- \n
- \nNet sales decreased 6.4% year-over-year to $618.0 million<\/p>\n<\/li>\n
- \nNet (loss) income margin decreased 450 basis points year-over-year to (2.5)%<\/p>\n<\/li>\n
- \nAdjusted EBITDA margin1<\/sup> decreased 570 basis points year-over-year to 4.5%<\/p>\n<\/li>\n
- \nDiluted (loss) earnings per share were $(0.12), compared to $0.10 in the prior year period, adjusted diluted earnings per share1<\/sup> were $0.06, compared to $0.18 in the prior year period<\/p>\n<\/li>\n
- \nCompany provides second quarter 2026 financial outlook<\/p>\n<\/li>\n<\/ul>\n
BEACHWOOD, Ohio–(BUSINESS WIRE<\/a>)–
\nMasterBrand, Inc. (NYSE: MBC, the \u201cCompany,\u201d or \u201cMasterBrand\u201d), the largest residential cabinet manufacturer in North America, today announced first quarter 2026 financial results.<\/p>\n\n\u201cOur first quarter results reflect our disciplined focus on our near-term priorities. We delivered performance in line with our outlook while managing cost pressures and navigating an uncertain macroeconomic environment that continued to weigh on demand,\u201d said Dave Banyard, President and Chief Executive Officer. “We anticipate our pending combination with American Woodmark to close in the second calendar quarter of 2026, and we remain confident that we are building the right strategic and financial foundation to position MasterBrand for future growth as demand recovers.”<\/p>\n
First Quarter 2026<\/span><\/b><\/p>\n
\nNet sales were $618.0 million, a decrease of 6.4% compared to the first quarter of 2025, following a mid-single-digit market decline and a slower pace of housing completions.<\/p>\n
\nGross profit was $156.6 million, compared to $202.2 million in the prior year. Gross profit margin decreased 530 basis points to 25.3% on lower volume and the related unfavorable fixed cost leverage and unfavorable product mix. Material, personnel and utility inflation, combined with the impact of tariffs, contributed to overall margin pressure. These headwinds were partially offset by continuous improvement initiatives and targeted tariff mitigation actions.<\/p>\n
\nGross tariff costs were approximately $25 million in the first quarter, and mitigation plans continue to progress.<\/p>\n
\nNet (loss) income was $(15.4) million, compared to $13.3 million in the first quarter of 2025, and net (loss) income margin was (2.5)%, compared to net income margin of 2.0% in the prior year, as a result of lower gross profit and higher deal-related SG&A expenses, partially offset by the initial benefits of cost actions taken in the quarter.<\/p>\n
\nAdjusted EBITDA1<\/sup> was $28.0 million, compared to $67.1 million in the first quarter of 2025. Adjusted EBITDA margin1<\/sup> decreased 570 basis points to 4.5%, compared to 10.2% in the prior year, driven by lower volume and the related unfavorable fixed cost leverage, unfavorable mix, inflation and tariffs, partially offset by continuous improvement efforts net of inflation, cost actions implemented in the quarter and tariff mitigation efforts.<\/p>\n
\nDiluted (loss) earnings per share were $(0.12) compared to $0.10 in the first quarter of 2025. Adjusted diluted earnings per share1<\/sup> were $0.06 compared to $0.18 in the first quarter of 2025.<\/p>\n
Balance Sheet, Cash Flow and Capital Allocation<\/span><\/b><\/p>\n
\nAs of March 29, 2026, the Company had $138.4 million in cash and $332.3 million of availability under its revolving credit facility. Additionally, total debt was $1,084.9 million, net debt1<\/sup><\/b> was $946.5 million and the ratio of net debt to adjusted EBITDA1<\/sup> from the most recent trailing twelve months was 3.7x. During the quarter, the Company proactively amended its credit agreement to preserve financial flexibility as it navigates near-term macroeconomic headwinds while continuing to meet all debt obligations.<\/p>\n
\nNet cash used in operating activities was $(133.0) million for the thirteen weeks ended March 29, 2026, compared to $(31.4) million for the thirteen weeks ended March 30, 2025. Free cash flow1<\/sup> was $(146.2) million for the thirteen weeks ended March 29, 2026, compared to $(41.2) million for the thirteen weeks ended March 30, 2025. The declines in net cash provided by operating activities and free cash flow were driven by lower net income versus the prior year, less favorable movements in working capital and an increase in our income tax receivable.<\/p>\n
\nNo share repurchases were made during the first quarter of 2026. The Company is restricted from repurchasing shares under its merger agreement with American Woodmark until the close of the merger.<\/p>\n
Second Quarter 2026 Financial Outlook<\/span><\/b><\/p>\n
\nFor the second quarter of 2026, the Company expects the following:<\/p>\n
- \n
- \nNet sales year-over-year decrease of mid-single-digit to high-single-digit percentage<\/p>\n<\/li>\n
- \nAdjusted EBITDA1,2<\/sup> in the range of $51 to $61 million, with related adjusted EBITDA margin1,2<\/sup> in the range of 7.8% to 8.8%<\/p>\n<\/li>\n
- \nAdjusted diluted earnings per share1,2<\/sup> in the range of $0.03 to $0.13<\/p>\n<\/li>\n<\/ul>\n
\nAdjusted diluted earnings per share1<\/sup> guidance for the quarter reflects a higher-than-normal degree of uncertainty due to potential variability in the effective tax rate. This is driven by low pre-tax income, which amplifies the impact of non-deductible deal-related expenses relating to the pending merger with American Woodmark, as well as other potential discrete tax items. As a result, the actual effective tax rate and adjusted diluted earnings per share1<\/sup> may differ materially from the guidance provided.<\/p>\n
\nFor full year 2026, MasterBrand is reiterating its expectation that its addressable market will be down mid-single digits. The Company also continues to expect the following:<\/p>\n
- \n
- \nGross tariff costs of approximately 5-6% of 2026 net sales<\/p>\n<\/li>\n
- \nInterest expense to be flat to down year-over-year<\/p>\n<\/li>\n
- \nFree cash flow1<\/sup> to be in excess of 2026 net income<\/p>\n<\/li>\n<\/ul>\n
\nThe Company is not reiterating its prior outlook for effective tax rate improvement for the full year of 2026. MasterBrand now expects its full year 2026 effective tax rate to be elevated relative to the prior year, primarily reflecting the impact of non-deductible deal-related expenses associated with the pending merger with American Woodmark.<\/p>\n
\nThis financial outlook only reflects the impact of those tariffs in effect as of the date of this release and does not reflect any other potential tariffs or tariff-related impacts on company costs or end market demand. The Company believes the dynamic nature of the tariffs, specifically the uncertainty of implementation, potential timing and duration, limits the usefulness of estimating this information. MasterBrand undertakes no obligation to update this outlook as circumstances evolve. Additionally, this outlook does not reflect any anticipated financial benefits from the pending merger with American Woodmark, nor does it include expected transaction or integration-related costs.<\/p>\n
\n“While first quarter results reflect the challenging demand and cost environment we are navigating, our operational actions are progressing as planned,” said Andi Simon, Executive Vice President and Chief Financial Officer. “Continuous improvement efforts contributed meaningfully to the quarter, our tariff mitigation actions are taking hold, and we took decisive action to implement our $30 million cost reduction initiative. We expect the financial benefit of these cost actions to build through the remainder of the year, with the majority weighted to the second half.”<\/p>\n
- \nAdjusted diluted earnings per share1,2<\/sup> in the range of $0.03 to $0.13<\/p>\n<\/li>\n<\/ul>\n
- \nDiluted (loss) earnings per share were $(0.12), compared to $0.10 in the prior year period, adjusted diluted earnings per share1<\/sup> were $0.06, compared to $0.18 in the prior year period<\/p>\n<\/li>\n
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