second quarter 2026
Filed Jul 29, 2026Masco Corporation reports second quarter 2026 net sales of $1,992 million, operating profit of $470 million, and adjusted earnings per share of $1.64.
Sales declined 3 percent, but gross margin, operating profit, operating margin and earnings per share increased sharply. The company raised adjusted 2026 earnings per share guidance following an anticipated net benefit from IEEPA tariff refunds.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| 2026 adjusted earnings per share | $4.10 to $4.30 per share | $1.64 | n/a |
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $1,992 million | – | decreased 3 percent |
| Cost of salesGAAP | $1,124 million | – | – |
| Gross profitGAAP | $868 million | – | – |
| Gross marginGAAP | 43.6 % | – | increased 600 basis points |
| Selling, general and administrative expensesGAAP | $397 million | – | – |
| Selling, general and administrative expenses as a percent of net salesGAAP | 19.9 % | – | – |
| Operating profitGAAP | $470 million | – | increased 14 percent |
| Operating marginGAAP | 23.6 % | – | increased 350 basis points |
| Interest expenseGAAP | $(28) million | – | – |
| Other, netGAAP | $(2) million | – | – |
| Income before income taxesGAAP | $440 million | – | – |
| Income tax expenseGAAP | $107 million | – | – |
| Net incomeGAAP | $333 million | – | – |
| Net income attributable to noncontrolling interestGAAP | $15 million | – | – |
| Net income attributable to Masco CorporationGAAP | $318 million | – | – |
| Net income per common share attributable to Masco Corporation (diluted)GAAP | $1.60 | – | increased 25 percent |
| Average diluted common shares outstandingGAAP | 199 million | – | – |
| Gross profit, as adjustednon-GAAP | $872 million | – | – |
| Rationalization charges in gross profitnon-GAAP | $5 million | – | – |
| Gross margin, as adjustednon-GAAP | 43.8 % | – | increased 610 basis points |
| Selling, general and administrative expenses, as adjustednon-GAAP | $390 million | – | – |
| Selling, general and administrative expenses as a percent of net sales, as adjustednon-GAAP | 19.6 % | – | – |
| Operating profit, as adjustednon-GAAP | $482 million | – | increased 17 percent |
| Rationalization charges in operating profitnon-GAAP | $12 million | – | – |
| Operating margin, as adjustednon-GAAP | 24.2 % | – | increased 410 basis points |
| Income before income taxes, as adjustednon-GAAP | $452 million | – | – |
| Tax at 24.5% ratenon-GAAP | $(111) million | – | – |
| Net income, as adjustednon-GAAP | $326 million | – | – |
| Net income per common share, as adjustednon-GAAP | $1.64 | – | increased 26 percent |
| Six-month net salesGAAP | $3,910 million | – | – |
| Six-month gross profitGAAP | $1,553 million | – | – |
| Six-month gross marginGAAP | 39.7 % | – | – |
| Six-month operating profitGAAP | $787 million | – | – |
| Six-month operating marginGAAP | 20.1 % | – | – |
| Six-month net income attributable to Masco CorporationGAAP | $531 million | – | – |
| Six-month net income per common share attributable to Masco Corporation (diluted)GAAP | $2.64 | – | – |
| Six-month gross profit, as adjustednon-GAAP | $1,563 million | – | – |
| Six-month gross margin, as adjustednon-GAAP | 40.0 % | – | – |
| Six-month operating profit, as adjustednon-GAAP | $807 million | – | – |
| Six-month operating margin, as adjustednon-GAAP | 20.6 % | – | – |
| Six-month net income, as adjustednon-GAAP | $537 million | – | – |
| Six-month net income per common share, as adjustednon-GAAP | $2.67 | – | – |
Year Ended December 31, 2026 outlook
- NoteEarnings per share: $4.21 - $4.41 per share
- NoteAdjusted earnings per share: $4.40 - $4.60 per share
Capital returns
- Returned $454 million to shareholders through dividends and share repurchases.
What drove it
- Currency had a minimal impact on net sales.
- Plumbing Products’ net sales decreased 3 percent.
- Decorative Architectural Products’ net sales decreased 4 percent.
- In local currency, North American sales decreased 5 percent and International sales increased 4 percent.
- The company recognized a net benefit of approximately $95 million from IEEPA tariff refunds in the quarter.
- Results reflected a challenging comparison to the prior year and targeted strategic investments to support growth.
Concerns
- Net sales decreased 3 percent to $1,992 million.
- North American sales decreased 5 percent in local currency.
- Selling, general and administrative expenses increased to $397 million from $361 million, and selling, general and administrative expenses as a percent of net sales increased to 19.9 % from 17.6 %.
- The macroeconomic and geopolitical environments remain volatile.
- The anticipated full year net benefit from IEEPA tariff refunds was approximately $85 million, below the approximately $95 million net benefit recognized in the quarter.
What to watch
- Delivery of adjusted earnings per share in the range of $4.40 - $4.60 per share for the year ended December 31, 2026.
- Residential repair and remodel activity and, to a lesser extent, new home construction.
- North American and International sales trends in local currency.
- The impact on demand, pricing and product costs resulting from tariffs.
- Whether gross-margin expansion is sustained as the company continues targeted strategic investments to support growth.
Balance sheet and cash flow
- Liquidity at the end of the second quarter was $1,548 million (including availability under our revolving credit facility).
Analysis
Masco reported a solid second quarter despite lower sales. Net sales decreased 3 percent to $1,992 million, with a minimal currency impact. Both reported segments declined, as Plumbing Products’ net sales decreased 3 percent and Decorative Architectural Products’ net sales decreased 4 percent. In local currency, North American sales decreased 5 percent, while International sales increased 4 percent.
Profitability improved substantially. GAAP gross margin increased 600 basis points to 43.6 %, while adjusted gross margin increased 610 basis points to 43.8 %. GAAP operating profit increased 14 percent to $470 million and adjusted operating profit increased 17 percent to $482 million. Reported operating margin rose 350 basis points to 23.6 %, and adjusted operating margin rose 410 basis points to 24.2 %.
Earnings growth outpaced sales performance. GAAP diluted earnings per share increased 25 percent to $1.60, and adjusted earnings per share increased 26 percent to $1.64. The company cited a net benefit of approximately $95 million from IEEPA tariff refunds during the quarter as a driver of adjusted operating profit and adjusted earnings per share growth. Selling, general and administrative expenses increased to $397 million from $361 million, and the related reported sales ratio increased to 19.9 % from 17.6 %.
Capital allocation remained active, with $454 million returned to shareholders through dividends and share repurchases. Liquidity at quarter end was $1,548 million, including availability under the revolving credit facility. The release does not separately disclose cash, debt, dividends, or share repurchases.
Masco raised its 2026 adjusted earnings per share guidance to $4.40 - $4.60 per share from its previous range of $4.10 to $4.30 per share. The company expects 2026 GAAP earnings per share of $4.21 - $4.41 per share. Management attributed the adjusted guidance increase to an anticipated full year net benefit from IEEPA tariff refunds of approximately $85 million, while characterizing underlying performance as largely in line with its prior outlook.
Management, verbatim
We have executed well in the first half of the year.
Jon Nudi, President and CEO
Second quarter sales results reflect a challenging comparison to the prior year as well as targeted strategic investments to support growth.
Jon Nudi, President and CEO
While our underlying performance remains largely in line with our prior outlook, the anticipated full year net benefit from IEEPA tariff refunds of approximately $85 million has led us to increase our 2026 adjusted earnings per share guidance.
Jon Nudi, President and CEO
Not in the filing
stated, not guessed- Segment revenue for Plumbing Products and Decorative Architectural Products.
- Prior-quarter comparisons for reported metrics.
- Operating cash flow.
- Free cash flow.
- Cash balance.
- Debt balance.
- Dividend amount.
- Share repurchase amount.
- Share repurchase authorization or remaining authorization.
- Guidance for revenue, gross margin, operating expenses, and tax rate.
- The full low-end and high-end outlook reconciliation table, which is truncated in the supplied filing text.
- A directly comparable reported full-year 2026 actual result for assessment against prior full-year adjusted earnings per share guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.