In This Article:
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Revenue: $2.5 billion, a decrease of 5.7% as reported.
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Earnings Per Share (EPS): $1.52 adjusted, $1.15 reported.
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Gross Margin: 23.1% as reported, 24.1% excluding charges.
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Operating Income: $96 million or 3.8% as reported; 4.8% adjusted operating margin.
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Interest Expense: $6 million for the quarter.
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Tax Rate: Approximately 18% non-GAAP for the quarter.
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Global Ceramic Sales: Just over $990 million, a 4.9% decrease as reported.
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Flooring North America Sales: $862 million, a decrease of 4.2% as reported.
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Flooring Rest of the World Sales: $670 million, an 8.8% decrease as reported.
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Free Cash Flow: Use of approximately $85 million in Q1.
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Inventory Levels: Just over $2.6 billion, increased by approximately $80 million.
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Capital Expenditures (CapEx): $89 million for Q1.
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Net Debt: $1.7 billion with a leverage of 1.2 times.
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Mohawk Industries Inc (NYSE:MHK) reported earnings per share of $1.52, benefiting from productivity gains, restructuring actions, and a lower tax rate.
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The company purchased 225,000 shares of its stock for approximately $26 million, indicating confidence in its financial health.
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Mohawk Industries Inc (NYSE:MHK) has a substantial domestic operation, which is advantageous as tariffs increase, particularly in producing ceramic tile, carpet, laminate, sheet vinyl, LVT, and quartz countertops.
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The company is implementing restructuring projects expected to generate approximately $100 million in savings this year.
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Mohawk Industries Inc (NYSE:MHK) is expanding its relationships with homebuilders across the country, yielding higher sales in both carpet and hard surfaces.
Negative Points
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Sales for the quarter were just over $2.5 billion, a 5.7% decrease as reported, impacted by two fewer shipping days and unfavorable foreign exchange rates.
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The company faces pricing pressure due to low capacity utilization across the industry and competitive markets.
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Tariffs are expected to incur annualized costs of approximately $50 million, which the company plans to address through price increases and supply chain adjustments.
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Residential remodeling remains under pressure due to low housing turnover, elevated interest rates, and weakening consumer confidence.
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Global economic uncertainty, including the war in Ukraine and inflation concerns, is leading to postponed home sales and remodeling activities in Europe.
Q & A Highlights
Q: How will the $50 million annualized cost impact from tariffs be managed throughout 2025, and what strategies will be used to offset this impact? A: James Brunk, CFO, explained that the impact will be more pronounced in the late third and fourth quarters due to the FIFO accounting system. The company plans to offset the costs through pricing actions and supply chain adjustments, having already stopped importing from China and shifting to other suppliers and regions.