The Top 5 Analyst Questions From Mohawk Industries’s Q1 Earnings Call

Mohawk Industries faced a challenging start to 2025, as revenue came in below Wall Street expectations and the market responded with a modestly negative reaction. Management pointed to continued soft market conditions across residential remodeling and new construction, alongside the effects of new U.S. tariffs impacting imported luxury vinyl tile (LVT). CEO Jeff Lorberbaum highlighted that, despite these headwinds, cost reductions and restructuring initiatives helped offset some pricing and input cost pressures. He noted, “Our premium collections and differentiated products we launched in 2024 generated above-market results,” but also acknowledged a cautious consumer backdrop and persistent pricing pressure in key markets.

Is now the time to buy MHK? Find out in our full research report (it’s free).

Mohawk Industries (MHK) Q1 CY2025 Highlights:

• Revenue: $2.53 billion vs analyst estimates of $2.55 billion (5.7% year-on-year decline, 0.9% miss)

• Adjusted EPS: $1.52 vs analyst estimates of $1.41 (8.2% beat)

• Adjusted EBITDA: $267.9 million vs analyst estimates of $269.9 million (10.6% margin, 0.7% miss)

• Adjusted EPS guidance for Q2 CY2025 is $2.57 at the midpoint, below analyst estimates of $2.80

• Operating Margin: 3.8%, down from 5.5% in the same quarter last year

• Organic Revenue fell 2.5% year on year (-4.8% in the same quarter last year)

• Market Capitalization: $6.42 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 Mohawk Industries’s Q1 Earnings Call

• John Lovallo (UBS) asked about the timing and offsetting actions for the $50 million tariff impact. CFO James Brunk explained the impact would phase in late Q3 and Q4 due to inventory cycles, with price increases and supply chain adjustments planned to mitigate effects.

• Matthew Bouley (Barclays Investment Bank) pressed on balancing pricing power with a promotional environment. CEO Jeff Lorberbaum said tariff costs are being passed through via pricing actions, but acknowledged that category mix and alternatives like laminate may see increased demand as LVT prices rise.

• Rafe Jadrosich (Bank of America) questioned the ability to grow earnings per share given new cost headwinds. Brunk and Lorberbaum said achieving growth would depend on macro stability, effective tariff offsets, and realization of restructuring savings.

• Collin Verron (Deutsche Bank) inquired about underlying Flooring North America trends, excluding system conversion effects. President Paul De Kock noted commercial business strength and market share gains from differentiated products, while expressing cautious optimism about sustaining these trends.

• Tim Wojs (Baird) sought clarity on the scale of competitive price increases and potential for Mohawk to leverage its domestic capacity for share gains. Management said announced price hikes are around 8% so far, but full impacts are still being determined as market conditions evolve.

Catalysts in Upcoming Quarters

Going forward, our team will closely monitor (1) the pace and effectiveness of tariff-related price increases across product categories, (2) the realization of restructuring and productivity savings, and (3) demand trends in commercial versus residential channels. We will also watch for signs of normalization in housing activity and consumer sentiment, as well as the impact of energy and raw material cost movements on margins.

Mohawk Industries currently trades at $103.35, down from $106.58 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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