Masco Corp (NYSE:MAS) Q3 2019 Earnings Conference Call - Final Transcript
Oct 30, 2019 • 08:00 am ET
Thank you. [Operator Instructions] Our first question comes from the line of Stephen Kim with Evercore. Your line is open.
Thanks very much guys. Congratulations on a good quarter. Wanted to ask if I could about your Plumbing business, in particular, the international business, which it seems like it performed well, you attributed that to Germany, China and France. Last quarter I think you called out some weakness in LatAm, Italy and Turkey.
What I'm trying to understand is, you attributed a lot of the strength to introducing new products into the market. And I was wondering if you could help us understand how much of the strength we saw there in the Plumbing International was due to like a load-in kind of a process. How much of it you see as underlying growth which can continue and whether the markets you called out last quarter, which were soft, have improved or if Germany, China and France is simply offset that through the new products?
I'll take that one, Stephen. Good morning. The overall growth was more from the good sell-through of those products than it was load-in. There was always a little bit of load-in in the channel, but fundamentally, those products are taking off well and they are well received. With regards to Latin America and Italy and Turkey, haven't seen anything that's remarkable with regards to how those are performing. In other words, really not much of a change there from how they've performed. It's really been a case of solid performance and good traction with our new products as we look across Central Europe and China.
Our brands, the Hansgrohe and the high-end Axor brand is very well regarded in that space when you look at both through distribution and particularly when you look at the international projects, hotels, crew ships, and the like. So we have strong brands, and the new products are doing well, more of sales -- more from the sales of those products and in some of the challenge markets they kind of remain stable where they were when we talked last quarter.
Yes. Stephen, the one thing I would probably add to Keith's comments would be that if you look at our performance in the third quarter of 2018, I think we're up against a relatively easy comp here in the third quarter of 2019. So I think that also aided the top line growth that you saw.
Okay, got it. That's helpful. Thank you, guys. Second question relates to the cabinet business which put up a very strong margin in this quarter, stronger than we were expecting. I know you took your guide up for the year. I was curious as to, as we think about the fourth quarter though, it seems based on our numbers that we're looking for a pretty notice -- or you're looking for a pretty noticeable decline in momentum in the margin there. And so I was just curious if you could comment on, if there