Mohawk Industries, Inc. (NYSE:MHK) Q3 2023 Earnings Call Transcript

Rafe Jadrosich: Is there — if — it seems like based on what kind of homebuilders are saying now that we will still see single-family construction probably rise next year. But it looks like the multifamily outlook is pretty soft and we could see some pretty significant declines. Do you have meaningful exposure on the multifamily side? I mean, is there any margin difference between single-family, multifamily or is it relatively small compared to single-family?

Jeff Lorberbaum: Multifamily typically is lower. They typically use lower quality products than the single-family home construction. On the other hand, the multifamily gets replaced much more frequently, typically after they change over tenants in it. It depends on where they are and what it could be replaced every few years where the home newbuilding could be a seven-year to 10-year cycle. So there’s a big difference in replacement cycles, as well as the quality of products going into each.

James Brunk: As we said earlier, we see an expanding presence in U.S. Ceramic and new construction, and the commercial channels, and also in Flooring North America as well, our relationship with the builders is stronger.

Jeff Lorberbaum: The other thing you mentioned the multifamily, the new starts are coming but the typical multifamily takes minimum of a year and a half and could be two and a half years to finish. There is a huge number of projects that are coming through that haven’t been finished yet and our product category is last one to go in.

James Brunk: Yeah. So similar to commercial, it has a long tail to be completed.

Rafe Jadrosich: Okay. Got it. So there’s still a backlog there.

Jeff Lorberbaum: Yeah.

Rafe Jadrosich: That’s very helpful. Thank you.

James Brunk: Yes. Correct. Thank you.

Operator: And ladies and gentlemen, at this time we will be concluding today’s question-and-answer session. I’d like to turn the floor back over to Mr. Lorberbaum for closing remarks.

Jeff Lorberbaum: Yeah. We are managing the controllable costs that we have been discussing, we continue to react to changing market conditions which are volatile, we see significant upside when the market returns and we think we are well positioning ourselves for that to occur. We appreciate you joining us. Have a great day.

Operator: And ladies and gentlemen, with that we will conclude today’s conference call. We thank you for attending today’s presentation. You may now disconnect your lines.