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Sep 28, 2025
MasterBrand Q3 2025 Earnings Report
MasterBrand reported its third quarter 2025 financial results, showing a decrease in net sales and profitability amidst a soft demand environment, while continuing strategic initiatives and merger plans.
Key Takeaways
MasterBrand experienced a challenging third quarter in 2025, with net sales decreasing by 2.7% to $698.9 million and net income falling to $18.1 million from $29.1 million in the prior year. The company's profitability margins, including net income margin and adjusted EBITDA margin, also saw declines due to lower volume, unfavorable fixed cost leverage, and tariffs. Despite these headwinds, MasterBrand maintained disciplined execution of strategic initiatives and updated its full-year 2025 financial outlook.
Net sales for Q3 2025 decreased by 2.7% year-over-year to $698.9 million, primarily due to a mid- to high single-digit market decline.
Net income for the quarter was $18.1 million, a significant decrease from $29.1 million in the third quarter of 2024, with net income margin falling to 2.6%.
Adjusted EBITDA margin decreased by 160 basis points year-over-year to 13.0%, impacted by lower volume and tariffs.
Diluted EPS was $0.14, down from $0.22 in the prior year, while adjusted diluted EPS was $0.33, compared to $0.40 in Q3 2024.
Forward Guidance
For the full year 2025, MasterBrand expects net sales to be approximately flat year-over-year, with organic net sales decreasing mid-single digits and acquisition-related net sales increasing mid-single digits. Adjusted EBITDA is projected to be in the range of $315 million to $335 million, with an adjusted EBITDA margin of roughly 11.5% to 12.0%. Adjusted diluted EPS is expected to be between $1.01 and $1.13. The guidance accounts for recently enacted Section 232 lumber tariffs.
Positive Outlook
- Expects organic net sales to outperform the underlying market due to new products, channel-specific offerings, and price actions.
- Actively executing a comprehensive mitigation strategy for tariffs, including targeted pricing adjustments and supplier renegotiations.
- Exploring alternative sourcing and optimizing or relocating manufacturing operations to offset tariff exposure.
- Integration of Supreme Cabinetry Brands is progressing as expected, positioning the business for stronger margins.
- Planning for the potential merger with American Woodmark is underway, aiming to capture synergies and drive long-term value creation.
Challenges Ahead
- Net sales year-over-year are expected to be approximately flat, indicating limited growth.
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