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Masco (MAS) Increases Q2 Guidance on Higher Sales Trend

Zacks Equity Research
·2 mins read

Masco Corporation MAS raised its second-quarter 2020 guidance, given “a better than anticipated rebound in sales” and a less negative incremental margin.

The company now expects second-quarter revenues to be down 8% versus prior expectation of a decline of 15-20%.

The increase in guidance was mostly driven by the Plumbing segment, accounting for 54.9% of revenues. Sales in the Plumbing Products segment are expected to be down 19% (excluding currency). Earlier, it had expected sales of the segment to decline 30-35% year over year.

Masco also raised its Decorative Architecture sales guidance. Sales in the Decorative Architectural Products segment are now expected to increase 6% year over year. Earlier, it was expected to be flat on an annualized basis.

Masco noted that the increased sales would also provide a boost to margins. It did not specifically quantify the benefit but rather stated that decremental margins in the quarter are likely to be stronger than the previously announced guided range of 35-40%.

Leading Brand Portfolio

Masco, a Zacks Rank #3 (Hold) company, operates through various divisions with a large number of products. It holds one of the largest shares in the faucets market. Its popular brands include Behr paint, Delta and Hansgrohe faucets, bath and shower fixtures, Kichler decorative and outdoor lighting, along with Hot Spring spas. The Behr brand is the number one brand in the DIY market for architectural coatings. The company has been witnessing strong demand for its market-leading brands. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masco — which shares space with Armstrong World Industries, Inc. AWI, Louisiana-Pacific Corporation LPX and Owens Corning Inc OC in the same industry — has been gaining strength from recovery in the housing market, solid repair and remodel or R&R activity, inorganic efforts, as well as cost-saving initiatives. The company’s shares have improved 27.7% in the past year compared with the Zacks Building Products – Miscellaneous industry’s growth of 20.9%. Also, it has outperformed the S&P 500’s 7% rise in the said period.

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