01—Abstract
Summary
Summary of the 10-Q filed July 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Masco Corporation's second quarter 2026 results show net sales of $1,992 milliona, down from $2,051 million in the second quarter of 2025, while operating profit rose to $470 million from $412 million and diluted income per common share was $1.60 versus $1.28.
Results were inclusive of a net tariff benefit from IEEPA tariff refunds of approximately $95 millionb, principally in the Plumbing Products segment. For the six months, net sales were $3,910 million and operating profit was $787 million, with diluted income per share of $2.64 compared with $2.15. Gross margin improved to 43.6% in the quarter from 37.6%, though management cites lower North America sales volume, elevated commodity and employee costs, and tariff exposure, particularly related to China, as ongoing pressures.
Capital allocation was active during the period. The company repurchased and retired approximately 7.8 million shares for about $596 millionc in the first six months (excluding incremental shares received in July 2026 under a $300 million accelerated share repurchase), and it anticipates using approximately $1.0 billion of cash, including term loan funds, for share repurchases in 2026. Long-term debt rose to $3,245 million from $2,945 million after a $300 million term loan was drawn to fund buybacks.
Total equity turned negative at $(118) million at June 30, 2026, compared with $76 milliond at year-end 2025, reflecting share repurchases and retained deficit. Cash and cash investments declined to $548 million.
A subsequent event occurred on July 28, 2026, when the company completed the divestiture of its Bristan Group business for a purchase price of £49 million ($65 million), net of cash disposed, with up to an additional £6 million ($8 million) contingent on performance measures. Restructuring charges were approximately $20 million for the six months, with about $50 million expected for full-year 2026.
02—Key points
Key Highlights
- Net sales of $1,992 million in Q2 2026, down from $2,051 million; six-month net sales of $3,910 million, up from $3,852 million.
- Operating profit of $470 million in Q2 2026 versus $412 million a year earlier, including a net tariff benefit of approximately $95 million from IEEPA tariff refunds.
- Diluted income per common share of $1.60 in Q2 2026 versus $1.28; six-month diluted income per share of $2.64 versus $2.15.
- Gross margin of 43.6% in Q2 2026 compared with 37.6% in Q2 2025, driven by lower tariff costs, cost savings, and higher net selling prices.
- Long-term debt increased to $3,245 million from $2,945 million, including a $300 million term loan used to fund share repurchases; total equity was $(118) million at June 30, 2026.
- Approximately $592 million spent on share repurchases in the first six months, with about $1.0 billion of cash expected for 2026 repurchases and $1.5 billion remaining under the 2026 authorization.
- Subsequent divestiture of the Bristan Group business completed July 28, 2026 for $65 million, net of cash disposed.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Masco kept $0.16.
- Revenue$1.99B100.0%
- Cost of revenue−$1.12B56.4%
- Gross profit$868.0M43.6%
- Operating costs−$398.0M20.0%
- Operating income$470.0M23.6%
- Interest, other & tax−$152.0M7.6%
- Net income$318.0M16.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 29, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.99B$2.05B | −2.9% |
| Cost of Revenue | $1.12B$1.28B | −12.1% |
| Gross Profit | $868.00M$772.00M | +12.4% |
| SG&A Expenses | $397.00M$361.00M | +10.0% |
| Operating Income | $470.00M$412.00M | +14.1% |
| Net Income | $318.00M$270.00M | +17.8% |
| EPS (Basic) | $1.60$1.29 | +24.0% |
| EPS (Diluted) | $1.60$1.28 | +25.0% |
| Shares Outstanding (Basic) | 199.00M210.00M | −5.2% |
| Shares Outstanding (Diluted) | 199.00M211.00M | −5.7% |
05—Questions
Frequently Asked Questions
What drove the improvement in profitability despite lower sales in the quarter?
Gross profit rose 12 percent to $868 million, positively affected by lower tariff costs (including IEEPA tariff refunds), cost savings initiatives, and higher net selling prices, partially offset by lower sales volume and higher commodity costs. The filing states the operating profit results included an approximately $95 million net tariff benefit from IEEPA refunds.
How is Masco funding its share repurchases?
The company used cash from operations and a $300 million draw on a senior unsecured delayed draw term loan entered into April 21, 2026, which the filing says was utilized to repurchase shares. It also entered into a $1.0 billion revolving credit agreement on March 20, 2026, under which no borrowings were outstanding at June 30, 2026.
What is the status of the company's tariff refunds?
Following a U.S. Supreme Court ruling that IEEPA tariffs were unlawful, the company began receiving refunds in the second quarter of 2026. As of June 30, 2026, it had recognized a receivable for tariff refunds not yet paid that it considers probable of collection and reasonably estimable.
What does the Bristan Group divestiture mean for the company?
On July 28, 2026, Masco completed the sale of Bristan Group, a U.K.-based faucet and shower products business previously included in Plumbing Products, for £49 million ($65 million), net of cash disposed, with up to an additional £6 million ($8 million) if performance measures are achieved by year-end 2026. The company stated the sale will not be presented as discontinued operations.
Why did shareholders' equity turn negative?
Total equity moved from $76 million at December 31, 2025 to $(118) million at June 30, 2026. The filing shows that share repurchases of $(203) million in the first quarter and $(393) million in the second quarter, along with cash dividends declared, were recorded against retained earnings and common shares, offsetting net income attributable to Masco and other comprehensive income.
06—Continue