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- **Q3 Results**: Net sales down 3%, EPS $0.97. Updated 2025 EPS guidance $3.90-$3.95 (vs. $3.90-$4.10 prior) due to macro headwinds.
- **Tariff Impact**: $270M annualized pre-mitigation; $15M Q3 China tariffs offset by pricing. 2026 strategy includes sourcing shifts (China exposure down 45% since 2018).
- **Segment Strengths**: Delta Faucet e-commerce/trade growth; PRO Paint up mid-single digits. Luxury faucet market expansion ($1.8B addressable).
- **Cash Return**: $188M Q3 buybacks/dividends; $500M+ 2025 target (up from $450M). No major M&A, but pipeline for bolt-ons.
- **Long-Term Outlook**: R&R driven by $10T home equity, aging housing stock. Watkins Wellness poised for growth in wellness trends.


**【CEO Summary Section】**
- Jon Nudi highlighted his first 100 days as CEO, emphasizing Masco's strong foundation, market leadership, and strategic initiatives. 
- Q3 net sales decreased 3% in local currency, with Plumbing sales up 1% (driven by Delta Faucet's e-commerce and trade growth) and Decorative Architectural sales down 12%.
- Operating profit was $312 million (16.3% margin), with EPS of $0.97. Updated 2025 EPS guidance is $3.90-$3.95, down from $3.90-$4.10 due to macroeconomic headwinds.
- Key initiatives include luxury faucet expansion ($1.8B addressable market), water filtration innovation, and PRO Paint growth (mid-single digits expected for 2025). China market challenges and tariffs added $15M Q3 costs.

**【CFO Financial Commentary】**
- Q3 GAAP net income: $123 million; Non-GAAP EPS: $0.97 (vs. $0.95 prior guidance). 
- Plumbing segment: $204M operating profit (16.4% margin), impacted by tariffs, commodities, and inventory reserves. Decorative Architectural: $128M profit (19.1% margin), driven by PRO Paint growth.
- Full-year 2025 outlook: Sales down low single digits (excluding Kichler divestiture), operating margin ~16.5%, EPS $3.90-$3.95. 
- Tariff impact: $270M annualized (pre-mitigation), with $150M in-year cost. Mitigation efforts include sourcing shifts, cost reductions, and pricing.
- Free cash flow strong; $188M returned to shareholders Q3, with $500M+ expected for 2025 (up from $450M prior).

**【Q&A Highlights】**
- **Tariffs & Pricing**: CFO expects $270M annualized tariff impact, with ~$150M in-year cost. Pricing actions offset ~$15M Q3 China tariffs. 2026 strategy includes sourcing shifts (China exposure down 45% since 2018) and cost-sharing with suppliers.
- **Paint Performance**: DIY Paint down mid-single digits due to low home turnover; PRO Paint up low single digits. Q4 paint comparison challenging due 2024 inventory timing. Long-term optimism on R&R driven by home equity levels (~$10T) and aging housing stock.
- **Plumbing Margin**: 145% China tariffs added $15M Q3 cost. 2025 Plumbing margin ~16.4% (vs. 18.5% prior guide). Hansgrohe growth in Europe offset China softness.
- **Capital Allocation**: $500M+ for 2025 buybacks/M&A, up from $450M due to tax benefit. No major M&A in 2025, but pipeline for bolt-ons.
- **Delta Faucet**: E-commerce and trade channels strong; 2026 retail growth expected via innovation (e.g., tankless RO system) and strategic partnerships.
- **Watkins Wellness**: Sauna/hot tub market on trend; Watkins leads North America with 50%+ share. 2025 growth driven by product innovation and wellness trends.


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