Earnings

MasterBrand's Legacy Sales Decline Narrows After Woodmark Close

The Tip Desk · November 11, 2026 · 5 min read

Combined net sales were $1,036.8 million in the third quarter, including $355.7 million from American Woodmark, as the company posted a $9.2 million net loss.

MasterBrand, Inc. (MBC), the largest residential cabinet manufacturer in North America, reported combined net sales of $1,036.8 million for the third quarter of 2026, including a $355.7 million contribution from American Woodmark, after the all-stock merger closed on May 28.

That was the first full quarter as a combined company. Prior-year results reflect legacy MasterBrand only. American Woodmark had contributed $125.5 million in the second quarter, when combined sales were $815.2 million.

Legacy MasterBrand net sales were $681.1 million, down 2.5% from the third quarter of 2025, after a 5.6% year-over-year decline in the second quarter and a 6.4% decline in the first quarter. The company said the latest drop reflected a mid- to high-single-digit market decline, unfavorable mix and trade-downs, partially offset by share gains across end markets and favorable net average selling price from the flow-through of tariff pricing.

Gross profit was $254.9 million and gross profit margin was 24.6%, compared with $218.2 million and 31.2% in the third quarter of 2025. MasterBrand said the increase in gross profit primarily reflected American Woodmark, $10.9 million of IEEPA duty refunds and integration synergies. The 660-basis-point margin decline, it said, was driven by lower volume and related unfavorable fixed-cost leverage, inflation that outpaced pricing actions, unfavorable product mix and trade-downs, and the inclusion of American Woodmark’s lower gross margin.

Net loss was $(9.2) million, or a (0.9)% net loss margin, versus net income of $18.1 million and a 2.6% net income margin a year earlier. The company attributed the swing to the factors impacting gross profit, higher interest expense and the inclusion of American Woodmark SG&A, partially offset by lower merger-related costs, cost actions taken in the first half and integration synergies.

Adjusted EBITDA was $86.0 million and adjusted EBITDA margin was 8.3%, compared with $90.6 million and 13.0% in the third quarter of 2025. The 470-basis-point margin decline, MasterBrand said, reflected lower volume, unfavorable fixed-cost leverage, inflation that outpaced pricing and unfavorable mix, partially offset by American Woodmark, the IEEPA duty refunds, continuous improvement, previously announced cost actions and integration synergies.

Diluted loss per share was $(0.05) on 203.5 million weighted average shares, versus diluted earnings of $0.14 on 129.5 million shares a year earlier. Adjusted diluted earnings per share were $0.10, compared with $0.33.

Integration of American Woodmark was described as ahead of schedule, with approximately $11 million of cost synergies realized as of September 27, 2026. The second-quarter release had said the company had raised its long-term annual run-rate cost synergy target to over $100 million. As of quarter-end, MasterBrand said it has initiated or completed actions expected to drive more than $50 million in run-rate cost synergies exiting year one following close, and it continues to expect over $100 million in annual run-rate cost synergies by the end of year three post-close.

Restructuring charges were $11.1 million in the thirteen weeks ended September 27, 2026, including $10.9 million related to American Woodmark integration, versus $2.6 million in the year-ago thirteen weeks. Acquisition-related costs were $4.4 million, compared with $15.2 million, and non-cash purchase accounting adjustments of $6.6 million appeared after the close.

As of September 27, 2026, cash was $139.7 million and revolving availability was $554.5 million. Total debt was $1,230.8 million, net debt was $1,091.1 million, and the ratio of net debt to trailing twelve-month adjusted EBITDA, inclusive of American Woodmark’s trailing twelve-month adjusted EBITDA, was 4.3x. The company said it remained in full compliance with all applicable financial covenants. No share repurchases were made in the third quarter as the company prioritizes integration investments and balance sheet management.

For the thirty-nine weeks ended September 27, 2026, net cash provided by operating activities was $80.2 million, compared with $108.8 million for the thirty-nine weeks ended September 28, 2025. Free cash flow was $43.6 million, versus $65.0 million, which the company said was driven by lower earnings and merger-related costs, partially offset by disciplined working capital management.

For the fourth quarter of 2026, MasterBrand expects net sales of $958 million to $988 million, adjusted EBITDA of $38 million to $48 million, or a 4.0% to 4.9% margin, and adjusted diluted loss per share of $(0.12) to $(0.08), reflecting interest expense of approximately $24 million from the $375 million Term Loan A used to retire American Woodmark’s debt at close. The outlook supersedes the second-half 2026 outlook previously provided.

For full-year 2026, the company now expects its addressable market to be down high-single digits and assumes no improvement in demand through year-end. It expects gross tariff costs of approximately 5-6% of full-year 2026 net sales, expected to be fully offset on a dollar-for-dollar run-rate basis by end of year, and free cash flow of approximately breakeven. MasterBrand now expects second-half 2026 cost synergies to exceed its previously communicated target of approximately $15 million.

More on MBC

September 28, 2026 QBook Stronger demand supports expansion as pricing diverges

MasterBrand, Inc. — all coverage and financials