Mohawk Industries, Inc. Q1 FY2026 earnings call

• Performance in first quarter in line with expectations despite challenging environment. Adjusted EPS $1.90, up ~25% vs prior year. Net sales ~$2.7 billion, 8% as reported, -2.6% constant basis. • Commercial sector outperformed residential. New home construction soft, consumers defer purchases/remodeling. • Implementing productivity actions and restructuring projects. Repurchased 607,000 shares for $64 million. • Global ceramic delivered stronger mix, lapped order management system conversion impact. • Flooring North America impacted by slower conditions. Flooring Western World driven by productivity, cost improvements. • In global ceramic, regions responding to local markets with new styles, announcing price increases. • In flooring rest of the world, implementing price increases, laminate sales benefited from retail partnerships, panel business improved, insulation business performed well. • Flooring North America slow but impacted positively by restructuring, system improvements.

Global Ceramic: Net sales just under $1.1 billion, 10.4% increase as reported, flat on constant basis. Adjusted operating income 55 million or 5% of sales. Flooring North America: Net sales $880 million, 2% increase as reported, 4.1% decrease on constant basis. Adjusted operating income 35 million or 4% of sales. Flooring Western World: Sales $751 million as reported, 12.2% increase or 4.4% decrease on constant basis. Adjusted operating income $74 million, or 9.8% of sales

• Expect adjusted EPS for second quarter to be between $2.50 and $2.60, excluding restructuring or other one-time charges. • Expect a significant recovery given four years of postponed flooring purchases.

• Conflict in the Middle East intensified, increasing volatility in global energy markets. Higher gasoline and diesel prices, increasing energy and oil/gas derivatives costs affecting product costs. • Unpredictable full impact of conflict on economic impact across markets, increased inflation reducing consumer sentiment and discretionary spending. • Energy markets remain volatile until global supply normalizes.

Q: Trevor Allenson from Wolf asked about range of outcomes for business in 2026, what drives high end vs low end, and how business is run to account for uncertainty.

A: Prepared for multiple options, flexible. Best case: Middle East supplies open near term, normalizes in 6 months, inflation remains. Alternative view: Conflict stays long, inflation continues, adjust strategy.

Q: John Lovallo from UBS asked about magnitude of price increases across regions and key products, and realization given volume challenges.

A: Middle East conflict increased costs across categories, price increases mid to high single digits, variations by product and geography.

Q: Susan McClary from Goldman Sachs asked about benefits of new products in enhancing mix and gaining share.

A: New product introductions are higher value with differentiation, each business has unique products.

Q: Adam Baumgarten from Vertical Research asked about input cost headwinds for back half, and how April price increases are going.

A: Inflation across materials, energy, transportation, impact begins in Q2, ramp up in Q3. Price increases mid to high single digits, market understanding.

Q: Stephen Kim from Evercore asked about context of inputs in flooring rest of the world and innovation impact.

A: Positivity in Q1, inflation to begin in Q2, innovation continuous, but new products impact margins as business increases.

Q: Rafe Jadrosich from Bank of America asked about update on Russia business and inflation quantification.

A: Russian business performing well, adapting to slowdown. Inflation begins in Q2, ramp up in second half.

Q: Phil Ong from Jefferies asked about gas buying in Europe and North American carpet cost curve.

A: Bought gas before increase, continue to buy. Carpet market soft, announced price increases, introducing new products.

Q: Sam Reed from Wells Fargo asked about order backlog growth context and channel partners reducing inventories.

A: Backlog increased in April, trends similar, difficulty knowing customer inventory changes.

Q: Colin Burin from Deutsche Bank asked about April backlog building across portfolio and natural gas hedging.

A: Backlogs generally higher, different by business and country.

Q: Mike Dahl from RBC asked about 2Q guide demand trends and pricing power ranking.

A: Q2 demand trends similar to prior, impact of increasing prices, no dramatic difference in pricing power.

Q: Michael Rahut from JPMorgan asked about price increases vs back half cost inflation and mix trends.

A: Pricing intended to offset higher costs, mid to high single digits, mix affected by consumer confidence.

Q: Keith Hughes from Truist asked about industry pressure and biggest inflation category.

A: Inflation across all categories, Europe has higher impact, some product categories have significant increases.

Q: Matthew Bully from Barclays asked about industry pricing discipline and Europe trends.

A: Increases flowing through, more discipline, Europe market improved then declined due to war, consumer confidence low.

Q: Brian Byros from TRG asked about speed of passing on price and Q1 as indicator.

A: Marketplace understands price increases need to happen, Q1 market pressured, margins depend on conflict evolution.

Q: David McGregor from Longbow Research asked about allocating capital to commercial business and tariff expense.

A: Commercial business smaller, invest in product innovation, consider M&A. Tariff environment changing, not quantified.