Masco’s first quarter results missed Wall Street’s expectations, driven by ongoing softness in the do-it-yourself (DIY) paint market and volume declines in its decorative architectural segment. Management cited consumer caution and macroeconomic headwinds as key factors, particularly impacting retail channels and DIY paint sales. CEO Keith Allman described the environment as “highly uncertain,” noting persistent demand pressures. He also highlighted strong performance in the company’s pro paint and plumbing segments, with share gains in e-commerce and international plumbing markets. Allman’s acknowledgment of market volatility and Masco’s operational response set a cautious tone for the quarter.
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Masco (MAS) Q1 CY2025 Highlights:
- Revenue: $1.8 billion vs analyst estimates of $1.84 billion (6.5% year-on-year decline, 2% miss)
- Adjusted EPS: $0.86 vs analyst expectations of $0.91 (5.5% miss)
- Operating Margin: 15.9%, in line with the same quarter last year
- Organic Revenue fell 2.6% year on year (-3.8% in the same quarter last year)
- Market Capitalization: $12.85 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 Masco’s Q1 Earnings Call
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Michael Dahl (JPMorgan) asked about monthly sales trends and whether DIY paint softness would persist. CEO Keith Allman noted ongoing weakness in DIY, stability in pro paint, and tentative consumer sentiment, especially in retail channels.
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Stephen Kim (Evercore ISI) pressed on price elasticity and the risk that price increases to offset tariffs could depress demand. CFO Rick Westenberg acknowledged this is “uncharted territory,” and Masco is balancing pricing with cost reductions, but cannot precisely predict volume impacts.
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Sam Reid (Wells Fargo) inquired about new build channel strategy and whether higher tariffs would change Masco’s pricing approach for builders versus retail. Allman reiterated Masco’s focus on repair and remodel, with selective new build exposure, and emphasized value through brand and service rather than just price.
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Anthony Pettinari (Citi) asked about progress in diversifying Masco’s sourcing footprint and the potential for further reductions in China exposure. Westenberg highlighted a 45% reduction since 2018 and ongoing acceleration of sourcing changes, while maintaining a strong U.S. manufacturing presence.
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John Lovallo (UBS) questioned the normalization of channel inventory levels and the impact of higher marketing costs. Westenberg noted some inventory normalization and attributed higher marketing expenses primarily to trade show participation, which is expected to be a first-quarter phenomenon.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) Masco’s ability to execute planned price increases and cost reductions to offset tariff pressures, (2) ongoing shifts in consumer demand between DIY and professional paint segments, and (3) the pace of sourcing diversification away from China. Progress on these fronts, as well as successful integration of new leadership, will be important indicators of Masco’s resilience.
Masco currently trades at $60.90, in line with $61.34 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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