Mohawk's Q3 Earnings Dip Despite Sales Bump, Currency Boosts Comprehensive Income

TL;DR

**Mohawk's Q3 profit plunge is a red flag, despite a small sales bump; the currency tailwind is masking deeper operational issues.**

AI Summary

Mohawk Industries, Inc. reported a mixed financial performance for the three and nine months ended September 27, 2025. For the three-month period, net sales increased slightly to $2,757.9 million from $2,719.0 million in the prior year, a 1.4% rise. However, net earnings attributable to Mohawk Industries, Inc. significantly decreased by 32.8% to $108.8 million from $162.0 million. Basic earnings per share also fell to $1.75 from $2.57. For the nine-month period, net sales declined by 1.4% to $8,085.7 million from $8,199.7 million. Net earnings attributable to Mohawk Industries, Inc. for the nine months dropped by 22.7% to $327.9 million from $424.5 million, with basic earnings per share decreasing to $5.26 from $6.69. The company saw a substantial increase in foreign currency translation adjustments, contributing $548.8 million to other comprehensive income for the nine months, compared to a loss of $124.5 million in the prior year. Short-term debt and current portion of long-term debt decreased significantly to $175.6 million from $559.4 million as of December 31, 2024, while long-term debt, less current portion, increased to $1,743.3 million from $1,677.4 million.

Why It Matters

Mohawk's mixed results signal a challenging environment for investors, with declining profitability despite a slight revenue increase in Q3. The significant drop in net earnings and EPS for both the quarter and year-to-date could pressure MHK's stock price, as investors prioritize bottom-line growth. Employees might face increased scrutiny on efficiency given the higher cost of sales and SG&A expenses. For customers, the slight sales increase suggests continued demand, but the company's ability to manage costs will dictate future pricing and product availability in a competitive flooring market. The substantial positive foreign currency translation adjustment highlights the impact of global operations and currency fluctuations on the company's overall financial health, a key factor for market analysts.

Risk Assessment

Risk Level: medium — The risk level is medium due to a significant decline in net earnings and basic EPS for both the three-month (32.8% and 31.9% respectively) and nine-month periods (22.7% and 21.3% respectively), indicating profitability pressures. While net sales saw a modest 1.4% increase in Q3, the nine-month sales decreased by 1.4%, suggesting inconsistent revenue generation. The increase in cost of sales by $76.6 million and selling, general and administrative expenses by $37.9 million for the three months ended September 27, 2025, compared to the prior year, points to rising operational costs impacting the bottom line.

Analyst Insight

Investors should exercise caution and closely monitor Mohawk's upcoming earnings calls for management's strategy to address declining profitability and rising costs. Consider holding existing positions but deferring new investments until there's clear evidence of improved net earnings and sustained revenue growth, especially given the mixed sales performance and significant EPS drop.

Financial Highlights

revenue

$8,085.7M

total Debt

$1,918.9M

net Income

$327.9M

eps

$5.26

cash Position

$516.2M

revenue Growth

-1.4%

Revenue Breakdown

Key Numbers

• $2,757.9M — Net Sales (Q3 2025) (Increased 1.4% from $2,719.0M in Q3 2024)
• $108.8M — Net Earnings (Q3 2025) (Decreased 32.8% from $162.0M in Q3 2024)
• $1.75 — Basic EPS (Q3 2025) (Decreased from $2.57 in Q3 2024)
• $8,085.7M — Net Sales (YTD 2025) (Decreased 1.4% from $8,199.7M in YTD 2024)
• $327.9M — Net Earnings (YTD 2025) (Decreased 22.7% from $424.5M in YTD 2024)
• $548.8M — Foreign Currency Translation Adjustments (YTD 2025) (Significant positive swing from a $124.5M loss in YTD 2024)
• $175.6M — Short-term debt (Sept 2025) (Decreased from $559.4M at Dec 2024)
• $1,743.3M — Long-term debt (Sept 2025) (Increased from $1,677.4M at Dec 2024)
• $2,103.0M — Cost of Sales (Q3 2025) (Increased from $2,026.4M in Q3 2024)
• $518.2M — SG&A Expenses (Q3 2025) (Increased from $480.3M in Q3 2024)

Key Players & Entities

• MOHAWK INDUSTRIES INC (company) — registrant
• $2,757.9 million (dollar_amount) — Net sales for three months ended September 27, 2025
• $2,719.0 million (dollar_amount) — Net sales for three months ended September 28, 2024
• $108.8 million (dollar_amount) — Net earnings attributable to Mohawk Industries, Inc. for three months ended September 27, 2025
• $162.0 million (dollar_amount) — Net earnings attributable to Mohawk Industries, Inc. for three months ended September 28, 2024
• $8,085.7 million (dollar_amount) — Net sales for nine months ended September 27, 2025
• $8,199.7 million (dollar_amount) — Net sales for nine months ended September 28, 2024
• $327.9 million (dollar_amount) — Net earnings attributable to Mohawk Industries, Inc. for nine months ended September 27, 2025
• $424.5 million (dollar_amount) — Net earnings attributable to Mohawk Industries, Inc. for nine months ended September 28, 2024
• $548.8 million (dollar_amount) — Foreign currency translation adjustments for nine months ended September 27, 2025

FAQ

Risk Factors

• Foreign Currency Fluctuations [medium — financial]: Significant positive foreign currency translation adjustments of $548.8 million for the nine months ended September 27, 2025, represent a substantial swing from a loss of $124.5 million in the prior year. While this positively impacted comprehensive income, volatility in currency markets poses an ongoing risk.
• Debt Management [medium — financial]: Short-term debt and current portion of long-term debt decreased significantly to $175.6 million from $559.4 million. However, long-term debt, less current portion, increased to $1,743.3 million from $1,677.4 million, indicating a continued reliance on long-term financing.
• Cost of Sales Increase [medium — operational]: Cost of sales increased to $2,103.0 million in Q3 2025 from $2,026.4 million in Q3 2024. This rise, despite a modest increase in net sales, contributed to a lower gross profit.
• SG&A Expense Growth [medium — operational]: Selling, general, and administrative expenses rose to $518.2 million in Q3 2025 from $480.3 million in Q3 2024. This increase outpaced net sales growth, further pressuring operating income.
• Declining Net Sales [medium — market]: The company experienced a 1.4% decline in net sales for the nine-month period ended September 27, 2025, totaling $8,085.7 million compared to $8,199.7 million in the prior year, indicating potential market headwinds.
• Decreased Net Earnings [high — financial]: Net earnings attributable to Mohawk Industries, Inc. saw a significant decrease of 32.8% to $108.8 million in Q3 2025 and a 22.7% decrease to $327.9 million for the nine-month period, signaling profitability challenges.

Industry Context

Mohawk Industries operates in the highly competitive flooring industry. The sector is influenced by macroeconomic factors such as housing starts, consumer spending on home improvement, and raw material costs. Competitors range from large diversified manufacturers to specialized regional players. Trends include a growing demand for sustainable and innovative flooring solutions, as well as the impact of global supply chain dynamics.

Regulatory Implications

As a publicly traded company, Mohawk Industries is subject to SEC regulations and accounting standards, requiring transparent financial reporting. Changes in international trade policies or tariffs could impact its global operations and profitability. Environmental regulations related to manufacturing processes and materials also present compliance considerations.

What Investors Should Do

1. Monitor SG&A and Cost of Sales trends
2. Analyze the impact of foreign currency fluctuations
3. Assess debt structure and repayment strategy
4. Evaluate the drivers of declining net sales

Key Dates

• 2025-09-27: End of third quarter and nine-month period — Reporting period for the financial results discussed in the 10-Q, showing mixed sales performance and declining net earnings.
• 2024-12-31: End of fiscal year 2024 — Reference point for debt levels, with short-term debt at $559.4 million and long-term debt at $1,677.4 million.

Glossary

Net sales

The total revenue generated from the sale of goods and services after deducting returns, allowances, and discounts. (Indicates the company's top-line performance and market demand for its products.)

Net earnings attributable to Mohawk Industries, Inc.

The portion of the company's profit that belongs to its shareholders after accounting for all expenses, taxes, and noncontrolling interests. (Represents the bottom-line profitability available to common stockholders.)

Basic earnings per share

Net income available to common shareholders divided by the weighted-average number of common shares outstanding. (A key metric for investors to assess profitability on a per-share basis.)

Other comprehensive income (loss)

Unrealized gains or losses that are not included in net income but are reported in a separate section of the income statement. (Includes items like foreign currency translation adjustments, which can significantly impact overall equity.)

Foreign currency translation adjustments

Gains or losses arising from the conversion of financial statements of foreign subsidiaries into the reporting currency of the parent company. (Can cause significant fluctuations in comprehensive income, as seen in the $548.8 million gain for the nine months ended September 27, 2025.)

Cost of sales

The direct costs attributable to the production or purchase of the goods sold by a company. (A major expense that directly impacts gross profit margins.)

Selling, general and administrative expenses (SG&A)

Expenses incurred in the normal course of business, not directly related to the production of goods or services. (Reflects the company's operational efficiency and overhead costs.)

Year-Over-Year Comparison

Compared to the prior year, Mohawk Industries reported a slight increase in net sales for Q3 2025 (1.4%) but a significant decrease in net earnings (32.8%). For the nine-month period, net sales declined by 1.4%, and net earnings dropped by 22.7%. A notable positive swing in foreign currency translation adjustments ($548.8M vs. -$124.5M) significantly boosted comprehensive income. Debt levels show a reduction in short-term obligations but an increase in long-term debt. Operating expenses, specifically SG&A, have risen, impacting profitability.

Filing Documents

• mhk-20250927.htm (10-Q) — 1447KB
• mhk_2025q3exhibit311.htm (EX-31.1) — 11KB
• mhk_2025q3exhibit312.htm (EX-31.2) — 11KB
• mhk_2025q3exhibit321.htm (EX-32.1) — 5KB
• mhk_2025q3exhibit322.htm (EX-32.2) — 5KB
• mhk_2025q3exhibit951.htm (EX-95.1) — 13KB
• mhk-20250927_g1.jpg (GRAPHIC) — 648KB
• 0000851968-25-000133.txt ( ) — 10526KB
• mhk-20250927.xsd (EX-101.SCH) — 41KB
• mhk-20250927_cal.xml (EX-101.CAL) — 71KB
• mhk-20250927_def.xml (EX-101.DEF) — 178KB
• mhk-20250927_lab.xml (EX-101.LAB) — 548KB
• mhk-20250927_pre.xml (EX-101.PRE) — 390KB
• mhk-20250927_htm.xml (XML) — 2034KB

Forward Looking Statements

Forward Looking Statements 3

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) Condensed Consolidated Statements of Operations for the three and nine months ended September 2 7 , 2025 and September 2 8 , 2024 4 Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 2 7 , 2025 and September 2 8 , 2024 5 Condensed Consolidated Balance Sheets as of September 2 7 , 2025 and December 31, 2024 6 Condensed Consolidated Statements of Cash Flows for the nine months ended September 2 7 , 2025 and Se ptem ber 2 8 , 2024 7 Notes to the Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 33

Controls and Procedures

Item 4. Controls and Procedures 34

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 35

Risk Factors

Item 1A. Risk Factors 35

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 36

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 36

Other Information

Item 5. Other Information 37

Exhibits

Item 6. Exhibits 38 2 Table of Contents

Forward-Looking Statements

Forward-Looking Statements Certain of the statements in this Form 10-Q, particularly those anticipating future performance, business prospects, growth and operating strategies, and similar matters, and those that include the words "could," "should," "believes," "anticipates," "expects" and "estimates" or similar expressions constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For those statements, Mohawk Industries, Inc. (the "Company") claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Management believes that these forward-looking statements are reasonable as and when made; however, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. Important factors that could cause future results to differ from historical experience and our present expectations or projections include, but are not limited to, the following: changes in economic or industry conditions; the impact of tariffs; competition; inflation and deflation in raw material prices, freight and other input costs; inflation and deflation in consumer markets; currency fluctuations; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company's products; impairment charges; identification and consummation of acquisitions on favorable terms, if at all; integration of acquisitions; inter

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended (In millions, except per share data) September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net sales $ 2,757.9 2,719.0 8,085.7 8,199.7 Cost of sales 2,103.0 2,026.4 6,133.2 6,133.8 Gross profit 654.9 692.6 1,952.5 2,065.9 Selling, general and administrative expenses 518.2 480.3 1,531.0 1,493.0 Operating income 136.7 212.3 421.5 572.9 Interest expense 5.0 11.2 16.6 38.6 Other (income) and expense, net ( 0.4 ) ( 0.7 ) 2.2 ( 0.2 ) Earnings before income taxes 132.1 201.8 402.7 534.5 Income tax expense 23.3 39.8 74.8 109.9 Net earnings including noncontrolling interests 108.8 162.0 327.9 424.6 Less: net earnings attributable to noncontrolling interests — — — 0.1 Net earnings attributable to Mohawk Industries, Inc. $ 108.8 162.0 327.9 424.5 Basic earnings per share attributable to Mohawk Industries, Inc. $ 1.75 2.57 5.26 6.69 Weighted-average common shares outstanding—basic 62.0 63.1 62.3 63.5 Diluted earnings per share attributable to Mohawk Industries, Inc. $ 1.75 2.55 5.24 6.66 Weighted-average common shares outstanding—diluted 62.3 63.4 62.6 63.8 See accompanying notes to the Condensed Consolidated Financial Statements. 4 Table of Contents MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended Nine Months Ended (In millions) September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net earnings including noncontrolling interests $ 108.8 162.0 327.9 424.6 Other comprehensive income (loss): Foreign currency translation adjustments ( 32.1 ) 34.4 548.8 ( 124.5 ) Other comprehensive income (loss) ( 32.1 ) 34.4 548.8 ( 124.5 ) Comprehensive income 76.7 196.4 876.7 300.1 Less: comprehensive income attributable to noncontrolling interests (los

View Full Filing

View this 10-Q filing on SEC EDGAR