gross margin was steady year over year at 35.8%, while adjusted gross margin improved 10 bps to 36%. On the cost side, selling, general and administrative expenses were 19.1% of net sales on an adjusted basis, improving from 19.9% a year ago, reflecting operating discipline in a fast-moving macro and tariff backdrop.
Masco’s Plumbing Products Lead the Quarter
Masco’s Plumbing Products segment led the top-line gain. Segment net sales increased 9% to $1.364 billion (up from our model’s projection of $1.22 billion). Adjusted operating profit improved to $250 million, and adjusted operating margin edged up to 18.3%, supported by pricing actions and cost savings initiatives, partially offset by higher tariff and commodity costs.
The Decorative Architectural Products segment was steadier on sales but meaningfully stronger on profitability. Segment net sales were $554 million, essentially flat year over year (down from our model’s projection of $609.3 million). The company cited PRO paint growth in the mid-single digits and a low-single-digit decline in DIY paint. Even with those mixed volume signals, adjusted operating profit rose to $105 million, and adjusted operating margin expanded 320 bps to 19%, helped by cost savings and increased pricing.
MAS’ Capital Returns Remain a Major Feature
MAS continued to prioritize capital allocation. During the quarter, it repurchased 3.1 million shares for $202 million and paid $65 million in cash dividends, which management said drove a total return of $267 million to shareholders through dividends and share repurchases.
Liquidity remained solid at quarter's end. Cash and cash investments were $388 million, and total liquidity was $1.261 billion, including $873 million of revolver availability.
In cash flow, operating activities provided $289 million, but working capital changes used $368 million, resulting in net cash used for operating activities of $79 million. Separately, the company’s gross debt to EBITDA was 2.1X as of March 31, 2026, while working capital as a percentage of the last 12-month sales was 19.5%.
Masco Maintains Its 2026 Earnings Range
Masco kept its full-year 2026 earnings outlook unchanged. It continues to expect earnings per share in the range of $3.91-$4.11 and adjusted earnings per share in the band of $4.10-$4.30. Management framed the decision as a prudent stance, given ongoing macroeconomic and geopolitical volatility.
The company also outlined key planning assumptions underpinning its full-year view. These included a 24.5% tax rate, about $190 million of capital expenditures, roughly $160 million of depreciation and amortization and approximately $50 million of rationalization charges. Masco also expects to deploy at least $800 million toward share repurchases or acquisitions in 2026 and plans around an average diluted share count of about 200 million, with free cash flow conversion targeted near 95% and working capital near 16.5% of net sales.
MAS’ Zacks Rank & Recent Construction Releases
Masco currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton (DHI - Free Report) delivered second-quarter fiscal 2026 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. The quarter was marked by an 11% jump in net sales orders and progress in tightening finished inventory, even as affordability constraints kept incentives elevated.
D.R. Horton updated fiscal 2026 consolidated revenue guidance to $33.5-$34.5 billion compared with the prior expectation of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025. It now expects homebuilding closings of 86,000-87,500 homes compared with the earlier guidance of 86,000-88,000. This compares with 84,863 in fiscal 2025.
KB Home (KBH - Free Report) reported first-quarter fiscal 2026 results. The company’s quarterly earnings came in line with the Zacks Consensus Estimate, while total revenues missed the same. Both metrics decreased on a year-over-year basis.
For the second quarter of fiscal 2026, KB Home is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.52 billion reported in the year-ago period. It expects deliveries to be in the range of 2,250-2,450 homes compared with 3,120 homes delivered in the year-ago period.
Lennar Corporation (LEN - Free Report) reported tepid results for the first quarter of fiscal 2026, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate and declined year over year.
For the fiscal second quarter, Lennar expects deliveries to be in the range of 20,000-21,000 homes compared with 20,131 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $370,000-$375,000, down from $389,000 reported a year ago.