Masco (MAS) Q4 2024 earnings summary

Executive summary

• 2024 revenue declined 2% to $7.8B, with adjusted EPS up 6% to $4.10 and margin expansion despite a challenging market.

• Q4 sales decreased 3% year-over-year, but increased 1% excluding divestiture and currency impacts.

• Completed the divestiture of Kichler Lighting, streamlining the portfolio and impacting sales but improving margins.

• Returned over $1 billion to shareholders in 2024 via dividends and share repurchases.

• Five-year compound annual adjusted EPS growth exceeded 12%.

Financial highlights

• Full year adjusted gross margin rose 110 bps to 36.3%; operating margin expanded 70 bps to 17.5%.

• Q4 operating profit increased $19 million (up 7%); Q4 operating margin improved 140 bps to 15.9%.

• Adjusted EPS: Q4 $0.89 (up 7%), full year $4.10 (up 6%).

• Free cash flow for 2024: over $900 million; free cash flow conversion: 96%.

• Return on invested capital: 44%; gross debt to EBITDA: 1.9x; liquidity: $1.6 billion.

Outlook and guidance

• 2025 adjusted EPS expected at $4.20–$4.45, including impact from new China tariffs.

• 2025 sales expected flat to down low single digits, impacted by Kichler divestiture and currency; excluding these, sales expected flat to up low single digits.

• 2025 operating margin expected to expand to ~18%.

• 2026 margin targets reiterated: plumbing at 20%, decorative at 19–20%, overall at 18.5%.

• Long-term organic sales growth targeted at 3–5%, EPS growth at ~10%.