We continue to drive cultivation work in our looking at several options, but no change in our capital allocation strategy. With regards to some specific announcements that are out there, particularly in our paint business. Assets of that size, it’s somewhat rare that they come up and it’s safe to conclude that we’re looking at that opportunity. And we’ll see if there is a form of — or any variety of a deal that could add value to us. So too early to talk about it. We’re not going to get into detail here, but the things that we are looking at are consistent with our capital allocation strategy. It’s a strategy that has worked for a period of years for us to generate shareholder value. And we’re going to continue to drive that strategy.
Mike Dahl: Appreciate that. Thanks, Keith.
Operator: Your next question comes from the line of Susan Maklari from Goldman Sachs. Your line is open.
Susan Maklari: Thank you. Good morning. Going back to some of the company-specific initiatives that you’ve got coming through, it seems like you’re really starting to gain momentum with them. Even with the backdrop still being fairly tepid there. Given the progress that you’re seeing, is there any change in the time line or perhaps the sort of progress or the things that we should be thinking about that could come through over the course of this year or next year?
Keith Allman: Hey good morning Susan. No, not really. We’re pleased with the first quarter performance, as I said in my prepared remarks, but it’s on plan. That’s what we anticipated. We’re 1 quarter into the year. We’re one quarter in marching towards our 2026 margin guidance. So, we’re not — we’re not really — no change at this point. Things are going well. We’re executing well. We realize that we’re in a volatile environment and that flexibility and reactivity is important, and we’re continuing to drive that with our leadership team. So, I would say good start to the year, good start marching towards our 2026 targets. No change, and we’re continuing to focus our leadership teams on making sure that we’re very mindful of our growth spend and our SG&A spend to make sure that we’re getting the productivity from those.
We’re driving our pipeline of efficiency improvements through our standardized operating systems that we’ve had for over a decade now. And things are moving along nicely. We’re pleased, but no change in our 2026 outlook or how we feel about the year. We think we’re going to have a year as planned and as we’re guiding.
Susan Maklari: Okay. Okay. That sounds great. And then you also had some really nice improvements on the working capital side. Does that go to some of these efforts that are coming in? And can you just talk about what drove that? And any thoughts on how that could trend over the next couple of quarters?
Rick Westenberg: Hi Sue, it’s Rick. Yes. From a working capital perspective, we continue to be disciplined on working capital. It’s probably well documented. We had a bit elevated of working capital in 2022. We brought that back in line in 2023. And our expectation is that we’ll continue to keep working capital at a normalized or in-line basis as we work through the course of the year. So, there will be seasonality. It’s higher in Q1 just from a seasonality perspective as we and our channel partners prepare for the seasonally stronger Q2 and Q3 selling season. But in terms of working capital, follow more of a traditional seasonality trend. And as we look towards the end of the year, we’re projecting that we would end working capital as a percent of sales around 16.5%, which is relatively in line with where we finished 2023.
Susan Maklari: Okay, all right. Thanks for the color and good luck.
Rick Westenberg: Thank you.
Operator: Your next question comes from the line of Adam Baumgarten from Zelman. Your line is open.
Adam Baumgarten: Hey good morning everyone. Just in Plumbing, how should we think about the magnitude of the price/cost tailwinds on a go-forward basis? Do you think that 1Q was maybe the peak for that relationship? Or do you expect tailwinds throughout the balance of the year?
Rick Westenberg: Yes, Adam, what I would say is, again, we’re pleased with Q1 performance. As it pertains to the rest of the year, I would say, for Plumbing price, we’re expecting a low single-digit tailwind or favorability for the year overall and commodities to be relatively neutral. As Keith mentioned, there’s some — obviously, as we all recognize, variability in the commodity markets and in the freight market. So, that’s a little bit TBD as the year plays out. But at least from a price perspective, low single-digit favorability.
Adam Baumgarten: Okay, got it. And then just on the mix side in Plumbing. Did you see any headwinds in the quarter? And if so, was that really due to International? Or are you seeing some trade down? Maybe just some more color on the mix side of it?
Rick Westenberg: Yeah, it was pretty minimal during the quarter. It was a slight headwind in our International business, just really, as Keith mentioned before, China is still pretty volatile and that tends to be a more profitable market. So if that is down, which it was, it’s geographic mix, but it wasn’t very meaningful for the overall business.
Adam Baumgarten: Okay, great. Thanks.
Operator: Your next question comes from the line of Philip Ng from Jefferies. Your line is open.
Philip Ng: Hi guys. Keith, I appreciate your comments about the consumer and how the year is shaping up largely in line with what you thought coming into the year. But I was just curious, have you seen any noticeable trends in your quarter and going into April? Have your channel partners change any behavior in terms of how they’re managing the inventory? I’m just curious if there’s any inter-quarter improvements or it’s been kind of bouncing along the bottom at this point?
Keith Allman: It’s really as we expected. Don’t comment so much an inter-quarter as there’s obviously a lot of variability with regards to current year end quarter or prior year end quarter, system fill for new product launches and all those sorts of things. But I would say it’s as expected and really no comment beyond that in terms of what’s happening inside the quarter.
