Home improvement firm Masco misses quarterly revenue estimates on weak demand

Masco

29/10/2024 11:57

Oct 29 (Reuters) - Masco  MAS.N  missed Wall Street
estimates for third-quarter revenue on Tuesday, as customer
spending on home improvement and building products remained
strained.
    
    WHY IT IS IMPORTANT
    Spending on home renovation activities has taken a backseat
as consumers continue to prioritize buying essential items in
the face of still-high inflation. Besides, the housing market is
still grappling with high mortgage rates, hurting demand for
home improvement companies such as Masco.
    
    MARKET REACTION
    Shares of the Livonia, Michigan-based company, which makes
showerheads, kitchen accessories and paints, fell about 2% to
$79.95 in premarket trading. They have risen 22% so far this
year.
    
    KEY QUOTE
    "For the remainder of the year, we expect market demand to
remain challenged," said CEO Keith Allman.
    
    CONTEXT
    Masco has also implemented price hikes to combat both rising
labor-related costs in its plumbing products such as faucets and
bath hardware and low volumes in the decorative architectural
products, including Behr Paint and Liberty Hardware brands.
    
    BY THE NUMBERS
    Adjusted earnings per share at $1.08 for the quarter ended
Sept. 30, in line with analysts' average estimate, according to
data compiled by LSEG.
    Third-quarter gross margins fell 100 basis points to 36.6%,
hurt by costs related to supply-chain disruptions and efforts to
combat competition through marketing.
    Sales at Masco's plumbing products segment, a major revenue
contributor, rose 2%, while decorative architectural products
saw a 3% decline.
    Quarterly net sales at $1.98 billion, compared with
estimates of $2 billion.
    Masco expects its 2024 adjusted earnings per share to be
between $4.05 and $4.15, compared with its prior range of $4.05
to $4.20.

 (Reporting by Neil J Kanatt in Bengaluru; Editing by Shilpi
Majumdar)
 ((Neil.JKanatt@thomsonreuters.com))