Flooring manufacturer Mohawk Industries (NYSE: MHK) reported revenue ahead of Wall Street’s expectations in Q3 CY2025, with sales up 1.4% year on year to $2.76 billion. Its non-GAAP profit of $2.67 per share was 1.2% above analysts’ consensus estimates.
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Mohawk Industries (MHK) Q3 CY2025 Highlights:
- Revenue: $2.76 billion vs analyst estimates of $2.71 billion (1.4% year-on-year growth, 1.6% beat)
- Adjusted EPS: $2.67 vs analyst estimates of $2.64 (1.2% beat)
- Adjusted EBITDA: $359.4 million vs analyst estimates of $363 million (13% margin, 1% miss)
- Adjusted EPS guidance for Q4 CY2025 is $1.95 at the midpoint, below analyst estimates of $2.13
- Operating Margin: 5%, down from 7.8% in the same quarter last year
- Free Cash Flow Margin: 11.3%, up from 7.5% in the same quarter last year
- Market Capitalization: $7.97 billion
Commenting on the Company’s third quarter, Chairman and CEO Jeff Lorberbaum stated, “Our net sales in the quarter were in line with our expectations, slightly ahead of prior year as reported. Though economic conditions across our regions weakened more than anticipated compared to the prior quarter, we believe we outperformed our markets. Our sales and product mix continued to benefit from the success of our premium residential and commercial offering and collections introduced during the past two years. Our results reflected benefits from ongoing productivity and restructuring initiatives as well as the impact of favorable currency exchange and lower interest expense, offset by higher input costs and temporary plant shutdowns. Across our markets, material and energy expenses are now improving from peak levels, though higher costs from earlier in the year will continue to impact our fourth quarter earnings.
Company Overview
Established in 1878, Mohawk Industries (NYSE: MHK) is a leading producer of floor-covering products for both residential and commercial applications.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Mohawk Industries’s sales grew at a weak 2.8% compounded annual growth rate over the last five years. This fell short of our benchmarks and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Mohawk Industries’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2% annually. 
This quarter, Mohawk Industries reported modest year-on-year revenue growth of 1.4% but beat Wall Street’s estimates by 1.6%.
Looking ahead, sell-side analysts expect revenue to grow 1.6% over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below the sector average.
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Operating Margin
Mohawk Industries’s operating margin has been trending down over the last 12 months and averaged 6% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
In Q3, Mohawk Industries generated an operating margin profit margin of 5%, down 2.9 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Mohawk Industries’s unimpressive 3.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q3, Mohawk Industries reported adjusted EPS of $2.67, down from $2.90 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 1.2%. Over the next 12 months, Wall Street expects Mohawk Industries’s full-year EPS of $8.91 to grow 14.9%.
Key Takeaways from Mohawk Industries’s Q3 Results
It was encouraging to see Mohawk Industries beat analysts’ revenue expectations this quarter. On the other hand, its EPS guidance for next quarter missed. Overall, this was a softer quarter. The stock traded down 3% to $124.98 immediately after reporting.
Big picture, is Mohawk Industries a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
