TAYLOR, MI — Masco Corp. (NYSE: MAS) says reduced cabinetry sales to its retail channel resulted in its cabinet segment staying relatively flat in the quarter, with net sales at $237 million, up just $1 million from a year ago. The company reported Cabinets and Related Products’ sales to dealers and builders increased by a mid-single-digit percentage.
However, Masco's cabinets segment showed an operating loss of $12 million from the closing write downs on the Jackson, OH, plant, and the standardization of ERP systems at its plants. Overall, operating margins improved slightly to 8%.
Masco Corp. overall posted net sales of $2 billion for the first quarter of 2014, up 5% over 2013. The cabinet and building products giant attributed poor weather conditions and a still recovering housing market for slower than expected sales in North America, which overall grew 3 percent, compared to 12 percent for international.
“New home construction will show continued growth in 2014, repair and remodel activity will grow modestly, and big ticket items will continue to show improvement,” said Masco President and CEO Keith Allman. “Furthermore, we expect the positive trend of the European economic recovery to continue."
"Our recent customer focused product launches and disciplined pricing will add value over the long term," Allman said in a conference call. "The stabilization of this business will not happen overnight."
The company reported net sales for Installation and Other Services grew 7%, driven by growth in new home construction, commercial, and distribution channels. "Our installation and cabinetry business remained a major focus for us," Allman said.
Net sales for windows and Other Specialty Products jumped 13%, led by strong North American and UK sales. New products and programs spurred Masco's Decorative Architectural Products' segment to a 2% increase, reaching $441 million for the quarter.
It was the company's 10th consecutive quarter of year-over-year sales and profit growth, said John Sznewajs, Masco vice president, treasurer and CFO.
"For 2014 we expect to generate approximately $150 million of profit improvements growth, similar to what we have observed on average for the last five years, largely coming from continuous improvements in supply chain work," said Sznewajs in the conference call.
Masco's product segments include: Cabinets & Related Products; Plumbing Products; Installation & Other Services; Decorative Architectural Products and Other Specialty Products.
Kitchen and bath cabinetry brands include: Merillat, KraftMaid Cabinetry, QualityCabinets, Moores and DeNova countertops. Well-known brands in the other segments include: Liberty Hardware, BEHR paint, Delta faucets, Arrow fastening tools and Milgard Windows & Doors.