Key Highlights

  • Net sales were $2.8 billion in the third quarter, up approximately 1% from $2,757.9 million a year earlier.
  • Diluted EPS was $2.72, compared with $1.75 in the prior year quarter, while adjusted EPS was $2.72 versus $2.67.
  • Adjusted EBITDA was approximately $353 million, a Margin of 12.7%.
  • Free Cash Flow reached $390 million in the quarter and $626 million for the nine months, up 78%.
  • The board approved a new share repurchase program of up to $500 million.

Sales edge higher even as soft Demand trims volumes

Mohawk Industries (NYSE:MHK), which describes itself as the world's largest flooring and design surfaces company, reported third quarter 2026 results on October 29, 2026 for the fiscal quarter ended October 3, 2026. Net sales were $2,786.0 million, up approximately 1% from $2,757.9 million, and roughly flat on an adjusted basis. An extra shipping day added about 1% to sales.

Volumes declined approximately 4% on an adjusted basis, which management tied mainly to soft market demand. Price and mix contributed approximately 4% to sales growth, helped by price increases taken in response to rising Inflation along with positive mix.

Earnings climb on lower one-off charges, with adjusted profit nearly level

Net Earnings attributable to the company were $163.1 million, or 5.9% of net sales, against $108.8 million a year earlier. Diluted EPS rose to $2.72 from $1.75, an increase of approximately 55%.

Adjusted EPS was $2.72, up approximately 2% from $2.67. Adjusted Operating Income was $200 million, down approximately $5 million, because lower Volume and higher inflation offset gains elsewhere. Price, mix and productivity of approximately $132 million more than covered underlying inflation of approximately $117 million.

Segment picture shows Flooring North America improving while Flooring Rest of the World volumes slide

Global Ceramic net sales were $1.1 billion, up approximately 2%, with adjusted operating income of $74 million, down $16 million as inflation and lower volume outweighed productivity and price and mix.

Flooring North America sales were $950 million, up approximately 1%, and operating income was $72 million, or 7.6% of net sales, up approximately $18 million. Adjusted operating income rose $9 million to $77 million. Flooring Rest of the World sales were $707 million, down approximately 1%, with adjusted volumes down approximately 10% and price and mix up approximately 7%. Its operating income was $66 million, up approximately $22 million.

Cash generation funds a larger buyback and a new $500 million authorization

Cash from operations was $471 million and capital expenditures were $81 million, producing free cash flow of $390 million. For the nine months, free cash flow was $626 million, up 78% from $351.0 million.

Mohawk repurchased 2.0 million shares in the third quarter, returning $261 million, and returned a further $34 million so far in the fourth quarter, completing the prior $500 million authorization. The board has now approved a new program of up to $500 million, with no time limit.

Net Debt was $965.9 million at October 3, 2026, and net debt to adjusted EBITDA was 0.7x, below the new long-term target of up to 2.0x.

Fourth-quarter guidance of $1.35 to $1.45 sets the next marker

Mohawk also introduced a strategic and capital allocation framework, including baseline capital expenditures of approximately $375 million annually, to be discussed on its October 30, 2026 conference call.

For the fourth quarter, which has four fewer shipping days than a year ago, the company expects adjusted EPS of $1.35 to $1.45 and low single-digit growth in adjusted net sales. Guidance assumes an adjusted tax rate of approximately 23.5%. Readers will likely watch whether pricing keeps offsetting inflation and how quickly the new authorization is used.