General

6 Months Ended

Jul. 04, 2026

Accounting Policies [Abstract]

General

General

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Mohawk,” or “the Company” as used in this Form 10-Q refer to Mohawk Industries, Inc.

Interim Reporting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with instructions to Form 10-Q and do not include all of the information and footnotes required by United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto, and the Company’s description of critical accounting policies, included in the Company’s 2025 Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission. Results for interim periods are not necessarily indicative of the results for the year.

On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) by the executive branch are not lawful. On March 4, 2026, the Court of International Trade (CIT) ordered U.S. Customs and Border Protection (CBP) to begin the refund process for all importers who were subject to IEEPA tariffs. As the nature, timing, and extent of any such refunds were uncertain, the Company elected to account for refunds as gain contingencies, based on the original tariff cost recognition in accordance with ASC 450, Contingencies (“ASC 450”).

Recent Accounting Pronouncements—Recently Adopted

On July 30, 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that allows public entities to assume that current conditions as of the balance sheet date will not change for the remaining life of the asset. That is, current information may be used without making adjustments for expected future changes to relevant data that may impact collectability of receivables. The Company adopted the practical expedient allowed in ASU 2025-05 as of January 1, 2026, with no material impact on reported financial results.

On November 26, 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted the new guidance on a prospective basis as of January 1, 2026, with no impact on the reported financials, as there were no transactions occurring within the scope of the new guidance.

Recent Accounting Pronouncements—Effective in Future Periods

On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of income statement expense. ASU 2024-03, as amended by ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, requires disaggregated disclosure of income statement expenses for public business entities (“PBEs”). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance.

On September 19, 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes all references to software development project stages, and requires entities to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform its intended function. The new guidance requires entities to consider two factors when determining whether there is significant development uncertainty when considering the probable to complete recognition threshold: (1) Whether the software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing; and (2) whether the entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements. The new guidance also supersedes the website development costs guidance and incorporates the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40.

ASU 2025-06 will be effective for annual and interim reporting periods beginning after December 15, 2027, and early adoption is permitted as of the beginning of an annual reporting period. The new guidance may be implemented on a prospective basis, a modified transition approach, or a retrospective transition approach. The Company is evaluating the impact of the new guidance.

On May 19, 2026, the FASB issued Accounting Standards Update 2026-02—Environmental Credits and Environmental Credit Obligations (Topic 818), which provides guidance on the recognition and measurement of environmental credits. Under the new ASU, an entity is required to recognize an environmental credit as an asset when it is probable that the environmental credit will be used to settle an environmental credit obligation, transferred in an exchange transaction, or used in a nonreciprocal transfer. In other circumstances (for example, environmental credits acquired to satisfy a voluntary net zero emission initiative), the cost to obtain the environmental credit is expensed when incurred. Entities will also be required to recognize an environmental credit obligation liability when events occurring on or before the reporting date result in an environmental credit obligation (for example, when emissions are created).

The guidance in this Update is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods with early adoption permitted as of the beginning of an annual reporting period. The guidance shall be applied on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. However, prior period financial statements shall not be recast. The Company is currently evaluating the impact of the new guidance.

Revision of Previously Issued Financial Statements

As disclosed in Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, the Company identified an immaterial error related to intercompany activity impacting accounts receivable. The Company determined that the impacts of the error were not material, individually or in the aggregate, to its previously issued Consolidated Financial Statements and accompanying Notes to the Consolidated Financial Statements for any of the prior quarters or the annual period in which they occurred. However, in accordance with Staff Accounting Bulletin No. 108 of the Securities and Exchange Commission, the Company concluded that correcting the cumulative error in the period during which the error was identified would be material to its results of operations for the fiscal year ended December 31, 2025. As a result, the opening retained earnings as presented in the Form 10-K was adjusted by $42.1 million.

The identified error does not impact the consolidated statements of operations or cash flows for any of the periods presented in this filing. Additional detail regarding the nature of the revision is included in Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025.