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1. Company Snapshot

1.a. Company Description

Mohawk Industries, Inc.designs, manufactures, sources, distributes, and markets flooring products for remodeling and new constructions of residential and commercial spaces in the United States, Europe, Russia, and internationally.It operates through three segments: Global Ceramic, Flooring North America (Flooring NA), and Flooring Rest of the World (Flooring ROW).


The Global Ceramic segment provides a range of ceramic tile, porcelain tile, and natural stone products; and sources, markets, and distributes other tile related products.This segment markets and distributes its products under the American Olean, Daltile, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi, and Ragno brands.The Flooring NA segment offers floor covering product lines in a range of colors, textures, and patterns, including carpets, carpet tiles, rugs and mats, carpet pads, hardwood, laminate, medium-density fiberboards, luxury vinyl tiles (LVT), and sheet vinyl products.


This segment markets and distributes its flooring products under the Aladdin Commercial, Durkan, IVC, Karastan, Mohawk, Mohawk Group, Mohawk Home, Pergo, Portico, and Quick-Step brands.The Flooring ROW segment provides wood flooring and vinyl flooring, as well as laminates, roofing elements, sheet vinyl, LVT, insulation boards, medium-density fiberboards, chipboards, and other woods products under the Feltex, Godfrey Hirst, Hycraft, IVC Commercial, IVC Home, Leoline, Moduleo, Pergo, Quick-Step, and Unilin and Xtratherm brands; and licenses its intellectual property to flooring manufacturers.Mohawk Industries, Inc.


was incorporated in 1988 and is headquartered in Calhoun, Georgia.

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1.b. Last Insights on MHK

Mohawk Industries' recent performance was negatively impacted by weak Q3 earnings, missing estimates, and revenue pressure amid soft demand and macroeconomic headwinds. Despite cost-cutting efforts, adjusted net profits and cash flows continue to decline. However, some investors remain optimistic, with Bailard Inc. increasing its holdings by 42.1%. The company's Q3 revenue beat estimates, but margin pressures persist. Institutional investors, such as Vanguard and Ethic Inc., have reduced their positions, while Yousif Capital Management LLC slightly increased its stake.

1.c. Company Highlights

2. Mohawk Industries' Q4 2025 Earnings: A Mixed Bag

Mohawk Industries reported net sales of approximately $2.7 billion for the fourth quarter, a 2.4% increase as reported and a 3.3% decrease on a constant basis. Adjusted EPS for the quarter was $2.00, up 3% from the prior year, driven by productivity, restructuring initiatives, product mix, and lower interest expense. The actual EPS of $2.00 beat analyst estimates of $1.98. For the full year, sales were approximately $10.8 billion, flat with the prior year, while adjusted EPS was $8.96, a 7.5% decrease.

Publication Date: Feb -16

📋 Highlights
  • Q4 Net Sales:: $2.7 billion, +2.4% reported, -3.3% constant basis; <b>Adjusted EPS:</b> $2.00, +3% YoY driven by productivity and lower interest.
  • Full-Year Sales:: $10.8 billion, flat YoY; <b>Adjusted EPS:</b> $8.96, -7.5% YoY; <b>Free Cash Flow:</b> $620 million, $149 million spent on share buybacks.
  • Segment Performance:: Global Ceramic +6.1% sales, $63M income; Flooring Rest of World +6.5% sales, $65M income; Flooring North America -4.8% sales, $39M income.
  • 2026 Guidance:: CapEx of $480 million; $60–70 million productivity savings; EPS guidance of $1.75–1.85 (Q1); $100 million annualized tariff impact mitigated via pricing.
  • Balance Sheet Strength:: $806 million cash; $2.7 billion inventories; $4.8 billion PPE; plans to invest in product innovation and cost reductions amid inflationary pressures.

Segment Performance

The company's segments performed variably, with Global Ceramic having sales of $1.1 billion, a 6.1% increase as reported, and operating income of $63 million. Flooring North America had sales of $893 million, a 4.8% decrease, with operating income of $39 million. Flooring Rest of the World had sales of $737 million, a 6.5% increase as reported, with operating income of $65 million.

Balance Sheet and Cash Flow

The company's balance sheet remains strong, with cash and cash equivalents of $806 million, free cash flow of $270 million in the quarter, and $620 million year-to-date. Inventories were $2.7 billion, and property, plant, and equipment were $4.8 billion. The company plans to invest $480 million in 2026, focused on product innovation, cost reduction, and maintenance.

Outlook and Guidance

For 2026, the company expects its markets to remain competitive, with benefits from product mix, productivity, and cost reductions offsetting headwinds from higher energy and labor costs. The company anticipates first-quarter adjusted EPS to be between $1.75 and $1.85, excluding any restructuring or one-time charges. Analysts estimate next year's revenue growth at 3.0%.

Valuation

With a P/E Ratio of 22.08, the stock appears to be fairly valued. The EV/EBITDA ratio of 8.66 suggests a reasonable valuation. The company's ROE of 4.5% and ROIC of 3.62% indicate a relatively low return on equity and invested capital, respectively.

Operational Highlights

The company's hard surface business is performing well, driven by waterproof laminate and domestic laminate products. The LVT business is also seeing growth, with new hybrid alternatives being well-received by the market. The ceramic business is doing well, with a strong commercial business and improving style and design.

Inflation and Pricing

The main drivers of inflation for Mohawk Industries are wage and benefit increases, energy costs, tariffs, and general expenses. The company has announced targeted price increases to offset inflation, which is not easy due to a weak category and pressure to maintain prices. Jeffrey S. Lorberbaum noted that input costs are going up, and they are trying to get some of it covered through the marketplace.

3. NewsRoom

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Mohawk Industries presenta los resultados del cuarto trimestre de 2025

Feb -14

Source: globenewswire.com

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Mohawk Industries presenta i risultati del quarto trimestre 2025

Feb -14

Source: globenewswire.com

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Mohawk Industries publiceert resultaten 4e kwartaal 2025

Feb -14

Source: globenewswire.com

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Mohawk Industries gibt Ergebnisse für das vierte Quartal 2025 bekannt

Feb -14

Source: globenewswire.com

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Mohawk Industries publie ses résultats financiers du quatrième trimestre 2025

Feb -14

Source: globenewswire.com

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Mohawk Industries, Inc. (MHK) Q4 2025 Earnings Call Transcript

Feb -13

Source: seekingalpha.com

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Mohawk's Q4 Earnings Beat Estimates, Sales Miss, Margins Down Y/Y

Feb -13

Source: zacks.com

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Mohawk Industries (MHK) Reports Q4 Earnings: What Key Metrics Have to Say

Feb -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.99%)

6. Segments

Global Ceramic

Expected Growth: 2.0%

Mohawk Industries' Global Ceramic segment growth of 2.0% is driven by increasing demand for premium ceramic products, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on product innovation, operational efficiency, and cost savings initiatives contribute to its growth momentum.

Flooring NA

Expected Growth: 1.8%

Mohawk Industries' Flooring NA segment growth of 1.8% is driven by increasing demand for hard surface products, particularly luxury vinyl tile (LVT) and wood flooring, as well as a strong recovery in the new construction market. Additionally, the company's focus on product innovation, operational efficiency, and strategic pricing initiatives also contribute to the segment's growth.

Flooring ROW

Expected Growth: 2.2%

Mohawk Industries' Flooring ROW segment growth of 2.2% is driven by increasing demand for premium and sustainable flooring products, particularly in the European market. Additionally, the company's strategic acquisitions and investments in digital marketing and e-commerce platforms have enhanced its distribution channels and customer reach, contributing to the segment's growth.

7. Detailed Products

Flooring

Mohawk Industries, Inc. offers a wide range of flooring products, including hardwood, laminate, ceramic, porcelain, and luxury vinyl tile (LVT) flooring solutions for residential and commercial applications.

Ceramic Tile

Mohawk's ceramic tile products offer a variety of styles, colors, and textures for walls, floors, and countertops, suitable for both residential and commercial projects.

Laminate Flooring

Mohawk's laminate flooring products mimic the look and feel of natural wood and stone, offering a cost-effective and eco-friendly alternative for homeowners and commercial builders.

Hard Surface Flooring

Mohawk's hard surface flooring products include hardwood, engineered wood, and exotic wood species, suitable for residential and commercial applications.

Commercial Flooring

Mohawk's commercial flooring products are designed for high-traffic areas, offering durability, ease of maintenance, and aesthetic appeal for offices, hospitals, schools, and other commercial spaces.

8. Mohawk Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Mohawk Industries, Inc. operates in a industry where substitutes are available, but they are not a significant threat to the company's market share. The company's products are differentiated, and customers are loyal to the brand.

Bargaining Power Of Customers

Mohawk Industries, Inc. has a diverse customer base, and no single customer has significant bargaining power. The company's products are widely distributed, and customers have limited negotiating power.

Bargaining Power Of Suppliers

Mohawk Industries, Inc. has a moderate level of dependence on its suppliers. While the company has some bargaining power, suppliers also have some negotiating power due to the specialized nature of the products.

Threat Of New Entrants

The threat of new entrants in the industry is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. Mohawk Industries, Inc. has a strong brand presence and established distribution channels, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The industry in which Mohawk Industries, Inc. operates is highly competitive, with several established players competing for market share. The company faces intense competition from rivals, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.58%
Debt Cost 3.95%
Equity Weight 73.42%
Equity Cost 10.70%
WACC 8.90%
Leverage 36.20%

11. Quality Control: Mohawk Industries, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 4.1/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

132.6$

Current Price

132.6$

Potential

-0.00%

Expected Cash-Flows