Group 1 - Newmont Corporation (NEM) has seen a 14.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Simmons First National Corporation (SFNC) has experienced a 7.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Vertiv Holdings Co (VRT) has recorded a 7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Dorman Products, Inc. (DORM) has seen an 11.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Masco Corporation (MAS) has also experienced an 11.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Group 1 - Simmons First National Corporation (SFNC) has seen a 7.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and offers a dividend yield of 4.2%, significantly higher than the industry average of 2.3% [1] - Newmont Corporation (NEM) has experienced a 14.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and has a dividend yield of 1.2%, compared to the industry average of 0.0% [2] - Masco Corporation (MAS) has had an 11.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Core Insights - The U.S. housing market is experiencing a balance between affordability challenges and pent-up demand, with optimism emerging due to easing mortgage rates and potential Federal Reserve rate cuts [1][8] Builder Sentiment - Builder confidence in newly built single-family homes remained at 32 in September, unchanged from August, with future sales expectations rising to 45, the highest since March [2][8] - 39% of builders reported price reductions in September, the highest since the post-COVID period began, with an average reduction of 5% [3][8] Economic Factors - Inflation remains a concern, with the consumer price index rising 2.9% year-over-year in August, indicating ongoing price pressures [4] - The labor market showed weakness, adding only 22,000 jobs in August, with the unemployment rate increasing to 4.3% [5] - Mortgage rates have decreased to 6.35%, the lowest since mid-October 2024, potentially reopening opportunities for sidelined buyers [6][8] Industry Performance - The Zacks Building Products – Home Builders industry gained 29.5% over the past three months, outperforming the broader Zacks Construction sector and the S&P 500, both of which increased by 12.1% [10] - D.R. Horton (DHI) has seen a 41.6% increase in stock price over the past three months, with an upward revision of fiscal 2025 earnings estimates [14] - Toll Brothers (TOL) gained 34% in the same period, benefiting from potential confidence revival among high-income households [15] - Home Depot (HD), Lowe's (LOW), and Masco (MAS) have also posted significant gains, with respective increases of 21.4%, 28.3%, and 20.4% [16][17]

Core Insights - Fiduciary Management, Inc. (FMI) is an independent money management firm established in 1980, located in Milwaukee, Wisconsin [1] - FMI employs a value discipline in its equity investing strategies, focusing on fundamental research [1] - As of March 31, 2024, FMI has approximately $16.1 billion in Assets Under Administration (AUA) and $15.8 billion in Assets Under Management (AUM) [1]

Core Insights - Masco Corporation (MAS) reported strong second-quarter 2025 results, with earnings and revenues exceeding Zacks Consensus Estimates, leading to a 10% increase in shares during pre-market trading [1] - The company's performance was attributed to effective management amid a dynamic geopolitical and macroeconomic environment, as stated by President and CEO Jon Nudi [1] Financial Performance - Adjusted earnings per share (EPS) for the quarter were $1.30, surpassing the Zacks Consensus Estimate of $1.08, and up from $1.20 in the same quarter last year [2] - Net sales reached $2,051 million, exceeding the consensus mark of $2,004 million, although this represented a 1.9% decline from the prior year [2] - Excluding divestitures, net sales remained flat year over year [2] Regional Sales Analysis - North American net sales decreased by 3% in local currency compared to the previous year [3] - International net sales increased by 1% year over year in local currency [3] Segment Performance - Plumbing Products segment saw a 5% year-over-year increase in net sales to $1.31 billion, with adjusted EBITDA rising to $303 million from $276 million in the prior year [4] - Decorative Architectural Products segment reported sales of $738 million, down 12% from the previous year, with adjusted EBITDA decreasing to $165 million from $184 million [5] Margin Analysis - Adjusted gross margin expanded by 10 basis points to 37.7% [6] - Adjusted selling, general and administrative expenses as a percentage of net sales decreased by 90 basis points to 17.6% [6] - Adjusted operating margin increased by 100 basis points year-over-year to 20.1%, with adjusted EBITDA for the quarter at $449 million, up from $437 million last year [6] Liquidity and Shareholder Returns - As of June 30, 2025, Masco had total liquidity of $1.34 billion, including cash and cash investments of $390 million [7] - The company repurchased 1.6 million shares for approximately $101 million during the reported period [8] - A quarterly dividend of $0.31 per share has been announced, scheduled for payment on August 25, 2025 [8]

Core Insights - Masco reported revenue of $2.05 billion for the quarter ended June 2025, a decrease of 1.9% year-over-year, but exceeded the Zacks Consensus Estimate of $2 billion by 2.32% [1] - The company's EPS was $1.30, up from $1.20 in the same quarter last year, representing an EPS surprise of 20.37% against the consensus estimate of $1.08 [1] Financial Performance Metrics - Net Sales for Plumbing Products reached $1.31 billion, surpassing the average estimate of $1.26 billion, reflecting a year-over-year increase of 4.7% [4] - Net Sales for Decorative Architectural Products were $738 million, slightly below the average estimate of $744.34 million, showing a year-over-year decline of 11.9% [4] - Adjusted Operating Profit for Plumbing Products was $276 million, exceeding the average estimate of $225.09 million [4] - Adjusted Operating Profit for Decorative Architectural Products was $157 million, above the average estimate of $145.41 million [4] - Reported Operating Profit for Plumbing Products was $275 million, compared to the average estimate of $223.34 million [4] - General corporate expenses reported a loss of $20 million, better than the estimated loss of $25.63 million [4] Stock Performance - Over the past month, Masco's shares have returned -2.3%, while the Zacks S&P 500 composite increased by 2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Company Performance - Masco reported quarterly earnings of $1.3 per share, exceeding the Zacks Consensus Estimate of $1.08 per share, and up from $1.2 per share a year ago [1] - The earnings surprise for the quarter was +20.37%, while the previous quarter saw a surprise of -5.43% with actual earnings of $0.87 per share against an expectation of $0.92 [2] - The company posted revenues of $2.05 billion for the quarter, surpassing the Zacks Consensus Estimate by 2.32%, but down from $2.09 billion year-over-year [3] Future Outlook - The sustainability of Masco's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [4] - Current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $1.95 billion, and for the current fiscal year, it is $3.58 on revenues of $7.61 billion [8] - The estimate revisions trend for Masco was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Industry Context - The Building Products - Miscellaneous industry, to which Masco belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Financial Data and Key Metrics Changes - The company's net sales decreased by 2% in the second quarter, but were in line with the prior year when excluding the Kichler divestiture and currency impacts [13][22] - Gross margins increased by 10 basis points to 37.7%, while operating profit grew by $14 million to $413 million, resulting in an operating profit margin increase of 100 basis points to 20.1% [13][24] - Earnings per share (EPS) grew by 8% to $1.3 per share [13][24] Business Line Data and Key Metrics Changes - Plumbing sales increased by 4% in local currency, with North American Plumbing sales up by 5% driven by favorable pricing and volume [14][25] - International plumbing sales increased by 1% in local currency, with operating profit for the segment at $276 million and an operating margin of 21% [15][25] - Decorative Architectural segment sales decreased by 12%, with total paint sales down mid-single digits due to lower volume [15][27] Market Data and Key Metrics Changes - The global repair and remodel market is anticipated to decline by low single digits, with the company expecting to outperform the market [19][33] - The company expects its sales to be roughly flat, excluding the impacts of divestiture and currency, with lower volumes offset by pricing [19][33] Company Strategy and Development Direction - The company aims to strengthen its portfolio of brands and enhance consumer experiences while driving profitable growth [8][20] - The focus is on leveraging digital strategies, including e-commerce and digital marketing, to accelerate top-line growth [83] - The company is committed to maintaining cost discipline while investing in future growth opportunities [30][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic geopolitical and macroeconomic environment, emphasizing the need for mitigation actions against tariffs and commodity cost increases [12][17] - The company anticipates some uncertainty in near-term market conditions but remains optimistic about structural factors supporting long-term growth [20][34] - Management expects headwinds in the second half of the year, particularly related to tariff costs and commodity inflation [35] Other Important Information - The company plans to allocate approximately $450 million towards share repurchases or acquisitions in 2025, with a focus on bolt-on acquisitions [38][41] - The balance sheet remains strong, with gross debt to EBITDA at two times and $1.3 billion in liquidity [28][29] Q&A Session Summary Question: Allocation of $450 million to repurchases and acquisitions - Management indicated that acquisitions would be bolt-on in nature, focusing on core areas, with the majority of the allocation expected for share repurchases [38][41] Question: Sustainability of propane growth - The propane business has grown significantly, and management believes there is still room for growth, particularly through partnerships with The Home Depot [42][43] Question: Pre-buy activity in plumbing - Some pre-buy activity was noted in plumbing, primarily related to tariff price increases, but overall channel inventories remain healthy [48][50] Question: DIY paint consumption trends - Management highlighted that existing home sales, which are at a three-decade low, are a major driver of softness in the DIY market [54][56] Question: Performance of plumbing brands - Upper premium and luxury brands are performing well, while mid-tier brands are experiencing some trade-down [61][63] Question: Mitigation actions against tariffs - Management is employing pricing, cost reductions, and sourcing changes to mitigate tariff impacts, with a focus on reducing exposure to China [74][104] Question: Working capital dynamics - Working capital is impacted by tariffs and inflation, with a focus on maintaining lean inventory while managing tariff-related costs [118][119]

Financial Data and Key Metrics Changes - For the second quarter, net sales decreased by 2%, but were in line with the prior year when excluding the Kichler divestiture and currency impacts [11][19] - Gross margins increased by 10 basis points to 37.7% [11][20] - Operating profit grew by $14 million to $413 million, with an operating profit margin increase of 100 basis points to 20.1% [11][20] - Earnings per share grew by 8% to $1.3 per share [11][20] Business Line Data and Key Metrics Changes - Plumbing sales increased by 4% in local currency, with North American Plumbing sales up by 5% driven by favorable pricing and volume [12][22] - International plumbing sales increased by 1% in local currency, with operating profit for the segment at $276 million and an operating margin of 21% [12][22] - Decorative Architectural segment sales decreased by 12%, or 4% excluding the Kichler divestiture, with overall paint sales down mid-single digits [13][24] - Pro paint sales increased mid-single digits, while DIY paint sales decreased high single digits [14][24] Market Data and Key Metrics Changes - The global repair and remodel market is anticipated to decline by low single digits in 2025 [16][30] - The company expects its sales in 2025 to decrease by low single digits, impacted by the Kichler divestiture, with currency having a favorable impact of approximately 1% [30] Company Strategy and Development Direction - The new CEO plans to engage with stakeholders to strengthen the brand portfolio and drive profitable growth [6][18] - The company aims to leverage digital strategies, including e-commerce and digital marketing, to accelerate top-line growth while maintaining strong margins [80] - The focus remains on achieving additional growth and benefiting from the structural factors of the housing market, such as aging housing stock and high home equity levels [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic geopolitical and macroeconomic environment, which has impacted sales and margins [10][15] - The company anticipates continued pressure on DIY paint sales due to low existing home turnover and macroeconomic conditions [14][24] - Despite near-term uncertainties, the long-term outlook for repair and remodel activity remains strong [17][18] Other Important Information - The company has a strong balance sheet with gross debt to EBITDA at two times and $1.3 billion in liquidity [25] - The company returned $167 million to shareholders in the second quarter through dividends and share repurchases [26] - The company plans to invest approximately $175 million in capital expenditures and anticipates deploying at least $450 million towards share repurchases or acquisitions in 2025 [27] Q&A Session Summary Question: Allocation of $450 million to repurchases and acquisitions - Management indicated that acquisitions would be bolt-on in nature, focusing on core areas, with the majority of the $450 million likely allocated to share repurchases [34][36][38] Question: Sustainability of propane growth - The propane business has grown significantly, and management believes there is still room for growth, particularly through partnerships with The Home Depot [39][40] Question: Pre-buy activity in plumbing - Some pre-buy activity was noted in plumbing due to anticipated price increases, but overall channel inventories remain healthy [44][46] Question: DIY paint consumption trends - Management highlighted that existing home sales, which are at a three-decade low, are a major driver of softness in DIY paint sales [51][52] Question: Brand performance in plumbing - Upper premium and luxury brands are performing well, while mid-tier brands are experiencing some trade-down [58][60] Question: Mitigation actions against tariffs - Management is implementing cost reductions, pricing actions, and sourcing changes to mitigate tariff impacts, with a focus on reducing exposure to China [71][100] Question: Future tariff impacts - Management stated it is premature to estimate the impact of potential future tariffs, but they are focused on providing guidance based on currently enacted tariffs [84][86] Question: Working capital dynamics - The increase in working capital is largely driven by tariffs and material cost inflation, with a focus on lean inventory management [112][114]

Financial Performance - Q2 2025 - Total company sales decreased by 2% year-over-year, but were in line with the prior year excluding divestiture and currency impacts[20, 24, 25] - Adjusted gross margin improved by 10 basis points to 37.7%[20] - Adjusted operating profit margin expanded by 100 basis points to 20.1%[20, 24] - Adjusted EPS grew by 8% to $1.30 per share[20, 24] Segment Performance - Q2 2025 - Plumbing Products segment sales increased by 5%, or 4% excluding currency impacts[26, 28] - Plumbing Products segment operating margin increased 110 basis points to 21.0%[26] - Decorative Architectural Products segment sales decreased by 12%, or 4% excluding divestiture[29, 30] - Decorative Architectural Products segment operating margin increased 50 basis points to 21.3%[29] Financial Position and Outlook - The company repurchased 1.6 million shares for $101 million[20] - The company anticipates full-year adjusted EPS to be in the range of $3.90 - $4.10 per share[20, 32] - The company expects to deploy at least $450 million for share repurchases or acquisitions in 2025[40, 41]