Company: MWA
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001350593-25-000043
Chunk: 120

Company: Mueller Water Products, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part II, Item 8
Chunk 120
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 driven by the aging water infrastructure and increasing water rates, moderated by budgetary and operational pressures on municipalities.  We anticipate that new residential construction activity and new lot and land development will be relatively constrained by the uncertainty in the economy, affordability concerns and interest rate environment, depending on the geographic region.  In July 2025, Blue Chip Economic Indicators forecasted a 2.2% decline in housing starts for the calendar year 2025 as compared to calendar year 2024.  

After our short-cycle channel and customer inventory levels largely normalized during the first quarter of 2024, our orders and shipments reflected a more typical demand environment compared with the high backlog environment we experienced during and after the COVID-19 pandemic. In fiscal 2025, we have experienced a more normalized demand environment.  Therefore, we anticipate quarterly consolidated net sales as a percentage of fiscal 2025 consolidated net sales to be the highest in the third quarter and lowest in the first quarter, with a sequential increase in consolidated net sales in the second quarter as the construction season ramps up for the spring season.  Accordingly, for the remainder of fiscal 2025, we assume that we will experience typical seasonality and a normalized demand environment, leading to lower consolidated net sales for the fourth quarter relative to the third quarter. 

Inventory costs for the first nine months of 2025 increased approximately 1.5% due to inflation.  For the remainder of fiscal 2025, we anticipate that inflation will continue to rise, particularly for purchased parts, due to new tariffs enacted after March 2025.  At this time, excluding the impact of tariffs, we expect inflation to modestly impact manufacturing and transportation costs.  We have implemented targeted price increases for certain products, as well as supply chain and operations initiatives, to mitigate these higher tariffs.  We will continue to monitor the market and economic conditions impacting our business and take appropriate actions to address inflationary and other cost pressures, including increased tariffs, by implementing price increases, cost containment measures and supplier management measures, among other mitigating actions.

26

Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024 

 Three months ended June 30, 2025 Water Flow SolutionsWater Management SolutionsCorporate  Total     (in millions)Net sales$216.6 $163.7 $— $380.3 Gross profit$83.8 $61.9 $—