Mohawk's Third-Quarter Sales Growth Cools From Second Quarter

The Tip Desk · October 30, 2026 · 4 min read

Third-quarter net sales were $2.8 billion, up about 1% as reported and nearly flat on an adjusted basis, with adjusted volumes down about 4%.

Mohawk Industries, Inc. (MHK), the world’s largest flooring and design surfaces company, reported third-quarter 2026 net sales of $2.8 billion, up approximately 1% from a year earlier and approximately flat on an adjusted basis. That marked a cooling from the second quarter, when net sales were $3.0 billion, up 6.8% as reported and 5.0% adjusted. An additional shipping day benefited sales by approximately 1%. Adjusted volumes declined approximately 4%, which the company said was primarily due to soft market demand.

Price and mix improved sequentially and contributed approximately 4% to sales growth, the company said, from price increases taken to offset inflation and from positive mix. Net earnings were $163 million, or 5.9% of net sales. Diluted EPS was $2.72, up approximately 55% from a year earlier; adjusted EPS was $2.72, up approximately 2%. Operating income was $188 million, up approximately $51 million from the prior year. Adjusted operating income was $200 million, down approximately $5 million versus the prior year, primarily due to lower volume and higher inflation, the company said.

Price, mix and productivity collectively of approximately $132 million more than offset higher underlying inflation of approximately $117 million. Adjusted EBITDA was approximately $353 million, with an adjusted EBITDA margin of 12.7%.

Global Ceramic net sales were $1.1 billion, up approximately 2% and up approximately 1% on an adjusted basis. Excluding the extra shipping day, volumes were down approximately 1%, and price and mix contributed approximately 2%. Global Ceramic operating income was $66 million, or 5.8% of net sales, down approximately $6 million from the prior year. Adjusted operating income was $74 million, down $16 million versus the prior year, as higher underlying inflation and lower volumes were partially offset by productivity and price and mix.

Flooring North America net sales were $950 million, up approximately 1% and approximately flat on an adjusted basis. Excluding the extra shipping day, volumes declined approximately 3% and price and mix contributed approximately 3%. Flooring North America operating income was $72 million, or 7.6% of net sales, up approximately $18 million from the prior year. Adjusted operating income was $77 million, up $9 million.

Flooring Rest of the World net sales were $707 million, down approximately 1% as reported. Adjusted net sales declined approximately 2%, with volumes down approximately 10%, primarily due to soft market demand across categories. Price and mix was up approximately 7%, a sequential improvement from price increases implemented earlier in the year. Flooring Rest of the World operating income was $66 million, or 9.3% of net sales, up approximately $22 million from the prior year. Adjusted operating income was $66 million, up $6 million.

Cash from operations was $471 million and free cash flow was $390 million for the three months ended October 3, 2026. For the nine months ended October 3, 2026, free cash flow was $626 million, up 78%. The company now anticipates full-year capital expenditures of approximately $445 million versus its previous expectation of $460 million. Net debt to adjusted EBITDA ended the quarter at 0.7x.

During the third quarter, Mohawk repurchased 2.0 million shares, returning $261 million of cash and reducing outstanding shares by more than 3%. To date in the fourth quarter it returned an additional $34 million, bringing the reduction to approximately 4% during the second half of the year and completing the previous share repurchase authorization. The Board authorized a new share repurchase program of up to $500 million. Under the prior $500 million authorization, approved in July 2025, the company repurchased approximately 7% of shares outstanding at an average price of approximately $119 per share.

For the fourth quarter of 2026, the company expects adjusted EPS in the range of $1.35 to $1.45. It assumes flooring market conditions will be softer relative to the third quarter and expects low single-digit growth in adjusted net sales versus the prior year, with four fewer shipping days versus the prior year and three fewer versus the third quarter of the current year. Management anticipates that the underlying cost of sales inflation headwind on a year-over-year basis will be similar to the third quarter and expects to fully offset this through pricing, mix and productivity, and expects a similar dynamic in the first quarter of 2027.