MOHAWK INDUSTRIES INC

Previous wording

The Company continues to actively monitor trade policy and tariff announcements, including various executive orders issued by the current U.S. presidential administration. Due to its global footprint and manufacturing operations across 19 countries, the Company is generally able to provide its customers with regional supply. However, the current tariff policies have impacted certain of the Company’s sourcing and upstream and downstream supply chain processes occurring outside the U.S. and certain vendors, suppliers, and customers located outside the U.S. Based on recent changes, engineered wood and laminate imports will now be subject to reciprocal tariffs like other flooring categories, which should benefit domestically produced products. The Company has begun to take steps to mitigate the implemented tariffs through managing inventory of sourced products, adjusting prices as the tariff trade policy evolves and optimizing its supply chain. At a 10% baseline tariff rate, the Company expects to incur an annualized cost of approximately $50 million related to such tariffs. The Company continues to monitor changing tariff levels and adjust its strategies to mitigate their impact as trade policy evolves. However, the duration, magnitude and scope of any additional tariffs, trade restrictions, retaliatory or other measures are difficult to predict, including any related impacts to consumer demand, along with the extent (if any) to which the Company will be able to offset the impacts of such actions through mitigation efforts. These tariff actions, retaliatory measures, or other trade restrictions, could materially and adversely impact the Company’s business, financial condition, results of operations, and prospects.

Current wording

The Company continues to actively monitor trade policy and tariff announcements, including various executive orders issued by the current U.S. presidential administration. On February 20, 2026, the U.S. Supreme Court issued a ruling addressing the validity of certain tariffs implemented under the International Emergency Economic Powers Act (“IEEPA”). In March 2026, the U.S. Court of International Trade issued an additional ruling that importers that paid tariffs under IEEPA are due refunds. While the Company has paid tariffs on certain imported products and materials that were subject to these IEEPA‑based duties, the nature, timing, and extent of any such refunds remains uncertain. The Company has taken steps to mitigate the implemented tariffs through managing inventory of sourced products, adjusting prices and optimizing its supply chain. The Company continues to monitor changing tariff levels and adjust its strategies to mitigate their impact as trade policy evolves. These tariff actions, retaliatory measures, or other trade restrictions could materially and adversely impact the Company’s business, financial condition, results of operations, and prospects.

Previous wording

Due to its global footprint, Mohawk’s business is sensitive to geopolitical conflict, including the Russia-Ukraine conflict and the ongoing conflicts in the Middle East. Since the first quarter of 2022, the Company has suspended new investments in Russia in response to ongoing Russian military actions in Ukraine. In addition, continued escalation of conflict in the Middle East region could result in supply chain disruptions, higher energy and raw material prices, decreased consumer demand for the Company’s products and increased transportation barriers, though the extent of the impact on the Company’s business, financial condition, results of operations, and prospects cannot be predicted. The broader consequences of current ongoing military conflicts, which may include further economic sanctions, embargoes, regional instability, and geopolitical shifts; potential retaliatory actions, including nationalization of foreign-owned businesses; increased tensions between the United States and countries in which the Company operates; and the extent of the conflict’s effect on the Company’s business and results of operations, as well as the global economy, cannot be predicted.

Current wording

Further escalation or continuation of conflicts in the Middle East, Russia, Ukraine, and elsewhere could result in additional supply chain disruptions, higher energy and raw material prices, increased transportation barriers and decreased market demand. The extent to which these conflicts may affect the Company’s business, financial condition, results of operations and prospects cannot be predicted. More broadly, ongoing military conflicts may result in economic sanctions or embargoes, regional instability, geopolitical shifts, retaliatory actions (including the potential nationalization of foreign‑owned businesses), increased tensions between the U.S. and countries in which the Company operates, and adverse impacts on the global economy, any of which could negatively affect the Company’s business and results of operations.

Previous wording

For the three months ended September 27, 2025, the net earnings attributable to the Company were $108.8 million compared to the net earnings attributable to the Company of $162.0 million for the three months ended September 28, 2024. The change was primarily attributable to higher input costs, higher legal settlements, reserves and fees, higher restructuring, acquisition and integration-related, and other costs, the unfavorable net impact of price and product mix and the unfavorable impact of temporary plant shutdowns, partially offset by productivity gains and lower income tax expenses.

Current wording

For the three months ended April 4, 2026, the net earnings attributable to the Company were $117.1 million compared to the net earnings attributable to the Company of $72.6 million for the three months ended March 29, 2025. The change was primarily attributable to increased productivity, the favorable current year comparative impact of the order management system conversion, the tax benefit recognized, and more shipping days, partially offset by higher input costs and lower volume.

Previous wording

Flooring ROW—Net sales for the nine months ended September 27, 2025, were $2,120.4 million compared to net sales of $2,148.6 million for the nine months ended September 28, 2024. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $49 million and fewer shipping days for the nine months ending September 27, 2025, of approximately $33 million, partially offset by the favorable net impact of foreign exchange rates of approximately $42 million.

Current wording

Global Ceramic—Net sales for the three months ended April 4, 2026 were $1,097.4 million, reflecting an increase of $103.6 million, or 10.4%, from $993.8 million reported for the three months ended March 29, 2025. The increase was primarily attributable to the favorable net impact of foreign exchange rates of approximately $57 million; more shipping days for the quarter ended April 4, 2026, of approximately $49 million and the favorable net impact of price and product mix of approximately $18 million, partially offset by lower sales volume of approximately $15 million.

Previous wording

Gross profit for the three months ended September 27, 2025, was $654.9 million compared to gross profit of $692.6 million for the three months ended September 28, 2024. The change was primarily attributable to higher input costs of approximately $39 million; higher restructuring, acquisition and integration-related, and other costs of approximately $25 million; the unfavorable net impact of price and product mix of approximately $20 million and the unfavorable impact of temporary plant shutdowns of approximately $14 million, partially offset by productivity gains of approximately $57 million.

Current wording

Gross profit for the three months ended April 4, 2026 was $641.9 million, an increase of $58.6 million, or 10.0%, compared to gross profit of $583.3 million for the three months ended March 29, 2025. The change was primarily attributable to productivity gains of approximately $32 million; the $25 million favorable current year comparative impact of the order management system conversion and the favorable net impact of foreign exchange rates of approximately $20 million; partially offset by higher input costs of approximately $28 million.

Previous wording

Selling, general and administrative expenses for the nine months ended September 27, 2025, were $1,531.0 million compared to $1,493.0 million for the nine months ended September 28, 2024. Selling, general and administrative expenses did not significantly change as a percentage of net sales for the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024.

Current wording

Selling, general and administrative expenses for the three months ended April 4, 2026 were $530.1 million, an increase of $42.8 million compared to $487.3 million for the three months ended March 29, 2025. Selling, general and administrative expenses did not significantly change as a percentage of net sales for the three months ended April 4, 2026, compared to the three months ended March 29, 2025.

Previous wording

Global Ceramic—Operating income was $71.6 million for the three months ended September 27, 2025, compared to operating income of $83.4 million for the three months ended September 28, 2024. The change was primarily attributable to higher input costs of approximately $31 million; higher restructuring, acquisition and integration-related, and other costs of approximately $11 million, partially offset by productivity gains of approximately $24 million.

Current wording

Global Ceramic—Operating income was $51.2 million for the three months ended April 4, 2026, reflecting an increase of $9.4 million compared to operating income of $41.8 million for the three months ended March 29, 2025. The increase in operating income was primarily attributable to productivity gains of approximately $21 million and the favorable net impact of price and product mix of approximately $13 million; partially offset by higher input costs of approximately $30 million.

Previous wording

Selling, general and administrative expenses for the three months ended September 27, 2025, were $518.2 million compared to $480.3 million for the three months ended September 28, 2024. The change was primarily attributable to higher legal settlements, reserves and fees, and restructuring, acquisition and integration-related, and other costs of approximately $15 million; higher input costs of approximately $13 million and the unfavorable net impact of foreign exchange rates of approximately $10 million.

Current wording

Flooring NA—Operating income was $3.8 million for the three months ended April 4, 2026, reflecting a decrease of $5.5 million compared to operating income of $9.3 million for the three months ended March 29, 2025. The decrease in operating income was primarily attributable to higher restructuring, acquisition and integration-related, and other costs of approximately $15 million; higher input costs of approximately $13 million; partially offset by the $30 million favorable current year comparative impact of the order management system conversion.

Previous wording

Flooring ROW—Operating income was $168.3 million for the nine months ended September 27, 2025, compared to operating income of $204.3 million for the nine months ended September 28, 2024. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $45 million and lower sales volume of approximately $11 million, partially offset by productivity gains of approximately $19 million.

Current wording

Flooring ROW—Operating income was $70.5 million for the three months ended April 4, 2026, reflecting an increase of $11.8 million compared to operating income of $58.7 million for the three months ended March 29, 2025. The increase in operating income was primarily attributable to productivity gains; lower input costs, partially offset by the unfavorable net impact of price and product mix.

Previous wording

Interest expense was $5.0 million for the three months ended September 27, 2025, compared to interest expense of $11.2 million for the three months ended September 28, 2024. The change was primarily attributable to strong cash flow, resulting in lower debt.

Current wording

Interest expense was $2.4 million for the three months ended April 4, 2026, reflecting a decrease of $4.0 million compared to interest expense of $6.4 million for the three months ended March 29, 2025. The decrease was primarily attributable to cash flow generation resulting in lower financing needs.

Previous wording

Other income and expense, net was income of $0.4 million for the three months ended September 27, 2025, compared to other income of $0.7 million for the three months ended September 28, 2024. Other income and expense, net did not significantly change for the three months ended September 27, 2025, from the three months ended September 28, 2024.

Current wording

Other expense, net was $1.2 million for the three months ended April 4, 2026 compared to other income, net of $0.5 million for the three months ended March 29, 2025. Other income and expense, net did not significantly change for the three months ended April 4, 2026, from the three months ended March 29, 2025.

Previous wording

For the nine months ended September 27, 2025, the Company recorded income tax expense of $74.8 million on earnings before income taxes of $402.7 million, for an effective tax rate of 18.6%. For the nine months ended September 28, 2024, the Company recorded income tax expense of $109.9 million on earnings before income taxes of $534.5 million, for an effective tax rate of 20.6%. The decrease in the effective tax rate was primarily driven by the Company’s geographic dispersion of profits and losses for the respective periods and a tax benefit related to a prior period adjustment to deferred taxes during the nine months ended September 27, 2025, partially offset by an increase in unrecognized tax benefits during the nine months ended September 27, 2025.

Current wording

For the three months ended April 4, 2026, the Company recorded income tax benefit of $8.9 million on earnings before income taxes of $108.2 million, for an effective tax rate of (8.2)%. For the three months ended March 29, 2025, the Company recorded income tax expense of $17.5 million on earnings before income taxes of $90.1 million, for an effective tax rate of 19.4%. The decrease in the effective tax rate was primarily attributable to tax benefits recognized during the three months ended April 4, 2026, including (i) a one-time U.S. tax benefit associated with a legal entity restructuring initiative, (ii) tax credits issued by the Brazilian government related to prior years, and (iii) a foreign tax credit benefit recorded in connection with a U.S. amended return. These favorable impacts were partially offset by the Company’s geographic dispersion of profits and losses for the respective periods and a non-recurring benefit recorded during the three months ended March 29, 2025 related to a prior period adjustment to deferred taxes.

Previous wording

Net cash provided by operating activities in the first nine months of 2025 was $596.6 million, compared to net cash provided by operating activities of $736.9 million in the first nine months of 2024. The change was primarily attributable to the change in accounts receivable; lower net earnings; change in accounts payable and change in inventories.

Current wording

Net cash provided by operating activities in the first three months of 2026 was $110.1 million, compared to net cash provided by operating activities of $3.7 million in the first three months of 2025. The change was primarily attributable to the change in accounts receivable; higher net earnings; change in accounts payable and change in inventories.

Previous wording

Net cash used in investing activities in the first nine months of 2025 was $245.6 million compared to net cash used in investing activities of $293.6 million in the first nine months of 2024. The change was primarily attributable to the decrease in capital expenditures of $48 million for the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024.

Current wording

Net cash used in investing activities in the first three months of 2026 was $102.3 million compared to net cash used in investing activities of $89.1 million in the first three months of 2025. The change was primarily attributable to the increase in capital expenditures of $13.2 million for the three months ended April 4, 2026, compared to the three months ended March 29, 2025.

Previous wording

Net cash used in financing activities in the first nine months of 2025 was $532.4 million compared to net cash used in financing activities of $651.6 million in the first nine months of 2024. The change was primarily attributable to prior year payments of term loan facility of $912.3 million; higher net proceeds from the Senior Credit Facility of $61.2 million, partially offset by the lower net proceeds from commercial paper of $831.1 million (year to date net repayment of $415.4 million in 2025 as compared to net proceeds of $415.7 million in 2024, year to date) and higher share repurchase of $20.8 million.

Current wording

Net cash provided by financing activities in the first three months of 2026 was $11.8 million compared to net cash provided by financing activities of $90.8 million in the first three months of 2025. The change was primarily attributable to lower net proceeds from commercial paper of $35.0 million (year to date net proceeds of $92.5 million in the first three months of 2026 as compared to net proceeds of $127.5 million in the first three months of 2025) and higher share repurchases of $39.2 million.

Previous wording

As of September 27, 2025, the Company had cash of $516.2 million, of which $285.6 million was in the United States and $230.6 million was in foreign countries. The Company plans to permanently reinvest the cash held outside the United States. The Company believes that its cash and cash equivalents on hand, cash generated from operations and availability under its existing credit facilities will be sufficient to meet its capital expenditure, working capital and debt servicing requirements over at least the next twelve months. The Company continually evaluates its projected needs and may conduct additional debt financings, subject to market conditions, to increase its liquidity and to take advantage of attractive financing opportunities.

Current wording

As of April 4, 2026, the Company had cash of $872.3 million, of which $491.6 million was in the United States and $380.7 million was in foreign countries, including approximately 30% of the Company's cash and cash equivalents held in Russia. The Company believes that its cash and cash equivalents on hand, cash generated from operations and availability under its existing credit facilities will be sufficient to meet its capital expenditure, working capital and debt servicing requirements over at least the next twelve months. The Company plans to permanently reinvest the cash held outside the United States. The Company continually evaluates its projected needs and may conduct additional debt financings, subject to market conditions, to increase its liquidity and to take advantage of attractive financing opportunities.

Previous wording

On July 24, 2025, the Company’s Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to $500 million of its common stock (the “2025 Share Repurchase Program”). On February 10, 2022, the Company’s Board of Directors approved a share repurchases authorization in the amount of $500 million (the “2022 Share Repurchase Program,” and together with the 2025 Share Repurchase Program, the “Share Repurchase Programs”). For the three months ended September 27, 2025, the Company purchased $40.2 million of its common stock under the Share Repurchase Programs. As of September 27, 2025, there remained $459.9 million authorized under the 2025 Share Repurchase Program. The 2022 Share Repurchase Program was completed in the quarter ended September 27, 2025.

Current wording

On July 24, 2025, the Company’s Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to $500 million of its common stock (the “Share Repurchase Program”). For the three months ended April 4, 2026, the Company purchased $64.3 million of its common stock under the Share Repurchase Program. As of April 4, 2026, there remained $355.0 million authorized under the Share Repurchase Program.