Good morning, ladies and gentlemen. Welcome to Masco Corporation's Q3 2023 Conference Call. My name is Jerry, and I will be your operator for today's call. As a reminder, today's Conference Call is being recorded for replay purposes. To ask a question, please press star and then the number one on your telephone keypad. To withdraw your question, please press the pound key. I will now turn the call over to Renee Benedict, Director of FP&A and Investor Relations. You may begin. Thank you, Jerry, and good morning. Welcome to Masco Corporation's 2023 Q3 Conference Call. With me today are Keith Allman, President and CEO of Masco, and David Chaika, Masco's Vice President, Treasurer, and Investor Relations. Our Q3 earnings release and the presentation slides are available on our website under Investor Relations. Following our remarks, we will open the call for analyst questions. Please limit yourself to one question with one follow-up. If we can't take your question now, please call me directly at 313-792-5500. Our statements today will include our views about our future performance, which constitute forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. We've described these risks and uncertainties in our risk factors and other disclosures in our Form 10-K and our Form 10-Q that we filed with the Securities and Exchange Commission. Our statements will also include non-GAAP financial metrics. Our references to operating profit and earnings per share will be as adjusted unless otherwise noted. We reconcile these adjusted metrics to GAAP in our earnings release and presentation slides, which are available on our website under Investor Relations. With that, I'll now turn the call over to Keith. Thank you, Renee. Good morning, everyone, and thank you for joining us this morning. Before we get into our results, I want to take this opportunity to welcome Masco's new CFO, Rick Westenberg, who joined the team on October sixteenth. Rick is an accomplished executive with more than 25 years of experience, including nearly 15 years leading global finance organizations. We're excited to have Rick on board and look forward to him participating in our Q4 earnings call in February. I would like also to take this time to thank Dave Chaika for serving as interim CFO over the last several months. Dave quickly stepped into the position and successfully led our finance team during this transition, and we greatly appreciate his support. With that, let's turn to our Q3 results. Please go to slide five. In Q3, we demonstrated our ability to execute and the earnings power of our business model, despite a challenging environment which saw a top-line decrease of 10%. Volume was down 12%, partially offset by pricing actions and favorable currency impacts of 1% each. While sales were down $225 million, our continued focus on driving cost savings initiatives and a favorable price-cost relationship resulted in an operating profit decline of only $2 million in the quarter. This strong execution resulted in operating profit margin expansion of 170 basis points to 17.6% and a decremental margin of only 1%. Our earnings per share for the quarter grew 1% to $1 per share. Turning to our segments, plumbing sales declined 11% in local currency, with North American and international plumbing each declining 11%. In North American plumbing, overall demand remained soft, with the wholesale and e-commerce channels performing moderately stronger than the retail channel. In international plumbing, demand trends weakened in our key markets of Europe and China, in line with our expectations. We continue to expect our overall international plumbing market to be down high single digits for the full year. Despite the top-line decline, we successfully drove plumbing margin expansion of 230 basis points to 18.9% in Q3. This strong margin performance was driven by pricing actions, commodity and freight deflation, and significant cost savings initiatives, particularly in our North American plumbing business. We also completed the strategic bolt-on acquisition of Sauna360, a leader in the sauna, steam, and infrared wellness industry. This acquisition complements our spa business, expands our wellness product offerings, and leverages Watkins' expansive dealer network. Turning to our decorative architectural segment, sales declined 10% in the quarter. DIY paint sales declined low double digits. Pro paint sales declined low single digits against a mid-teens comp in Q3 of 2022. On a 3-year stacked basis, our Pro paint comp is over 65%... demonstrating the significant market share we have captured with Pro Painters through the strength of the Behr brand, quality of our products, and our commitment to exceptional service. Together with our partner, The Home Depot, we believe we have a significant opportunity to continue to grow share in the Pro Paint market. Additionally, we are honored that Behr was recognized as The Home Depot 2023 Marketing Innovation Partner of the Year. This recognition is a testament to our creative marketing campaigns and our 45-year partnership with The Home Depot. Turning to capital allocation, we continued to generate significant free cash flow during the quarter and maintained a strong balance sheet. As a result, we executed on our balanced capital deployment strategy and returned $109 million to shareholders through dividends and share repurchases, including buying back 800,000 shares for $45 million in the quarter. Now turning to our outlook for the remainder of 2023. With our strong execution, we now anticipate earnings per share for 2023 to be in the range of two dollars - excuse me, $3.65-$3.75 per share, up from our previous guidance of $3.50-$3.65. While the near-term demand for the repair and remodel market remains uncertain, we will stay focused on controlling what we can by closely managing costs, minimizing the impact of lower volumes, and driving our margins back to at least 2019 levels of 18% in each segment. We believe our portfolio of low-ticket repair and remodel products, our market-leading brands and innovation, and our geographic diversification positions us for growth and stability through cycles. As we look over the longer term, we believe the fundamentals of our repair and remodel markets are strong and supportive of long-term growth. These include high home equity levels, the age of housing stock, and homeowners staying in their homes longer. We remain committed to investing in our brands, capabilities, and people to drive strong growth when market conditions improve. With favorable fundamentals and the continued successful execution of our growth strategy, along with our free cash flow and disciplined capital deployment, we are well positioned to drive value creation for the long term. On our Q4 call, we will provide our 2024 outlook, as well as an updated view on the margin expansion potential of our business over the longer term. I'd like to conclude with a thank you to our employees for their hard work and dedication to driving operational excellence and delivering for our customers and shareholders. Now, I'll turn the call over to Dave to go over our Q3 results and 2023 outlook in more detail. Dave? Thank you, Keith, and good morning, everyone. As Renee mentioned, my comments, excuse me. My comments today will focus on adjusted performance, excluding the impact of rationalization and other one-time items. Turning to slide seven. Sales in the quarter decreased 10%, and excluding currency, decreased 11%. North American and international sales both decreased 11% in local currency. Our continued focus on operational efficiency helped drive gross margin expansion of 430 basis points to 35.8%. Our SG&A as a percent of sales was 18.2%. Despite our decline in sales, operating profit in Q3 was $348 million, down only slightly year-over-year. Operating margin expanded 170 basis points to 17.6%. This strong operating profit and margin performance was due to pricing actions, lower freight and commodity costs, and cost-saving initiatives, offset by lower volumes, resulting in EPS growth of 1% to $1 per share. Lastly, in Q3, we received an insurance settlement in our Decorative Architectural Products segment related to the severe weather event that occurred in Texas in 2021. This weather event significantly impacted our supplier's ability to produce the raw materials necessary for us to manufacture certain paints and other coating products. This settlement has been excluded from our results as a non-GAAP adjustment. Turning to slide eight. Plumbing sales in the quarter decreased 10%, and excluding currency, decreased 11%. Lower volume decreased sales by 14%, partially offset by net selling prices, which increased sales by 3%. North American plumbing sales decreased 11% in local currency. International plumbing sales decreased 11% in local currency as demand continued to soften in many European markets and China. Segment operating profit in Q3 was $225 million, up $5 million year-over-year, and operating margin expanded 230 basis points to 18.9%. Operating profit improvement was driven by pricing actions, lower freight and commodity costs, and cost-saving initiatives, partially offset by lower volumes. The completion of our Sauna360 acquisition had minimal impact on our results due to closing late in Q3. Turning to slide nine. Decorative architectural sales decreased 10% for Q3. Paint sales declined high single digits, with Pro paint sales decreasing low single digits against the mid-teens comp in Q3 of 2022. With a two-year Pro sales comp in the mid-teens and a three year P ro sales comp of over 65%, we are clearly demonstrating the significant share we have gained and retained over the past three years. Operating profit was $144 million, and operating margin expanded 110 basis points to 18.3%. Operating profit was impacted by lower volumes, partially offset by cost-saving initiatives. We are also starting to see relief in certain paint input costs, with modest low single-digit deflation in Q3, and we expect modest low single-digit deflation in Q4 on these raw materials. For the full year, we continue to anticipate low single-digit inflation for our paint raw material basket, with second half deflation not fully offsetting first half inflation. Turning to slide 10, our balance sheet remains strong, with net debt to EBITDA at 1.7 times at quarter end and approximately $1.6 billion of balance sheet liquidity. Working capital as a percent of sales improved 40 basis points to 18.1%, and net working capital days improved by 12 days, primarily due to lower inventories. With this improvement in working capital, net cash from operating activities year to date was $928 million, an improvement of $408 million compared to prior year. We expect free cash flow conversion to be approximately 110% for the full year. During Q3, we repurchased approximately 800,000 shares for $45 million. Share repurchases were lower in the quarter as a result of us completing the acquisition of Sauna360. We continue to execute on our disciplined capital allocation strategy and anticipate deploying approximately $500 million to share repurchases and acquisitions for the full year. With the acquisition of Sauna360 for approximately EUR 124 million and year-to-date share repurchases of approximately $125 million, we expect to deploy up to $225 million for share repurchases in Q4, subject to market conditions. This will bring our full-year share repurchases to approximately $350 million. Now, let's turn to slide 11 for our updated outlook for the year. For Masco overall, our top line is developing largely as expected, and we continue to expect sales to decline in the range of 10%. However, with our strong execution year to date and margin performance, we now expect full year margins to be approximately 16.5%, increase from our previous guide of approximately 16%. In our plumbing segment, we expect 2023 sales to be down in the range of 9%-10%, improved from our previous expectation of down 10%-12%. We also anticipate the full-year plumbing margins to improve and be approximately 17.5%, increase from our previous guide of approximately 17%. In our decorative architectural segment, we continue to expect sales to be down in the range of 8%-10%. However, we do expect our decorative margins to improve and be approximately 17.5%, increase from our previous guidance of approximately 17% due to cost-saving initiatives. Finally, as Keith mentioned earlier, thanks to our strong execution, our 2023 EPS estimate is now $3.65-$3.75, up from our previous guide of $3.50-$3.65. This assumes a 24% effective tax rate and a 227 million average diluted share count for the year, which is slightly higher than the 226 million share count we guided to last quarter. Additional modeling assumptions for 2023 can be found on slide 14 of our earnings deck. With that, I'd like to open the call for questions. Operator? Thank you. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question and one follow-up question during the Q&A session. To ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star, then the number two. Our first question comes from the line of Michael Rehaut of JP Morgan. Please go ahead. Thanks. Good morning, everyone. Good morning, Mike. Good morning, Mike. Wanted to start with the increased guidance, and, you know, driven by the higher margin outlook. And really zero in a little bit on, you know, kind of the drivers of each, and specifically trying to think about, you know, you know, cost-saving initiatives as well as raw material trends and, you know, how we should think about any of these benefits as perhaps they've begun to accrue as you move throughout 2023. And if there's any way to think about carryover benefits on either the cost saves or the raw materials trends as we look into 2024? ... So we clearly have, Mike, margin momentum going into 2024, and that will, that will continue. The main drivers of our margin are variable cost productivity, a little bit on the fixed cost side. We've talked about a small plumbing plant that we've closed. But really it's about continuous improvement in that culture of execution that we've demonstrated in the past and continuing to do that. So we've got good productivity initiatives that we're driving. We've had some pull-through of now full year benefit of price increases that we've executed mid-year last year, that's now affecting us full year this year, and we're getting full benefit of that, by and large here in Q3. And we expect that to continue. Of course, if commodities stay where they are or maybe even change to the lower side going into 2024, that would be a benefit for us as well, leading into 2024. So I think the margin story for us, in summary, is that we've got good momentum here coming through in this quarter, and there will be some benefits for us as we look into 2024. Okay. Appreciate it. You know, I guess secondly, you know, we had a competitor last night talk about in early thoughts around 2024 and kind of shared, you know, expectations for the market to be down slightly based on current trends. I was wondering if that's something that, you know, at this point, again, given how you've seen the trajectory play out so far in 2023, and given still, you know, kind of depressed existing home sale turnover, if that's kind of matches directionally, at least, the way you're thinking about things at this point and how you'd overall kind of characterize, you know, the demand backdrop. I know, as you've kind of noted, 2023 has played out as you largely expected. But, you know, clearly some of the headwinds appear to be, you know, at least in place as we're entering 2024 at this point. Yeah, Mike, as I said, we'll be providing a lot more detailed view on 2024 on our Q4 call in February. In terms of sharing some of our initial thoughts and perspective on what '2024 looks like as we sit here today, I would say that our assessment of the market based on what we're seeing now in terms of our order patterns and our view agrees with most industry experts and economists, I'd say, in that it looks to us like '2024 is gonna be flattish, a flattish year for R&R. You know, we have rates being stubborn and holding up. Consumers are still getting a little pinched by that. Existing home sales are at what I think is about a 20-year low. So I would say, generally speaking, for our view of 2024 in R&R is that it's gonna be flattish. And in that flattish environment, we fully expect to outperform the market and grow and expand margins. We have leading brands around the globe with Delta and Hansgrohe. We have demonstrated and have strong share gain momentum, with our innovation pipeline, our new products, and our leading channel positions, particularly in wholesale and our premium position in China, which is holding up better than some of the lower priced segments in China. So we've demonstrated our ability to grow and retain share in Pro paint. That will continue because we're focused on that, and you see that we are continuing to invest behind that initiative. So I think that top line story, together with our demonstrated margin momentum, you know, we're focused on margin execution. And with our strong drop down in incremental volume, market outperformance in a flattish environment will drive margin enhancement. Of course, we're continuing to lean out our operations and keep a keen focus on total cost productivity, which is the hallmark of our execution culture. So in 2024, I think we're, as we sit here today, in agreement with the general assessment of a flattish market, and we intend to outperform in that market. I think importantly, longer term, we believe that there's a significant rebound in R&R spending when things normalize due to the strong fundamentals. We've talked about these, the age of housing stock, strong home prices, strong equity levels, and what we believe to be pent-up demand for R&R spending. So, it's a volatile time, and I think based on our demonstrated execution, we're ready to go into 2024 and feel good about it. And we're gonna continue to invest in our brands, service, innovation, to drive above market growth, and win in the recovery. Great. Appreciate the answer and the thoughts, Keith. Thanks very much. Our next question comes from the line of Joe Ahlersmeyer of Deutsche Bank. Please go ahead. Hey, everybody. Good morning, and thanks for taking the question. Yeah, morning, Joe. I was wondering, I know you don't disclose price for your decor arch segment, but I was wondering if you could give at least directionally, if price added to the top line in the quarter and margin in the quarter. It didn't look like this may have been Q1 where you didn't call it out. Yeah, Joe, we're not gonna get into specific discussion on price. So price overall for Masco was around 1%, a little more in plumbing, roughly flattish in decorative. As we've talked about many times, we tend to be price- cost neutral in decorative over time, and we have seen some sustained raw material deflation. You know, likely, you know, price could be a little bit of a headwind here in Q4, but maintain profit dollars. Right. That makes sense. And so as a follow-up, as you're talking about getting back to 18%, that includes, I suppose, the deflation plus, giving back the price, because that's the mechanical margin benefit on the way down, right? I think when we talk about getting back to the 2019 margin levels of 18%, it's more about driving cost savings initiatives, more about driving growth. If there is deflation and the inverse relationship to, if you do end up giving back price, that could help, but I think we really, we're focused on improving margins from a cost productivity and driving growth side of things. Understood. All right. Thanks a lot. Our next question comes from the line of Sam Reid of Wells Fargo. Please go ahead. Awesome. Thanks so much, guys, for taking my questions here. Wanted to maybe dig in a little bit on Pro paint. It's been a great growth engine for you guys. Understanding there's been a little bit of give back this year. Can you give us an update, though, on what the next leg of growth is from here, and maybe touch on some of your initiatives, specifically, I'm thinking job site delivery and maybe where you are in terms of building out your Pro paint sales force? Yep. Thanks for the question, Sam. Pro paint's been a great story for us and a lot of hard work and focus for really a decade now. It was it wasn't too long ago when this was just a small piece of our business, and we've grown it now to be quite material. And the story has really been around staying focused on that segment of the market that we think we have a value proposition that really works. And it's that contractor who also paints and does other things and is already in the aisle shopping at The Home Depot. And when you couple that with the quality of our paint and our brands and our innovation that we put in the can, it's and our cost competitiveness, it's a very strong story for that contractor. We think that's about half the Pro paint business, and in total, when we look at where we are today in terms of our of our overall volume, I think the important story to start with is we are just getting started. We have a relatively small share of that focused part of the market that we're going for, so there's some nice white space to go after. The success that we've had today, and the success that continues to resonate with the Pro painter based on today's net promoter scores that we look at very closely. So we're, we're holding onto the share because it's a, it's not a one-time benefit. It's a benefit that has value to these focused contractors that continues, and it's about service. It's about reducing the friction and, and making it an easy process and an easy experience for the Pro painter to go through. So we are. There, there's no big silver bullet that we're looking to spend a, a significant amount of money and that we think is going to, or hope is going to drive the benefit. It's doing more of the same and staying focused on service. So yes, that includes buying online and picking up in the store, ordering. It includes expanding our delivery options, which of course, includes job site delivery. We still have significant room to expand our Pro sales, outside sales force, both at Behr and at Home Depot. We continue to enhance our loyalty programs. The list goes on. So it's fundamentally about the blocking and tackling and delivering a service proposition to a targeted contractor prop really rings. In terms of where we are in the build-out, it's early innings. I mean, when you look at the share that we have today and the share potential that we think we have, we're just getting rolling. No, that's helpful. And maybe one more on paint. Touching more on backlogs here. So just, do you have a sense as to where those backlogs sit for your Pro paint customers? And then maybe, another one just on project sizes. Are you finding that project sizes maybe are mixing a little bit smaller, but that's still keeping Pros relatively busy? Thanks. Hey, Sam, on the backlog, we'd say that the Pro painters in general have worked through really significant backlogs over the past couple of years. It's probably more at a normalized level. Still decent demand, but at a much more normalized backlog level. In terms of project size, that's a difficult stat to get a handle on. Anecdotally, maybe a little bit, but you really can't, don't have hard data to back that up at this point. Probably a little early for that. Haven't really seen a significant change in our ticket size. Gotcha. No, that's helpful. Thanks so much, guys. I'll pass it on. Our next question comes from the line of Matthew Bouley of Barclays. Please go ahead. Good morning, guys. Thanks for taking the questions. Just one on the international market. It sounds like you kept guidance unchanged. You know, but there was some weakening in those markets, and I guess if I heard you correctly, that was already in line with your expectations. My question is, do you think those international markets have found a trough here, or would there be risk to those markets weakening a bit further? And, you know, since you gave some color on R&R into 2024, I'm just curious if you have any thoughts on how those international markets may play out into early next year. Thank you. Yeah, Matt, it's always, always tough to tell if you're, if you're on the bottom or you're coming up, or, you know, where, where we are in terms of stability. It's, it's a volatile, volatile time period, for sure. We have seen softening, in international, in Central Europe. Germany's economy is under a little bit of pressure. Of course, we've talked about China, and we understand what's, what's happening there. We do expect, the softening to continue. I should say, we do expect it to be soft in Q4. You know, Hansgrohe is very resilient. We are gaining share significantly in Europe. So to combat those choppy market conditions, the team has just gone to work and really penetrated not only in Europe, but also doing a fine job holding up in China and continuing to grow in some of our higher growth markets. In terms of where we see 2024, I'm not gonna get into the specifics of calling it down on the region-by-region basis, is that we are beginning to see some favorable signs in terms of more steady demand coming out of Europe, and that gives me a lot of positivity. Matt, I'd just add, you're right. We did anticipate the international markets declining, so the deceleration that we saw here in Q3 was roughly in line with our expectations. And yeah, to Keith's point, you know, there are signs of stabilization. I'd say it's a little too early to call it a certainty or a trend, but definitely there are signs of stabilization. Got it. Okay. Thanks for that, guys. And then second one, on the retail channel. It sounded like it might have been a little weaker in plumbing, relative to wholesale. Clearly on the paint side, you might have seen DIY decelerating a bit. I'm curious about what that means for promotional activity. What are you kind of seeing at the retail level, you know, in terms of trying to address some of that kind of deceleration out there, and how might that impact your margin outlook? Thanks, guys. Right. As we sit today, it's been fairly consistent with what it's been in the past. And I would say that not only applies to our plumbing business, but also to paint. Meaning that, we do have periodic sales, you know, around some holidays. We have some new low price, you know, in spots, but by and large, it really has not, we have not seen any significant change in the promotional environment. You know, and that's a choice. Obviously, we are strategic partners with our customers, but really that is their choice. And then sometimes we participate in the funding and others we don't. So that's, that's really up to them, and to this date, at this time, we really haven't seen much of a change at all in the promotional environment. Great. Thanks, Keith. Thanks, Dave. Good luck, guys. Thank you. Thanks, Matt. Our next question comes from the line of John Lovallo of UBS. Please go ahead. Good morning, guys. Thank you for taking my questions. The first one is, you know, what did you see in terms of, of plumbing mix? You know, was geographic mix still a headwind internationally? And then in terms of, plumbing pricing, I think it was 4% through the first half. I think it was 3% in the, in Q3. Are you expecting further tapering as we move into Q4? Yeah, John, let me take the pricing. Yes, we do expect further tapering in Q4 as we annualize the majority of our price increases. We did take some selective price actions in plumbing earlier this year that will continue through, but the majority of our larger increases are annualized now as we head into Q4. So it'll be a little bit of a benefit, but smaller than what we saw in Q3. On the mix side, not a real material impact, but we have seen some mix impact, mainly geographic mix in our international business. So we're, we are a premium player in China. We like that position. We think that's a more resilient position, more consistent position to be in, and it feeds into the strength of our, of our Hansgrohe and Axor brands. And when China is under pressure a little bit more than the overall international market in general, that gives us a little bit of geographic mix, but it's not particularly material in the quarter, nor do we expect it to be throughout the year. A little bit more- Okay. Probably. Understood. And then, paint and coatings revenue was down high single digits, and total segment sales were down 10%. How much was the hardware business down, and what are you seeing there, and what were sort of the drivers of the declines there? Yeah. Our lighting and hardware businesses were down double digits, you know, a little bit more than the segment, John. You know, they tend to be a little more DIY-oriented type products, so they pulled back a little bit more than our paint and coating products in aggregate. So we did see more softening, sort of consistent softening, but we did see softness here in Q3 on the lighting and hardware businesses. Got it. Thank you, guys. Thanks, John. Our next question comes from the line of Adam Baumgarten of Zelman. Please go ahead. Hey, good morning, guys. I just maybe kind of backing into Q4 margin guidance. Pretty big step down sequentially, I think, you know, kind of bigger than maybe typically or seasonal. Just kind of anything to note there in terms of headwinds on the margin side? No, nothing beyond really what we've talked about. We may see a little bit more of international mix in our plumbing segment, that could provide a little bit more headwind. Dave, maybe you can add some color onto that. But we've Q4 is typically our slowest from a seasonality perspective. We do have costs that come into Q4, such as true-up on various accounts, compensation accounts, and that sort of thing, that can have some headwinds. We've got a little bit of—we bring up and started to more aggressively ramp up our new factories. We have a new paint facility outside Columbus, Ohio, and we have a new plumbing plant in Serbia, so there'll be a little more expenses there and headwinds. I think it's when you think about our margin and where we're going to be driving this in 2024. I think it's best to think about the full year 2023 margins, and then, you know, that strong incremental that I've talked about earlier on the call as it relates to share growth. Yeah, Adam, I think Keith had a good summary. In general, it remains an uncertain market, so there is some caution probably in Q4 on the margin side. So we do anticipate continued pressure from lower volumes, you know, potentially a little bit of negative mix in plumbing, as well as we'll have plant startup costs in both, in plumbing and decorative with our European faucet and shower facility coming online, as well as our Heath, Ohio, paint manufacturing distribution center coming online. Okay. Got it. No, that's helpful. And then just maybe if you could touch on POS trends at retail throughout the quarter and, and maybe into October, if you're willing to share that. Yeah. We don't really like to break it down within the quarter as there's a lot of variability in terms of load-in from new products and other comps and that sort of thing. It certainly varies. With respect to POS, I'd say we're seeing some fairly good trends. Okay. Thanks. That's all. Our next question comes from the line of Susan Maklari of Goldman Sachs. Please go ahead. Thank you. Good morning, everyone. Morning, Sue. Morning, Sue. My first question is, you know, maybe taking a step back, there's been obviously a lot of focus on the consumer in the last, you know, month or two, and thinking about housing and their ability to spend as rates move higher. How would you characterize the consumer today as you kind of look across the business? And any thoughts on shifts that are there, either positive or negative, and what that could suggest for next year as we think about the potential for maybe rates to change either up or down and where things could kind of come together with that? I'd characterize it by saying it's a mixed bag, Susan. When we look in Europe, we did see a pullback in the consumer, and there's some noise there with various legislation that's been... It's now clarified to a degree anyway, more than it was last time we talked, as it relates to driving for non-fossil fuel heating systems in Central Europe and Germany. And that's taking away some of the consumer's willingness to spend on, say, bath remodel projects and that sort of thing, as they're concerned with putting in greener heating systems per what they thought was pending legislation. It looks like that's going to now be protracted out to 2028, so we expect that consumer to start to come back. So in Europe, the consumer was kind of a little later to the game in the pullback, if you will, and is now coming back in Europe. In the U.S., holding up fairly well for us, you know, as expected, I should say. So, you know, we're not seeing any accelerated slowdown whatsoever. And again, I think there's a lot of volatility and uncertainty, and it's the full impact of inflation, I think is yet to be seen in the consumer. But by and large, the consumer is still holding in pretty good for us and our products. I think that's driven by the bang for the buck, if you will, that the consumer sees in painting a room and in changing out faucets and light fixtures, where it's a relatively inexpensive investment in your home. I think with work from home, where you know, that's not fully gonna go back to everybody working in the office, and that puts more wear and tear on the paint, and it's not that expensive to do it. You can do it DIY if you want. I think you know, that combination has helped us. Susan, I'd add, too, I mean, consumers clearly have been resilient. They're cautioning consumers now, since there have been significant increase in rates and inflation over the past couple of years. That said, you know, they have demonstrated they are resilient. When you look at home equity levels, they're feeling very good about their homes. So we do think that when things do stabilize, that that consumer will be very interested in remodeling their homes. And as Keith alluded to, we do think there will be a nice pent-up demand that we fully intend to capitalize on. Okay. That's helpful color. And then, thinking about capital allocation, I know that you closed the acquisition this quarter. As you think about, you know, priorities for cash and, and especially maybe on the buy-back side, any thoughts on how that could come together over the next couple of quarters? Yeah, Susan, our typical philosophy is to allocate all of our free cash flow after dividends to share repurchases or acquisitions. So with our significant cash flow and our, our pausing of share repos in Q3, we do tend to be fairly aggressive here in Q4, and, and we talked about allocating $225 million likely towards share repurchases. If you look at 2024, I think if you follow that basic formula of, excess free cash flow or free cash flow after dividends, allocated to share repurchases or acquisition, you'd be right in the ballpark on how we're thinking about share repos for next year. Okay, that's helpful. Thank you. Good luck with everything. Thanks, sir. Our next question comes from the line of Garik Shmois of Loop Capital. Please go ahead. Oh, hi. Thanks for taking my question. Question on DIY, paint. Just the move to down low teens year-on-year versus down to the single digits, I think, in Q2. Just curious, you know, that, that was a sizable change on a year-on-year basis, but curious how trends performed sequentially there. Yeah, on DIY paint, we did see softening in Q2, actually, and continued softening here in Q3. You know, I think you have to look at the low level of existing home sales, which are at a 13-year low. We haven't seen this level of existing home sales since 2010 at the end of the housing crisis. So we think that is affecting DIY paint sales. So that market is softer here in Q3, you know, roughly in line with our revised expectation coming out of Q2. Garik, I would say that, you know, the fundamentals are still supportive of DIY paint, particularly when you think about Millennials going into the housing market. The basic research that we've done is that these Millennials—that the Millennials are DIYers, and not only for a single project, but they're return DIYers. Paint, as we've shown with regards to, if there is such thing as a fun DIY project, that's how it's viewed. Our positioning with that is favorable for us. Understood. Thanks for that. A follow-up question just on commodity costs. I think you mentioned you're starting to finally see some relief here. Maybe if you could walk through some of the baskets that are particularly beneficial, right now in Q4, and if there's any early look into 2024 on the raw material side, that would be great. Well, container costs have come down off their peak levels. That certainly has helped with freight. Some of our metals, such as zinc, is off the 2022 high. Copper, I think, is at about $3.50 a pound now. 2022 high was closer to $4, so that's come off. Now, we haven't really seen that roll through the P&L because of the time in the water and then the flow-through of our inventory, but that would be a 2024 tailwind for us. All in all, in plumbing, let's call it low single digit deflation for the year. In paint, certain input costs have moderated. We've seen resins moderate a little bit. We're starting to see a little bit of deflation in Q3, but still inflation based on a full year. It's not, we believe, not gonna be enough to cover the inflation we saw in the first half. So let's call it approximately flat, all in for the total company for the full year. And then, the reduced commodity costs that we're seeing in the back end of the half of the year here would be benefits for us in 2024. Great. Thanks again. Best of luck. Our next question comes from the line of Stephen Kim of Evercore. Please go ahead. Yeah. Thanks very much, guys. Appreciate all the color. I guess my first question is related to your targeted 18%+ operating margins. You know, you're pretty close in both segments, but in decor, I'm curious as to whether or not there's a sub-segment, you know, particularly, either hardware or lighting, where you're further away from your target than you are in paint. Basically, is that true, and is, you know, maybe painting or, sorry, lighting or hardware a little further away? And then also within plumbing, you know, is there a sub-segment, you know, or a couple of areas worth calling out within your plumbing portfolio, where, again, maybe you're a little further away from your targeted levels? Yeah. When you look across, Steve, in our segments and within segments, not everything is the same margin. So there is a distribution of margins. And, you know, when you think about hardware, hardware is lower margin than paint, and that is an area where we're looking to improve. And I will tell you that 18% is the target that we're shooting for now, but we think we have significant room to continue to drive that even higher. And as I mentioned in my prepared remarks, we'll be talking about where we see some long-term margin targets on our call next quarter. Within plumbing, you know, we have a broad plumbing platform, and we've talked before about how there's a continuum of margin in that platform, from some of the beautiful chrome-plated jewelry in the kitchen and bath and plumbing to some of the less decorative components, say, of a, you know, a plastic shower pan that we would install in our bathing function, bathing business. So there is variability in margin. And I think the key takeaway I'd like to share with you is that we've demonstrated the ability to execute and drive margin, be it with our focus on where we play and with our Masco Operating System to drive efficiency. So we'll be tackling the whole business, but yes, there's variability, of course, across our segments. So within plumbing, there's not a particular, you know, let's say, way of talking about it that segments out, maybe by country or sort of price point or something like that, where you're a little bit further away from your goal within that segment? Well, there's not a whole lot of variability when we look geographically. And we look at all these things. We look at margin variability on a product type basis. We look at margin variability based on the raw component makeup of the products. We look at margin variability across channels. So, that's all part of our operating system that we use to drive improvements. But we're not gonna break it out specifically by those components as we talk here. Okay, that's fine. Regarding, you know, overall, you know, your improved margin, you talk about, you know, cost savings and some of those, you know, I think you highlighted, you know, there's a little bit of raws that are starting to come to you as a benefit, and then you have freight, which you called out as well. But you've also talked about, you know, just sort of other productivity initiatives and so forth. And so I'm curious, as we look into, you know, let's say Q4, if you were to sort of segregate out things like freight and, you know, price over raws, how much is, would you say, related to productivity? Like, things that are, you know, more sort of permanent cost saving efforts that you've made. I mean, would you put that in the, you know, 10-20 basis point range overall? Or, I mean, is it? Just if you can help us understand what some of those initiatives have been, adding or are expected to add here, maybe in Q4, or if you wanna talk the full year or whatever. Hey, Steve, we have made very nice improvements on the productivity line. Recall, we had some inefficiencies in the back half of 2022, and particularly in plumbing, that we've done a very nice job getting on top of. I'd say, in terms of bucketing, the biggest driver is clearly getting our price-cost relationship back to where it should be throughout this year. So we've had very nice cost recovery this year, since we did lag it a bit last year, so that's the biggest bucket. The productivity is a nice tailwind to help with that, but the biggest bucket is the price- cost recovery. Okay. Thanks very much, guys. Thanks, Steve. Our next question comes from the line of Truman Patterson of Wolfe Research. Please go ahead. Hey, good morning, everyone. Thanks for taking my questions. Keith, just wanted to follow up. You mentioned that brass deflation for the year should kind of run in the down low single-digit%. Should we assume that was likely inflationary in kind of Q1 and perhaps Q4 is trending down, maybe in the, you know, mid-single-digit% or better range as we said today? Yeah. Yeah, Yeah, Truman, that's about right. Yeah, Truman, I'd add, too, just copper and zinc are down, but they have been bouncing around, too. They've gone down these levels, have gone back up close to the 2022 averages. So, I wouldn't, I wouldn't run with that consistently through 2024 at this point, but it does look like it, it'll be a little bit of a benefit. Okay, okay, gotcha. And then, as we, you know, look at your margin performance in both segments on a year-over-year basis, is there any way you could frame how much your, you know, investments in both businesses stepped up in Q3? Or, you know, was it relatively light, versus your expectations, kind of given the margin performances? I'm just trying to understand if, you know, perhaps some of these costs are really, you know, fully hitting in Q4 that might have been expected in Q3. Yeah, I'd say investments were roughly in line with what we anticipated in Q3, maybe a little bit light. We do plan to continue to invest in our business, as Keith talked about. It will impact a little bit on Q4, but, you know, roughly in line with probably what we saw in Q3. I'd say the margin improvement is much more of our, as we've talked about, the productivity improvements, as well as getting the price-cost relationship back to where it should be. Okay, perfect. Thank you, guys. Thanks, Truman. Our last question comes from the line of Philip Ng of Jefferies. Please go ahead. Hey, guys. Thanks for squeezing me in. I guess for you, Dave, you kind of mentioned price-cost was a huge driver for margins this year, particularly plumbing. You know, your products have obviously resonated with consumers and shown good pricing power, and your competitor has actually alluded to taking price next year in plumbing. Do you have any pricing actions geared for 2024? And when we look at the pace of price-cost spread widening this year, do you see that spread widening, the pace of that spread widening, even faster perhaps next year? Again, we'll get into our detail for 2024 on the next call. We've taken some targeted price in plumbing this year here in Q3, and our demonstrated ability, as you mentioned, with our pricing power, is to stay in front of to keep price-cost in our sights and go after price through our channels when we need it. We tend to keep it and hold onto it longer in plumbing than we do in decorative, given our relationship with our significant customer in coatings. So our pricing power is pretty strong. It's too early to say if we're going to take price next year. We'll have to see. What that means in terms of our innovation pipeline and our new products that come out and where commodities ultimately end up. So too early to call whether or not we're gonna do any price in plumbing in 2024, but certainly, if needed, we've got the capability and the pricing power with our brands to be able to do that. Okay. Keith, just to clarify, you meant Q3 price increase in plumbing. That was last year, right? Right. Not so much. Okay. We've taken some targeted. That's correct. Sorry about that. We've taken some targeted price here, earlier. Okay this year as well. Okay. Makes sense. And then on the DIY side of things, for paint, any color on where volumes are shaking out right now as of Q4 in terms of your guidance relative to pre-COVID levels? And, and Keith, you kind of mentioned that, you see, good momentum going forward long term on DIY, just given the, Millennial cohort. Do you see that kind of flipping in 2024 in terms of, trends in DIY versus wholesale? You know, the, the Pro channel has definitely held up much better than, DIY this year in the retail channel. Yeah. The DIY market during COVID was a bit of a rollercoaster, where it took a significant improvement, if you recall, when folks were reticent to have Pros in their homes. And then when that kind of fear of COVID relaxed a little bit and people were more comfortable with Pros coming in, Pro took off and DIY went down. And that, I think, is it bodes it, it speaks to our diversification, our strength in Pro for that customer, that we can handle that variation and be there to catch that and grow share. But it has been an up-and-down market. I will tell you where we sit now in DIY, that absolute volumes are lower than our pre-pandemic, call it 2019 levels, in DIY. With respect to, as I said, we'll get into more detail in about next year on our Q4 call. I'm not so sure that the Millennial cohort will be enough to really drive significant growth overall in the DIY segment. But we'll talk about where we see DIY more in detail next call. Okay. Thank you. Appreciate the call. We'd like to thank all of you for joining us on the call this morning, and for your interest in Masco. That concludes today's call. Thank you.