Mohawk Industries 2025 Q1 Earnings Misses Targets as Net Income Falls 30.9%

Mohawk Industries (MHK) reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company posted a net income decline of 30.9% to $72.60 million from $105 million in the previous year. The earnings per share (EPS) dropped to $1.16, below expectations, from $1.65 in 2024 Q1. Looking forward, Mohawk Industries anticipates adjusted EPS for the second quarter to range between $2.52 and $2.62, reflecting ongoing market challenges and tariff impacts. The company remains focused on restructuring initiatives to improve long-term performance.

Revenue
In the first quarter of 2025, Mohawk Industries' revenue decreased by 5.7% to $2.53 billion from $2.68 billion in the same period last year. The Global Ceramic segment contributed $993.80 million, while Flooring North America generated $862.40 million. The Flooring Rest of the World segment added $669.60 million to the total revenue. Corporate and intersegment eliminations were recorded at $0, resulting in consolidated net sales of $2.53 billion.

Earnings/Net Income
Mohawk Industries' EPS fell sharply by 29.7% to $1.16 in 2025 Q1, down from $1.65 in 2024 Q1. The net income also decreased significantly, declining 30.9% to $72.60 million from $105 million in the previous year. This performance indicates a challenging quarter with pressures on profitability.

Price Action
The stock price of Mohawk Industries edged up 0.57% during the latest trading day, but declined 2.43% over the past full trading week. Month-to-date, the stock has dropped by 6.77%.

Post-Earnings Price Action Review
The analysis of Mohawk Industries' stock performance post-earnings report reveals that short-term gains are possible but overall performance remains underwhelming. The 3-Day and 30-Day win rates stand at 33.33%, with the 10-Day win rate marginally better at 42.86%. Despite a maximum return of 4.12% over 30 days, negative returns are common in the shorter 3-Day and longer 30-Day periods. The data suggests that even when there is a positive movement, it might take considerable time for the market to react, as evidenced by the best return being achieved 74 days post-release.

CEO Commentary
Jeff Lorberbaum, Chairman and CEO, highlighted that Mohawk Industries faced relatively stable sales on a constant basis for Q1, affected by reduced shipping days and foreign exchange challenges. While the new Flooring North America order system incurred extraordinary costs, productivity gains, restructuring actions, and a lower tax rate partially countered pricing pressures and higher input costs. He noted a weakened market in residential remodeling but emphasized Mohawk’s strategic advantage due to its domestic operations amidst rising tariffs.

Guidance
The company expects its second quarter adjusted EPS to be between $2.52 and $2.62, considering the anticipated impact of tariffs on consumer spending and housing. Mohawk is prioritizing sales optimization and further cost reductions, projecting approximately $100 million in benefits from restructuring efforts this year. Leadership maintains optimism about the long-term outlook for the flooring category, despite current market pressures.

Additional News
Recent non-earnings news for Mohawk Industries includes a stock buyback of 225,000 shares for approximately $26 million, signaling confidence in its long-term financial health. The company also announced the appointment of Bernard P. Thiers as a director, reflecting strategic leadership changes. Furthermore, Mohawk Industries has observed significant insider trading activity, with multiple sales reported, indicating potential strategic shifts or personal financial decisions by executives.