Mohawk Industries, Inc.

Good day and welcome to the Mohawk Industries fourth quarter 2025 earnings conference call. All participants will be in 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 then one on your telephone keypad, and to withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to James Brunk, Chief Financial Officer. Please go ahead, sir.

Thanks, Rocco. Good morning, everyone, and welcome to Mohawk Industries' Quarterly Investor Conference Call. Joining me on today's call are Jeff Loribond, Chairman and Chief Executive Officer, Paul DeCock, President and Chief Operating Officer, and Nick Mampy, who will succeed me as Chief Financial Officer on April 1st. Today, we'll update you on the company's fourth quarter and full year performance and provide guidance for the first quarter of 2026. I'd like to remind everyone that our press release and statements that we make during the 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 Securities and Exchange Commissions. This call may include discussion of non-GAAP numbers. For a 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 for his opening remarks.

Thank you, Jim. Our fourth quarter net sales were approximately $2.7 billion, an increase of 2.4% as reported, and a decrease of approximately 3.3% on a constant basis versus the prior year and in line with our expectations. Across our markets, commercial demand remained stable during the quarter, though continued weakness in housing turnover and sluggish new home construction in the U.S. impacted our volume. Our adjusted EPS for the quarter was $2, up approximately 3% versus the prior year, with benefits from productivity, restructuring initiatives, product mix, and lower interest expense offset by market pressures and increased input costs. For the quarter, we managed the impact of the U.S. tariffs, covering the cost as planned. For the full year, our sales were approximately $10.8 billion, flat with the prior years reported. Approximately 55 percent of our sales were in the U.S., 30 percent were in Europe, and 15 percent in other geographies. Our adjusted EPS for the full year was $8.96, a decrease of approximately 7.5 percent. For the year, we generated free cash flow of approximately $620 million and repurchased approximately 1.3 million shares of our stock for $149 million as part of our current stock buyback authorization. The fourth quarter reflected a continuation of the macroeconomic factors our industry has faced since the second half of 2022. Housing turnover in our major regions remains at historical lows, due to affordability challenges and economic uncertainty. Consumer confidence remained weak due to inflation, employment concerns, and geopolitical tensions. As a result, many large discretionary investments such as home renovations continue to be postponed. Remodeling activity that did take place was primarily driven by more affluent customers or those addressing essential needs. Throughout 2025, Most central banks took actions intended to stimulate economic growth in housing markets, including recent interest rate cuts by the U.S. Federal Reserve. While 2025 U.S. existing home sales did not improve, sales in December increased over the prior year. Currently, U.S. mortgage rates are at their lowest levels since September 2022, and we anticipate these lower rates combined with potential government actions will benefit housing turnover. In Europe, interest rates are also the lowest since late 2022. In addition, consumers have built record levels of savings, inflation has eased, and employment has remained steady. These conditions should support greater participation in the housing market as consumer confidence improves. Across our markets, housing construction levels have not kept pace with household formations since the great financial crisis. In the U.S., builders completed fewer homes in the fourth quarter as they focused on reducing inventories and lowering the supply of new homes. In Europe, high building costs and land shortages and labor constraints continue to impede residential construction. Completed housing units in Europe have declined in 2025, though moderate building recoveries in southern and eastern Europe have emerged. As housing demand increases, European governments are evaluating options to stimulate construction. The commercial channel outperformed residential throughout the year with strength in healthcare, education, and hospitality. We anticipate that lower interest rates will encourage additional investments in commercial construction and renovation. In response to ongoing conditions, we took actions during the year to stimulate sales and enhance our mix in soft markets through innovative product introductions, marketing actions, and promotional activities. Our premium product launches deliver differentiated design and performance features to incentivize remodeling, and our new commercial collections help us gain momentum in both new construction and remodeling projects. As residential demand remains weak, heightened competition to absorb the industry fixed costs continues to exert pressure on prices. To partially cover inflation, we took pricing actions in regions and product categories as market conditions allowed. In the US, we managed the impact of tariffs through pricing actions and supply chain optimization. If necessary, we will adjust our strategies based on the Supreme Court's upcoming rulings and changes in the global trade landscape. During 2025, we initiated numerous restructuring actions and operational improvements that lowered our cost position and will benefit our longer-term performance. In 2025, our markets did not improve, and in response we reduced capital spending to $435 million, about 30% below our depreciation levels. We continue to take the proper actions to manage the present environment, pursue profitable growth opportunities, and strengthen our position when housing markets rebound. Now Jim will share our financial report.