Mohawk Industries, Inc.

Good day, everyone, and welcome to the Mohawk Industries third quarter 2025 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. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to James Brunk, Chief Financial Officer. Please go ahead.

Thank you, Jamie. Good morning, everyone. Welcome to Mohawk Industries Quarterly Investor Conference Call. Joining me on the call are Jeff Loribond, Chairman and Chief Executive Officer, and Paul DeCock, President and Chief Operating Officer. Today, we'll update you on the company's third quarter performance and provide guidance for the fourth quarter of 2025. I'd like to remind everyone that our press release and statements that we make during this call are 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 AK and press release in the investor section of our website. I'll now turn the call over to Jeff for his opening remarks. Thank you, Jim.

Our third quarter net sales of $2.8 billion were in line with our expectations slightly ahead of prior year as reported and flat on a constant basis. Though economic conditions across our regions weakened more than anticipated compared to the prior quarter, we believe we outperformed in most of our markets. Our sales and product mix continue to benefit from the success of our premium residential and commercial offering and collections introduced during the past two years. Our adjusted earnings per share of $2.67 reflected benefits from ongoing productivity and restructuring initiatives, as well as the impact of favorable currency exchange and lower interest expense, offset by higher input costs and temporary plant shutdowns. Across our markets, material and energy expenses are now improving from peak levels, though higher costs from earlier in the year will still impact our fourth quarter earnings as expected. With our markets remaining challenged, we're executing targeted actions across the organization to drive performance, such as operational enhancements, administrative process improvements, and technology advancements. We are lowering our cost structure without impacting our long-term growth potential when the market recovers. We've identified additional restructuring opportunities to rationalize less efficient assets and streamline logistics operations and administrative functions. These new actions will result in annualized savings of approximately $32 million at a net cash cost of approximately $20 million after asset sales. Combined with our previously announced restructuring actions, we anticipate delivering $110 million in savings this year. During the quarter, we continue to focus on our working capital management and generate approximately $310 million in free cash flow. We repurchased 315,000 shares in the quarter for approximately $40 million as part of our current stock buyback authorization. Year-to-date, we've purchased 108 million of our outstanding shares. Across our geographies, consumer uncertainty continues to limit discretionary spending on large projects, particularly if financing with debt is required. Postponement of large renovation projects and declining home sales have been the primary driver of weakness in the residential remodeling during the current cycle, while the commercial sector has remained stronger. In most of our markets, central banks have lowered interest rates to encourage economic growth and benefit housing turnover. The Federal Reserve's September rate cuts and potential future actions should benefit the U.S. housing market by bringing in potential buyers who have waited for better rates. As the supply of existing homes on the market rises, price increases have slowed, which should benefit future sales. Builders are attempting to offset weakness in the new home sales with price cuts, rate buy-downs, and closing cost assistance. The Fed's actions should also stimulate future business investment in non-residential new construction and remodeling. European consumers have accrued record levels of savings since the pandemic and are now experiencing lower inflation rates, both of which should encourage greater discretionary spending. To address the ongoing housing shortage in Europe, several governments are initiating programs to incentivize new home construction. Our industry is currently at various stages of passing through the impact of higher tariffs on imported products and should compensate for increased product costs over time. As previously stated, we continue to address the situation by optimizing our supply chain and implementing price adjustments on affected product categories. Ocean freight costs have been declining and are partially offsetting the tariff impact for U.S. importers. Based on the recent changes, engineered wood and laminate imports will now be subject to reciprocal tariffs like our other flooring product categories, which should benefit domestically produced products. Because the evolving tariff situation will require some time to reach equilibrium, we will continue to adjust our strategies with the changing rates and market conditions. With that, Jim will review our financials for the quarter.