Masco cuts earnings forecast against inflationary backdrop

US home improvement and building giant Masco has reduced its full-year earnings estimates against a backdrop of currency volatility and tariff-induced cost inflation.

Reporting “strong” three-month results to end of June, the Michigan-based firm, which owns European bathroom brands Hansgrohe, Hüppe and Axor, said it anticipated full-year earnings per share, adjusted for exceptional items, to be in the range of $2.48 (£1.90) to $2.55.

This is down from a previous range of between $2.48 and $2.63 per share.

But Masco said it was “well positioned” for sales and earning growth in the second half of the year as a result of raising prices across its product range to offset tariff-induced commodity inflation.

Over the three-month financial period, top-line sales increased 11% to $2.3 billion, supported by the acquisition of LED lighting specialist Kichler, while net income grew to $211bn, up from $163bn the year before.

“I am pleased with our strong top-line growth and our response to the cost pressures we experienced as we implemented price increases to offset inflation and leveraged our selling, general and administrative expenses,” said Masco president and chief executive Keith Allman.

“With these actions, we believe we are well positioned for strong top- and bottom-line growth as we enter the second half of the year.

“Expressing confidence in our future, our board has announced its intention to raise our annual dividend to 48 pence per share beginning in the fourth quarter – a 14% increase.”

He added that Masco had $200m of free cash flow, which it would spend buying attractive businesses to add to its portfolio or on share buy-backs.

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