MasterBrand, Inc.
For the period ended Mar 29, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 29, 2026 · Filed May 6, 2026
MBC$6.72-5.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-28; filed 2025-11-05.
0001941365-25-000088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-29; filed 2026-05-06.
0001941365-26-000056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 109 previous paragraphs and 91 current paragraphs.
58 unchanged; 24 reworded; 8 added; 23 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
In February 2026, we announced plans to implement $30 million of planned cost reductions. The cost reductions, which are primarily in selling, general and administrative expenses, began in the first quarter of 2026, with full realization expected by the end of fiscal 2026. As part of these cost reductions, during the thirteen weeks ended March 29, 2026, the Company implemented a voluntary and involuntary separation program to reduce overall headcount, primarily in our corporate functions. As a result of the workforce reduction, the Company recorded $8.1 million of one-time termination benefit costs for employees who voluntarily and involuntarily terminated their employment with the Company during the quarter.
Current report
On February 20, 2026, the Supreme Court issued a decision in Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., two appeals concerning tariffs President Trump imposed under the IEEPA. The Supreme Court held that the IEEPA does not give the President authority to impose tariffs. The Supreme Court thus affirmed a lower court decision that invalidated two sets of IEEPA tariffs: one set of tariffs on imports from Canada, Mexico, and the People's Republic of China based on declared emergencies concerning illicit drugs, and another set of tariffs on most other U.S. imports based on a declared emergency concerning the U.S. trade deficit. The Supreme Court ruling did not specifically address refunds.
Current report
On March 4, 2026, the CIT ordered the Administration to begin refunding all tariffs imposed under the IEEPA. The Company paid approximately $11.7 million in IEEPA tariffs prior to the Supreme Court decision. No further tariffs under the IEEPA were paid subsequent to the Supreme Court decision. However, the prospective benefit of the elimination of the IEEPA tariffs was approximately offset by the immediate implementation of new tariffs under Section 122 of the Trade Act of 1974. The Company intends to maintain all legal and administrative rights to potential recovery of IEEPA tariffs paid. We are accounting for any such recoveries under the GAAP gain contingency model. No receivable has been recognized as of March 29, 2026 due to uncertainty regarding the realizability of the refund process and administrative approval.
Current report
Restructuring charges were $12.8 million in the thirteen weeks ended March 29, 2026, as compared to restructuring charges of $4.7 million in the thirteen weeks ended March 30, 2025. The increase in the thirteen weeks ended March 29, 2026 is primarily due to theimplementation of a voluntary and involuntary separation program to reduce overall headcount, primarily in our corporate functions. As a result of the workforce reduction, the Company recorded $8.1 million of one-time termination benefit costs for employees who voluntarily and involuntarily terminated their employment with the Company during the quarter.
Current report
Interest expense was $18.4 million in the thirteen weeks ended March 29, 2026 as compared to $19.4 million in the thirteen weeks ended March 30, 2025. The decrease in interest expense for the thirteen weeks ended March 29, 2026 is due to the lower average outstanding debt balance as compared to the thirteen weeks ended March 30, 2025.
Current report
Other (income) expense, net
Current report
The Company entered into the Second Amendment of its 2024 Credit Agreement on March 26, 2026, which (i) added a new category of pricing in respect of the margin over the base reference rate as to loans thereunder and (ii) changed the threshold for the net leverage ratio financial covenant and minimum interest coverage ratio financial covenant in the 2024 Credit Agreement until (but excluding) the earlier of (A) January 1, 2027 and (B) the date that MasterBrand’s Merger with American Woodmark becomes effective. Under the Second Amendment, the new financial covenant does not permit the Company to allow its net leverage ratio to exceed, (i) 3.75 to 1.00 for the fiscal quarter ending on or about March 31, 2026, (ii) 4.00 to 1.00 for the fiscal quarters ending on or about June 30, 2026 and September 30, 2026 and (iii) 3.75 to 1.00 for the fiscal quarter ending on or about December 31, 2026. The Second Amendment also changed the required minimum interest coverage ratio to 2.75 to 1.00 until the earlier of January 1, 2027 or the effective date of the Merger with American Woodmark. The Company was in compliance with all of its debt covenants as of March 29, 2026.
Current report
Net cash provided by financing activities was $101.6 million in the thirteen weeks ended March 29, 2026 as compared to net cash provided by financing activities of $33.5 million in the thirteen weeks ended March 30, 2025. The thirteen weeks ended March 29, 2026 included net borrowings on our revolving credit facility of $110.0 million, while the thirteen weeks ended March 30, 2025 included net borrowings on our revolving credit facility of $50.0 million. The higher net borrowings was driven by the increased cash used in operating activities in the first quarter of 2026. The thirteen weeks ended March 30, 2025 also includes $11.4 million of stock repurchases made under the $50.0 million stock repurchase programs.
Removed paragraphs (23)
Previous report
On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, parent company of Supreme, a cabinetry company, from GHK Capital Partners LP. Supreme is a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products. Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafts framed and frameless cabinetry for a nationwide network of dealers. The combined company is reaching more customers, through its highly complementary dealer networks, with greater efficiency and effectiveness. Through this transaction, MasterBrand broadened its portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories, further diversifying its channel distribution and adding to its strategically located facility footprint. The acquisition was funded with a combination of cash on hand and proceeds from our revolving credit facility.
Previous report
Selling, general and administrative expenses increased by $1.2 million, or 0.7 percent, to $167.5 million (24.0 percent of net sales) in the thirteen weeks ended September 28, 2025 compared to $166.3 million (23.2 percent of net sales) in the thirteen weeks ended September 29, 2024. The increase in the thirteen weeks ended September 28, 2025 is primarily due to continued investments in our strategic initiatives ($2.6 million), specifically digital and technology investments and marketing. These increases are partially offset by lower distribution and commission costs ($2.5 million), as a result of the decrease in sales unit volume.
Previous report
Restructuring charges were $2.6 million in the thirteen weeks ended September 28, 2025, compared to restructuring charges of $7.8 million in the thirteen weeks ended September 29, 2024. Charges in both periods are largely related to severance costs and other employee-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint.
Previous report
Interest expense was $18.2 million in the thirteen weeks ended September 28, 2025, which was comparable to interest expense of $20.0 million in the thirteen weeks ended September 29, 2024. The third quarter of 2025 includes lower interest expense due to the lower outstanding debt balance compared to the third quarter of 2024.
Previous report
Other expense (income), net
Previous report
Thirty-nine Weeks Ended September 28, 2025 Compared to the Thirty-nine Weeks Ended September 29, 2024
Previous report
(1)Not meaningful.
Previous report
Net sales
Previous report
Net sales were $2,090.1 million for the thirty-nine weeks ended September 28, 2025 compared to $2,032.7 million for the thirty-nine weeks ended September 29, 2024, an increase of $57.4 million, or 2.8 percent. The higher net sales from the thirty-nine weeks ended September 29, 2024 was driven primarily by the acquisition of Supreme in July of 2024, which contributed $131.5 million of incremental sales in the first half of 2025. Excluding the impact of Supreme, the $74.1 million decrease in net sales from the thirty-nine weeks ended September 29, 2024 was driven primarily by lower sales unit volume of $121.4 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $48.8 million. Overall end market demand was weaker in the first three quarters of 2025 compared to the first three quarters of 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $1.5 million during the thirty-nine weeks ended September 28, 2025 as compared to the thirty-nine weeks ended September 29, 2024.
Previous report
Cost of products sold
Previous report
Cost of products sold increased by $71.0 million, or 5.2 percent, to $1,430.0 million (68.4 percent of net sales) in the thirty-nine weeks ended September 28, 2025 as compared to $1,359.0 million (66.9 percent of net sales) in the thirty-nine weeks ended September 29, 2024. The inclusion of Supreme in the thirty-nine weeks ended September 28, 2025 resulted in an incremental $86.4 million of cost of products sold for the first half of 2025. Excluding the impact of Supreme, the $15.4 million decrease in cost of products sold was driven primarily by lower sales unit volume of $82.2 million, partially offset by the combined net impact of costs and mix of $66.8 million. In the first three quarters of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage and gross tariffs.
Previous report
Selling, general and administrative expenses
Previous report
Restructuring charges
Previous report
Restructuring charges were $13.9 million in the thirty-nine weeks ended September 28, 2025, as compared to restructuring charges of $11.0 million in the thirty-nine weeks ended September 29, 2024. Charges in both periods are largely related to severance costs and other employee-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint.
Previous report
Interest expense
Previous report
Interest expense was $56.5 million in the thirty-nine weeks ended September 28, 2025 as compared to $54.7 million in the thirty-nine weeks ended September 29, 2024. The increase in interest expense for the thirty-nine weeks ended September 28, 2025 is due to the higher average outstanding debt balance during the thirty-nine weeks ended September 28, 2025 as a result of the debt refinancing transaction in the second quarter of 2024 associated with the acquisition of Supreme. The second quarter of 2024 includes $6.5 million of nonrecurring interest expense in connection with the debt refinancing transaction, including the write-off of deferred financing fees.
Previous report
Other income, net
Previous report
Other income, net was $0.1 million in the thirty-nine weeks ended September 28, 2025, a decline of $4.9 million as compared to other income, net of $5.0 million in the thirty-nine weeks ended September 29, 2024. This decrease was due primarily to lower transactional foreign currency gains in the first three quarters of 2025, as compared to the first three quarters of 2024, due to fluctuations in exchange rates.
Previous report
Income taxes
Previous report
The effective income tax rates for thethirty-nine weeks ended September 28, 2025 and September 29, 2024, were 23.4 percent and 24.6 percent, respectively. The net decrease in effective tax rate between the periods is primarily due to changes in foreign exclusions, lower state and local income taxes, and changes in foreign income inclusions with offsetting tax credits. These were partially offset by increases in the valuation allowance, nondeductible compensation, reductions in favorable return-to provision adjustments and the stock compensation windfall benefit for shares which vested.
Previous report
The difference between our effective income tax rate for thethirty-nine weeks ended September 28, 2025, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of nondeductible compensation, net changes in state and local income taxes, and increases in the valuation allowance. These were partially offset by foreign exclusions, favorable return-to-provision adjustments and the release of uncertain tax positions.
Previous report
The difference between our effective income tax rate for the thirty-nine weeks ended September 29, 2024, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of state and local income taxes, foreign income inclusions with offsetting tax credits, nondeductible compensation and nondeductible acquisition-related transaction costs, partially offset by favorable return-to-provision adjustments, thestock compensation windfall benefitfor shares which vested and the mix of earnings in jurisdictions with differing tax rates.
Previous report
Net cash used in financing activities was $79.8 million in the thirty-nine weeks ended September 28, 2025 as compared to net cash provided by financing activities of $331.3 million in the thirty-nine weeks ended September 29, 2024. In the first three quarters of 2024, our $712.5 million term loan was repaid, and replaced with $700.0 million of Senior Notes as a result of the refinancing transaction completed in the second quarter. In the first three quarters of 2024, we used $430.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement to fund the Supreme acquisition, and subsequently paid down $55 million, net on our revolving credit facility. The first three quarters of 2024 also included the payment of $17.8 million of financing fees associated with the refinancing transaction. The first three quarters of 2025 includes $18.1 million of stock repurchases as compared to $6.5 million of stock repurchases in the first three quarters of 2024.
Reworded paragraphs (24)
Previous wording
Certain statements contained in this Quarterly Report on Form 10-Q, other than purely historical information, including, but not limited to, estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements. Statements preceded by, followed by or that otherwise include the word “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 within Part I, Item 1A and in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 30, 2025 and June 29, 2025 within Part II, Item 1A.
Current wording
Certain statements contained in this Quarterly Report on Form 10-Q, other than purely historical information, including, but not limited to, estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements. Statements preceded by, followed by or that otherwise include the word “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 within Part I, Item 1A.
Previous wording
•Changes in the anticipated timing for closing the combination of MasterBrand with American Woodmark (the “Transaction”), including the impact of the U.S. government shutdown;
Current wording
•Changes in the anticipated timing for closing the combination of MasterBrand with American Woodmark (the “Transaction”);
Previous wording
Founded over 70 years ago, we are a leading manufacturer of residential cabinets in North America. Our superior product quality, innovative design and service excellence drives a compelling value proposition. We have insight into the fashion and features consumers desire, which we use to tailor our product lines across price points. Our volume leadership allows us to achieve an advantaged cost structure and service platform by standardizing product platforms and components to the greatest extent possible—resulting in an improved facility footprint and an efficient supply chain. Further, our decades of experience have informed how we use global geographies to optimize procurement and manufacturing costs. Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that cannot be easily replicated. We expect to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization to ordering to delivery and installation.
Current wording
Founded over 70 years ago, we are the largest manufacturer of residential cabinets in North America. Our superior product quality, innovative design and service excellence drives a compelling value proposition. We have insight into the fashion and features consumers desire, which we use to tailor our product lines across price points. Our volume leadership allows us to achieve an advantaged cost structure and service platform by standardizing product platforms and components to the greatest extent possible—resulting in an improved facility footprint and an efficient supply chain. Further, our decades of experience have informed how we use global geographies to optimize procurement and manufacturing costs. Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that cannot be easily replicated. We expect to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization to ordering to delivery and installation.
Previous wording
On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark in an all-stock transaction. Merger Sub, a direct wholly owned subsidiary of the Company, will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company. The closing of the Merger, which is expected to occur in early 2026, is subject to the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of other customary closing conditions. Both companies received the necessary shareholder approval at their respective special meetings of shareholders held on October 30, 2025.
Current wording
On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark in an all-stock transaction. Merger Sub, a direct wholly owned subsidiary of the Company, will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company. The closing of the Merger, which is expected to occur in the second calendar quarter of 2026, is subject to the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of other customary closing conditions. Both companies received the necessary shareholder approval at their respective special meetings of shareholders held on October 30, 2025.
Previous wording
The Company continues to actively monitor recent trade policy and tariff announcements, includingthe recently announced Section 232 lumber tariffs, effective October 14, 2025. Increased restrictions on global trade, including an increase in U.S. tariffs and any retaliatory responses thereto, have resulted in and could further result in, among other things, increased input costs, supply chain disruptions, decreased consumer demand and volatility in foreign exchange rates and financial markets. We continue to analyze the impact of these actions and adjust our mitigation strategy, including pricing, productivity and repositioning our supply chain to offset the impact of the tariff exposure as trade policy evolves. The uncertain and evolving market dynamics and global trade environment could have a material adverse effect on the Company’s business, financial condition, and results of operations.
Current wording
The Company continues to actively monitor recent trade policy and tariff announcements, including the Section 232 tariffs on timber, lumber, and derivative wood products (including kitchen cabinets, vanities and related wood products), effective October 14, 2025. As a result of the Section 232 proceedings, a 10 percent tariff applies to softwood lumber and timber imports, and a 25 percent tariff applies to kitchen cabinets and vanities, although the tariff on cabinets and vanities may increase after January 1, 2027. Increased restrictions on global trade, including an increase in U.S. tariffs and any retaliatory responses thereto, have resulted in and could further result in, among other things, increased input costs, supply chain disruptions, decreased consumer demand and volatility in foreign exchange rates and financial markets. We continue to analyze the impact of these actions and adjust our mitigation strategy, including pricing, productivity and repositioning our supply chain to offset the impact of the tariff exposure as trade policy evolves. The uncertain and evolving market dynamics and global trade environment could have a material adverse effect on the Company’s business, financial condition, and results of operations.
Previous wording
On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was enacted into U.S. law. The OBBBA includes changes to several corporate tax provisions, including tax deductions for qualified research expenditures, changes to business interest expense limitations and bonus depreciation. The OBBBA legislation does not materially impact our 2025 annual effective tax rate but is expected to reduce 2025 cash taxes.
Current wording
On July 4, 2025, the "One Big Beautiful Bill Act" ("OBBBA") was enacted into U.S. law. The OBBBA includes changes to several corporate tax provisions, including tax deductions for qualified research expenditures, U.S. international tax provisions, changes to business interest expense limitations and bonus depreciation. The OBBBA legislation does not materially impact our 2025 or 2026 annual effective tax rates but reduced 2025 cash taxes paid.
Previous wording
more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”). The model rules include qualified domestic minimum top-up taxes, income inclusion rules, and undertaxed profit rules all aimed to ensure that multinationals pay a minimum effective corporate tax rate of 15 percent in each jurisdiction in which they operate, with some rules effective in 2024, 2025 or 2026. The Pillar Two legislation, as enacted in certain jurisdictions in which we operate, does not materially impact our 2025 annual effective tax rate but is expected to unfavorably impact our annual effective tax rate in 2026. Additionally, material changes to our separate legal entity pre-tax book income and structure, the valuation allowance, nondeductible acquisition-related transaction costs, enacted local legislation, or changes in jurisdictions in which we operate could also impact our effective tax rate in the fourth quarter of 2025 or fiscal 2026.
Current wording
In 2024, certain jurisdictions in which we operate enacted, or announced their intention to enact, legislation consistent with one or more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules ("Pillar Two"). The model rules include qualified domestic minimum top-up taxes, income inclusion rules, and undertaxed profit rules all aimed at ensuring that multinationals pay a minimum effective corporate tax rate of 15 percent in each jurisdiction in which they operate, with some rules effective in 2024, 2025 and 2026. The Pillar Two legislation was enacted in certain jurisdictions in which we operate and unfavorably impacts our annual effective tax rate. Further changes to our entity structure, enacted local legislation, or changes in jurisdictions in which we operate could also impact our effective tax rate in fiscal 2026.
Previous wording
Unless the context otherwise requires, references to years and quarters contained in this Quarterly Report on Form 10-Q pertain to our fiscal years and fiscal quarters. Additionally, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “2025,” or “fiscal 2025” refers to our 2025 fiscal year that is a 52-week period that will end on December 28, 2025; and (2) “2024,” or “fiscal 2024” refers to our 2024 fiscal year that was a 52-week period that ended on December 29, 2024. Furthermore, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “the third quarter of 2025” refers to the thirteen week period that ended on September 28, 2025; (2) “the third quarter of 2024” refers to the thirteen week period that ended on September 29, 2024; (3) “the first three quarters of 2025” refers to the thirty-nine weeks ended September 28, 2025; and (4) “the first three quarters of 2024” refers to thethirty-nine weeks ended September 29, 2024.
Current wording
Unless the context otherwise requires, references to years and quarters contained in this Quarterly Report on Form 10-Q pertain to our fiscal years and fiscal quarters. Additionally, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “2026,” or “fiscal 2026” refers to our 2026 fiscal year that is a 52-week period that will end on December 27, 2026; and (2) “2025,” or “fiscal 2025” refers to our 2025 fiscal year that was a 52-week period that ended on December 28, 2025. Furthermore, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “the first quarter of 2026” refers to the thirteen week period that ended on March 29, 2026; and (2) “the first quarter of 2025” refers to the thirteen week period that ended on March 30, 2025.
Previous wording
Net sales were $698.9 million for the thirteen weeks ended September 28, 2025 compared to $718.1 million for the thirteen weeks ended September 29, 2024, a decline of $19.2 million, or 2.7 percent. The lower net sales from the thirteen weeks ended September 29, 2024 was driven primarily by lower sales unit volume of $38.3 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $19.3 million. Overall end market demand was weaker in the third quarter of 2025 compared to the third quarter of 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $0.2 million during the thirteen weeks ended September 28, 2025 as compared to the thirteen weeks ended September 29, 2024.
Current wording
Net sales were $618.0 million for the thirteen weeks ended March 29, 2026 compared to $660.3 million for the thirteen weeks ended March 30, 2025, a decline of $42.3 million, or 6.4 percent. The lower net sales from the thirteen weeks ended March 30, 2025 was driven primarily by lower sales unit volume of $42.0 million and the unfavorable combined net impact of price and mix on our overall average selling price of $1.1 million. Overall end market demand was weaker in the first quarter of 2026 compared to the first quarter of 2025 in the repair and remodel and single-family new construction markets. Foreign currency impact was favorable by $0.8 million during the thirteen weeks ended March 29, 2026 as compared to the thirteen weeks ended March 30, 2025.
Previous wording
Compared to the thirteen weeks ended September 29, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, declined $1.6 million, or 0.4 percent, and net sales to retailers, including through their respective retail internet website portals, declined $19.2 million, or 8.3 percent. Net sales directly to builders increased $1.6 million, or 1.7 percent.
Current wording
Compared to the thirteen weeks ended March 30, 2025, net sales to dealers, whose end customers include builders, professional trades and home remodelers, declined $25.3 million, or 7.2 percent, net sales to retailers, including through their respective retail internet website portals, declined $7.0 million, or 3.1 percent, and net sales directly to builders declined $10.0 million, or 11.9 percent.
Previous wording
Cost of products sold increased by $0.6 million, or 0.1 percent, to $480.7 million (68.8 percent of net sales) in the thirteen weeks ended September 28, 2025 as compared to $480.1 million (66.9 percent of net sales) in the thirteen weeks ended September 29, 2024. The $0.6 million increase in cost of products sold was driven primarily by the combined net impact of costs and mix of $26.4 million, partially offset by lower sales unit volume of $25.8 million. In the third quarter of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage and gross tariffs.
Current wording
Cost of products sold increased by $3.3 million, or 0.7 percent, to $461.4 million (74.7 percent of net sales) in the thirteen weeks ended March 29, 2026 as compared to $458.1 million (69.4 percent of net sales) in the thirteen weeks ended March 30, 2025. The increase in cost of products sold was driven primarily by the combined net impact of costs and mix of $31.9 million, partially offset by lower sales unit volume of $28.6 million. In the first quarter of 2026, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage.
Previous wording
Selling, general and administrative expenses increased by $30.1 million, or 6.7 percent, to $480.9 million (23.0 percent of net sales) in the thirty-nine weeks ended September 28, 2025 compared to $450.8 million (22.2 percent of net sales) in the thirty-nine weeks ended September 29, 2024. The increase in the thirty-nine weeks ended September 28, 2025 is primarily due to the inclusion of Supreme during the first half of 2025 ($26.1 million), continued investments in our strategic initiatives ($6.2 million), specifically digital and technology investments and marketing and increased associate-related costs, net of lower variable compensation ($3.2 million). These increases were partially offset by lower distribution and commission costs ($5.4 million), as a result of the decrease in sales unit volume.
Current wording
Selling, general and administrative expenses increased by $1.9 million, or 1.2 percent, to $155.9 million (25.2 percent of net sales) in the thirteen weeks ended March 29, 2026 compared to $154.0 million (23.3 percent of net sales) in the thirteen weeks ended March 30, 2025. The increase in the thirteen weeks ended March 29, 2026 is primarily due to increased acquisition-related costs ($4.0 million) and distribution costs ($2.5 million). These increases were partially offset by lower commission costs ($1.3 million), as a result of the decrease in sales unit volume, advertising costs ($0.9 million), professional fees ($0.9 million) and cost savings initiatives ($0.4 million).
Previous wording
Other expense, net was $0.1 million in the thirteen weeks ended September 28, 2025, a decline of $1.9 million as compared to other income, net of $1.8 million in the thirteen weeks ended September 29, 2024. This decrease was due primarily to lower transactional foreign currency gains in the third quarter of 2025 as compared to the third quarter of 2024, due to fluctuations in exchange rates.
Current wording
Other income, net was $0.8 million in the thirteen weeks ended March 29, 2026, an increase of $1.2 million as compared to other expense, net of $0.4 million in the thirteen weeks ended March 30, 2025. This increase was primarily due to higher transactional foreign currency gains in the first quarter of 2026, as compared to the first quarter of 2025, due to fluctuations in exchange rates.
Previous wording
Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirty-nine week periods ended September 28, 2025 and September 29, 2024 were as follows:
Current wording
Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirteen week periods ended March 29, 2026 and March 30, 2025 were as follows:
Previous wording
The effective income tax rates for thethirteen weeks ended September 28, 2025 and September 29, 2024, were 22.6 percent and 26.1 percent, respectively. The net decrease in the effective tax rate between the periods is primarily due to favorable changes in foreign exclusions, lower state and local income taxes, return-to-provision adjustments, and foreign income inclusions with offsetting tax credits. These were partially offset by increases in the valuation allowance and nondeductible compensation.
Current wording
The effective income tax rates for thethirteen weeks ended March 29, 2026 and March 30, 2025, were 57.3 percent and 23.1 percent, respectively. The net increase in effective tax rate between the periods is primarily due to unfavorable changes in pre-tax income relative to permanent tax adjustments, nondeductible acquisition-related transaction costs, foreign taxes, deferred tax adjustments due to foreign tax election and foreign exclusions, partially offset by lower state and local income taxes and a reduction in valuation allowance.
Previous wording
The difference between our effective income tax rate for the thirteen weeks ended September 29, 2024, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of state and local income taxes, nondeductible compensation, nondeductible acquisition-related transaction costs and foreign income inclusions with offsetting tax credits. These were partially offset by favorable return-to-provision adjustments and the mix of earnings in jurisdictions with differing tax rates.
Current wording
The difference between our effective income tax rate for thethirteen weeks ended March 29, 2026, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of nondeductible compensation, deferred tax adjustments due to foreign tax elections, nondeductible acquisition-related transaction costs and foreign taxes, partially offset by favorable adjustments for foreign exclusions and tax credits.
Previous wording
The difference between our effective income tax rate for thethirteen weeks ended September 28, 2025, and the U.S. statutory rate of 21.0 percent is primarily dueto the unfavorable impact of nondeductible compensation, state and local income taxes, increases in the valuation allowance and foreign income inclusions net of foreign tax credits. These were partially offset by foreign exclusions and favorable return-to-provision adjustments.
Current wording
The difference between our effective income tax rate for the thirteen weeks ended March 30, 2025, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of net changes in state and local income taxes, nondeductible compensation, foreign income taxed at higher rates, an increase in the valuation allowance and foreign income inclusions net of foreign tax credits. These were partially offset by benefits for return-to-provision adjustments, thestock compensation windfall benefitfor shares which vested, tax credits, and foreign exclusions.
Previous wording
Our operating income is generated by our subsidiaries. There are generally no restrictions on the ability of our subsidiaries to pay dividends or make other distributions to MasterBrand, other than the fact our subsidiaries have financial obligations that must be satisfied before funding us and such dividends are subject to applicable local law and may be limited due to terms of other contractual arrangements, including our indebtedness. We periodic ally review our portfolio of brands, manufacturing and supply chain footprint, and evaluate potential strategic transactions to increase stockholder value. However, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, or what impact any such transactions could have on our results of operations, cash flows or financial condition. Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section entitled “Risk Factors” within Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, and within Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 30, 2025 and June 29, 2025.
Current wording
Our operating income is generated by our subsidiaries. There are generally no restrictions on the ability of our subsidiaries to pay dividends or make other distributions to MasterBrand, other than the fact our subsidiaries have financial obligations that must be satisfied before funding us and such dividends are subject to applicable local law and may be limited due to terms of other contractual arrangements, including our indebtedness. We periodic ally review our portfolio of brands, manufacturing and supply chain footprint, and evaluate potential strategic transactions to increase shareholder value. However, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, or what impact any such transactions could have on our results of operations, cash flows or financial condition. Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section entitled “Risk Factors” within Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 28, 2025.
Previous wording
On November 18, 2022, we entered into a 5-year, $1.25 billion credit agreement, consisting of a $750.0 million term loan and a $500.0 million revolving credit facility. The 2022 credit agreement was secured by certain assets as well as the guarantee of certain of our subsidiaries. On June 27, 2024, the Company refinanced this debt by completing the Offering of $700.0 million aggregate principal amount of Senior Notes and entered into the 2024 Credit Agreement. The Company used the funds from the refinancing transaction, and cash on-hand, to: 1) refinance the 2022 credit agreement (including repaying all amounts outstanding under the existing term loan, inclusive of accrued and unpaid interest), 2) fund the acquisition of Supreme on July 10, 2024, and 3) to pay all fees and expenses related to the foregoing transactions. In July 2024, upon closing, we funded the acquisition with a combination of cash on hand and $430.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement.
Current wording
On November 18, 2022, we entered into a 5-year, $1.25 billion credit agreement, consisting of a $750.0 million term loan and a $500.0 million revolving credit facility. On June 27, 2024, the Company refinanced this debt by completing the Offering of $700.0 million aggregate principal amount of Senior Notes and entered into the 2024 Credit Agreement. The Company used the funds from the refinancing transaction, and cash on-hand, to: (1) refinance the 2022 credit agreement (including repaying all amounts outstanding under the existing term loan, inclusive of accrued and unpaid interest), (2) fund the acquisition of Supreme on July 10, 2024, and (3) to pay all fees and expenses related to the foregoing transactions. In July 2024, upon closing, we funded the acquisition with a combination of cash on hand and $430.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement.
Previous wording
The 2024 Credit Agreement contains a financial covenant that does not permit the Company to allow its net leverage ratio to exceed, in the case of any fiscal quarter ending on or following March 30, 2025,3.25 to 1.00 or, if the Company consummates any material acquisition, then the Company’s net leverage ratio shall not exceed 3.75 to 1.00 for the applicable fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter. The Company is also required to maintain a minimum interest coverage ratio of 3.00 to 1.00. The 2024 Credit Agreement also contains customary events of default. The occurrence of an event of default could result in the termination of commitments under the revolving credit facility, the acceleration of all outstanding amounts thereunder and the requirement to cash collateralize outstanding letters of credit. The Company was in compliance with all of its debt covenants under the 2024 Credit Agreement as of September 28, 2025.
Current wording
The 2024 Credit Agreement contains a financial covenant that does not permit the Company to allow its net leverage ratio to exceed, in the case of any fiscal quarter ending on or following March 30, 2025,3.25 to 1.00 or, if the Company consummates any material acquisition, then the Company’s net leverage ratio shall not exceed 3.75 to 1.00 for the applicable fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter. The Company is also required to maintain a minimum interest coverage ratio of 3.00 to 1.00. The 2024 Credit Agreement also contains customary events of default. The occurrence of an event of default could result in the termination of commitments under the revolving credit facility, the acceleration of all outstanding amounts thereunder and the requirement to cash collateralize outstanding letters of credit.
Previous wording
As of September 28, 2025, we had $954.1 million outstanding in third-party borrowings, net of deferred financing fees. In conjunction with the Merger, the Company amended its credit agreement to obtain a $375.0 million term loan that will be used to settle American Woodmark’s existing indebtedness, the funding of which is dependent on the closing of the Merger. The interest rate of the term loan is a variable rate based on SOFR and the debt will have a maturity coterminous with the existing credit agreement in June 2029. See Note 10, "Debt," for a discussion of our original credit agreement.
Current wording
The Company previously amended its 2024 Credit Agreement on November 3, 2025 to obtain $375.0 million of delayed draw term loan commitments that will be used to repay and terminate American Woodmark’s existing indebtedness, the funding of which is dependent on the closing of the Merger. The interest rate of the delayed draw term loans is a variable rate based on the SOFR, plus, a margin depending on the Company’s net leverage ratio. The delayed draw term loans will have a maturity coterminous with the revolving credit facility under the 2024 Credit Agreement in June 2029, and the amendment did not result in any material changes to the covenants in place under the 2024 Credit Agreement.
Previous wording
Below is a summary of cash flows for the thirty-nine weeks ended September 28, 2025 and September 29, 2024.
Current wording
Below is a summary of cash flows for the thirteen weeks ended March 29, 2026 and March 30, 2025.
Previous wording
Net cash provided by operating activities was $108.8 million in the first three quarters of 2025 as compared to $176.9 million in the first three quarters of 2024. Net income contributed $68.7 million to operating cash flow in the first three quarters of 2025, down from $111.9 million in the first three quarters of 2024. In the first three quarters of 2025, accounts receivable increased $26.6 million from the seasonally lower fiscal 2024 ending balance, compared to an increase of $2.3 million in the first three quarters of 2024. In the first three quarters of 2025, inventory declined $4.4 million, as compared to an increase in inventory of $32.5 million in the first three quarters of 2024. The minimal change in inventory in the first three quarters of 2025 is reflective of inventory management efforts. In the first three quarters of 2025, accounts payable decreased $2.2 million compared to an increase of $18.0 million in the first three quarters of 2024. The reduced favorability in accounts payable in 2025 was a result of inventory management efforts. Accrued expenses and other current liabilities declined $27.5 million in the first three quarters of 2025 as compared to a decrease of $3.5 million in 2024. The timing of interest payments on the Company’s Senior Notes contributed to the unfavorability in 2025. Interest payments on the Senior Notes began in 2025. Depreciation in the first three quarters of 2025 was $51.2 million as compared to $39.5 million in the first three quarters of 2024. The increase is due to the inclusion of Supreme for the full year-to-date period in 2025.
Current wording
Net cash used in operating activities was $133.0 million in the first quarter of 2026 as compared to $31.4 million in the first quarter of 2025. Net loss decreased operating cash flow by $15.4 million in the first quarter of 2026, compared to net income of $13.3 million in the first quarter of 2025. In the first quarter of 2026, accounts receivable increased $67.6 million from the seasonally lower fiscal 2025 ending balance, compared to an increase of $30.0 million in the first quarter of 2025. Improved timing of cash collections resulted in a lower than typical accounts receivable balance at December 28, 2025 that contributed to the higher seasonal growth in the first quarter of 2026. In the first quarter of 2026, inventory increased $2.8 million, as compared to an increase in inventory of $12.2 million in the first quarter of 2025. There was minimal change in inventory in the first quarter of 2026. In the first quarter of 2026, accounts payable decreased $24.6 million compared to a decrease of $0.1 million in the first quarter of 2025. The reduced favorability in accounts payable in the first quarter of 2026 was due to minimal change in inventory. Other current assets negatively impacted cash by $17.2 million in the first quarter of 2026, primarily due to an increase in our federal income tax receivable of $13.2 million due to the current period loss before taxes, as compared to a decrease of $5.9 million in the first quarter of 2025.
Previous wording
Net cash used in investing activities was $40.1 million in the first three quarters of 2025, compared to $541.9 million in the first three quarters of 2024. The year-over-year decrease is due to the acquisition of Supreme, net of cash acquired, of $515.7 million and increased capital expenditures in the third quarter of 2024. This year-over-year decrease is partially offset by increased capital expenditures as compared to the prior year.
Current wording
Net cash used in investing activities was $13.0 million in the first quarter of 2026, compared to $9.8 million in the first quarter of 2025. The year-over-year increase is due to increased capital expenditures as compared to the prior year.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
As of March 29, 2026, we had $1,084.9 million outstanding in third-party borrowings, net of deferred financing fees.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
In 2024, certain jurisdictions in which we operate enacted, or announced their intention to enact, legislation consistent with one or
Previous report — wording carried elsewhere
Our condensed consolidated income before taxes, income tax expense, and effective tax rate for thethirteen weeks ended September 28, 2025 and September 29, 2024 were as follows:
Previous report — wording carried elsewhere
The following discussion of condensed consolidated results of operations refers to the thirty-nine weeks ended September 28, 2025 compared to the thirty-nine weeks ended September 29, 2024.
Previous report — wording carried elsewhere
Compared to the thirty-nine weeks ended September 29, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $93.8 million, or 8.8 percent, and net sales to retailers, including through their respective retail internet website portals, declined $47.3 million, or 6.7 percent. Net sales directly to builders increased $10.9 million, or 4.1 percent.