Masco Shares Gain On Q1 Beat, Raised FY22 Guidance

  • Masco Corp MAS reported first-quarter FY22 net sales growth of 12% year-over-year to $2.2 billion, beating the consensus of $2.06 billion.
  • In local currency, North American sales increased 14% Y/Y, and international sales increased 12% Y/Y.
  • The gross margin contracted by 350 bps to 32%. The operating income decreased by 3% Y/Y to $353 million, and the margin contracted by 250 bps to 16%. The operating margin contracted by 240 bps to 16.2% on an adjusted basis.
  • Adjusted EPS increased to $0.95 (+7% Y/Y), beating the consensus of $0.85.
  • Plumbing Products sales were $1.36 billion (+9% Y/Y), and an adjusted operating margin of 16.8%, down 350 bps.
  • Decorative Architectural Products sales were $842 million (+17% Y/Y), and an adjusted operating margin of 18.8% vs. 19.7% in 1Q21.
  • Adjusted EBITDA decreased by 4.7% Y/Y to $390 million, and margin contracted by 304 bps to 17.7%.
  • As of March 31, 2022, the company's liquidity stood at $1.216 billion. It held cash and equivalents of $479 million.
  • FY22 Outlook: MAS expects adjusted EPS of $4.15 - $4.35 (prior expectation of $4.10 - $4.30) vs. consensus of $4.18.
  • Price Action: MAS shares are trading higher by 4.38% at $55.04 on the last check Wednesday.
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