MasterBrand (MBC) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 declined 6.4% year-over-year to $618 million, reflecting weaker demand, slower housing completions, and unfavorable price/mix.

• Net loss was $15.4 million versus net income of $13.3 million in Q1 2025, driven by lower sales, higher costs, and increased deal-related and restructuring charges.

• Adjusted EBITDA margin fell to 4.5% from 10.2% year-over-year, impacted by lower volume, inflation, tariffs, and unfavorable mix.

• Disciplined cost actions, including a $30 million reduction plan and workforce reductions, partially offset market headwinds.

• Pending merger with American Woodmark is expected to close in Q2 2026, with integration and synergy plans progressing.

Financial highlights

• Gross profit margin declined to 25.3% from 30.6% year-over-year, with gross profit at $156.6 million.

• Adjusted EBITDA was $28 million, down from $67.1 million; adjusted diluted EPS was $0.06, down from $0.18.

• Net loss was $15.4 million; diluted loss per share was $(0.12).

• Free cash outflow was $146.2 million, compared to $41.2 million outflow in the prior year.

• Net cash used in operating activities was $133 million, up from $31.4 million in Q1 2025.

Outlook and guidance

• Q2 2026 net sales expected to decline mid- to high-single digits year-over-year, with sequential improvement anticipated.

• Q2 adjusted EBITDA guidance: $51–$61 million (margin 7.8%–8.8%); adjusted diluted EPS: $0.03–$0.13.

• Full-year 2026 market expected to be down mid-single digits; gross tariff costs to be 5–6% of net sales.

• Free cash flow for 2026 expected to exceed net income.

• Guidance excludes any impact from the pending American Woodmark merger.