Mohawk Industries, Inc.

Good morning everyone and welcome to the Mohawk Industries first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and one. To remove yourself from the question queue, you may press star and two. Please also note today's event is being recorded. This time, I'd like to turn the floor over to James Brunk. Please go ahead.

Thank you, Jamie. Good morning, everyone. Welcome to Mohawk Industries' quarterly investor conference call. Joining me on today's call are Jeff Loribond, Chairman and Chief Executive Officer, and Chris Wellborn, President and Chief Operating Officer. Today, we'll update you on the company's first quarter performance and provide guidance for the second quarter of 2024. I'd like to remind everyone that our press release and statements that we make during this call, may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including, but not limited to, those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include discussion of non-GAAP numbers. For reconciliation of any non-GAAP to GAAP amounts, please refer to our Form 8K and press release in the Investor section of our website. I'll now turn the call over to Jeff. Thanks, Jim.

Good morning, everyone. Though economic headwinds are impacting our industry, our results reflect positive effects of the actions we're taking to enhance our performance. Our net sales for the first quarter were $2.7 billion, down 4.5% compared to last year. Adjusted earnings per share were $1.86, up 6% versus 2023, as a result of restructuring productivity initiatives and benefits from lower cost materials and energy, partially offset by weaker pricing and mix. Currency exchange rates continue to affect our operating income, with a negative impact in the quarter of approximately $12 million, or 15 cents, on EPS. Across our regions, market conditions remain similar to the prior quarter, with significant pricing and mix pressure due to industry competition for volume. though slowing the commercial channel continues to outperform residential. Residential remodeling remains soft due to low housing sales and the impact of inflation on discretionary spending. Retailers have reported that consumers are reluctant to initiate higher ticket projects with flooring facing greater pressure since most replacements can be readily deferred. Our teams remain focused on managing through the near-term environment, realizing sales opportunities, reducing controllable costs, and completing restructuring initiatives. We continue to manage our production levels to align inventories with market demand. To stimulate sales, we're investing in new product introductions with enhanced features that convey the value of our collections. Given inflationary pressures and labor benefits and other items, we continue to take additional actions to reduce our cost structure and improve productivity. Globally, there is optimism about consumer confidence improving interest rates declining, and a rebound in the housing market. The timing of this inflection in each market depends on inflation levels and actions by their central banks. Latin America aggressively raised interest rates to combat inflation, and now the region is among the first to implement rate reductions. Brazil's central bank initiated several rate cuts, and Mexico recently lowered rates for the first time since 2021. In the US and Europe, central banks are maintaining interest rates as they focus on achieving their targeted inflation levels. The present forecast for US new home starts and existing home sales is for a slight increase in 2024 with greater improvement in the second half of the year. In some countries, governments are subsidizing housing investments by reducing mortgage rates. In the US, builders are stimulating purchases of their properties by buying down interest rates for consumers. The U.S. Realtors Association recently noted that life events eventually require buyers and sellers to make moves regardless of interest rates. The desire for home ownership remains strong, and people will find a way to realize that goal. Since our last call, Newsweek named Mohawk one of America's greatest workplaces for women, and Green Builder selected our PureTech PVC-free resilient flooring as one of their top products of the year. We're pleased to be recognized for both our commitment to our people and our product innovation. Jim will provide a review of our financial performance for the quarter.