Home-building design and manufacturing company Masco Corporation (NYSE: MAS) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 3.3% year on year to $1.92 billion. Its non-GAAP profit of $0.97 per share was 5.7% below analysts’ consensus estimates.

Is now the time to buy MAS? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

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.

Looking forward, Masco’s revised outlook reflects management’s expectation of continued tariff-related cost headwinds and softer demand across key segments. CEO Nudi stated that, while structural factors for home repair and remodeling remain supportive in the long term, current uncertainties around geopolitical developments and industry volumes will likely persist. The company plans to continue pursuing cost reduction, sourcing changes, and targeted pricing actions to offset these pressures. However, CFO Richard Westenberg cautioned that the company’s ability to fully mitigate tariff impacts and restore operating margins will depend on external factors and the success of ongoing mitigation strategies.

Key Insights from Management’s Remarks

Management pointed to several operational and market-specific factors influencing both quarterly performance and the revised full-year outlook, emphasizing tariff impacts and evolving end-market trends.

• Tariff and Cost Pressures: Elevated tariffs, particularly a 145% temporary tariff on certain China imports, significantly increased costs for the plumbing segment. CFO Richard Westenberg described these tariffs as a "relatively volatile and dynamic environment," and noted that mitigation efforts such as sourcing changes and pricing were underway, but did not fully offset the impact in Q3.
• DIY Paint Weakness: The DIY paint category experienced continued softness, linked to historically low existing home sales. CEO Nudi explained that "DIY Paint correlates heavily to existing home sales," and that weak turnover suppressed demand, despite ongoing innovation within the Behr brand.
• PRO Paint and E-Commerce Strength: While DIY paint lagged, the PRO paint business continued to grow, with Masco leveraging its close partnership with The Home Depot to expand its offering for professional contractors. E-commerce channels for plumbing products, especially Delta Faucet, saw notable growth, helping to partially offset retail weakness.
• Segment-Specific Challenges: Decorative architectural sales were negatively affected by shipment timing changes in the builders hardware business, while international plumbing faced headwinds in China due to local market challenges and increased competition from domestic brands. Hansgrohe remained strong in Europe, particularly Germany.
• Cost Mitigation Efforts: Across both business segments, Masco continued to drive productivity improvements through the Masco operating system, cost reductions, and automation. Management also highlighted ongoing efforts to shift sourcing away from higher-tariff regions and to exercise pricing discipline as needed.

Drivers of Future Performance

Masco’s outlook is shaped by persistent tariff headwinds, subdued repair and remodel activity, and ongoing cost mitigation initiatives across its segments.

• Tariff Mitigation and Sourcing: Management is aggressively pursuing sourcing changes to reduce exposure to elevated tariffs, especially from China, where import volumes have been cut by 45% since 2018. The company expects these efforts, combined with targeted pricing increases, to gradually restore operating margins, though full mitigation will depend on future tariff developments and supply chain adjustments.
• End-Market Recovery Timing: Masco’s forward guidance assumes that both U.S. and international repair and remodel markets will remain soft in the near term. CEO Nudi emphasized that a rebound is likely contingent on factors such as improved consumer confidence, lower interest rates, and a recovery in existing home sales—all of which would drive demand for both DIY and PRO paint, as well as plumbing products.
• Product Innovation and Portfolio Mix: The company continues to invest in new product development, particularly in luxury and sustainability-focused offerings. Management believes that innovation in categories like water filtration and plant-based paints, alongside expansion in e-commerce and high-end segments, will help Masco capture share and position the business for growth once market conditions improve.

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 $65.29, down from $68.41 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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