John Sznewajs
VP & CFO at Masco
Thank you, Keith, and good morning, everyone. As Dave mentioned, my comments today will focus on adjusted performance, excluding the impact of rationalization and other onetime items.
Turning to Slide 7. Sales in the quarter decreased 10%, and excluding currency decreased 9%. Lower volume has decreased sales by 14%, partially offset by net selling prices of 6%. North American sales decreased 10% and local currency, international sales decreased 3%. Despite lower volume, our strong execution in the quarter resulted in our gross margin expanding 150 basis points to 33.6%. This is the first time in seven quarters that we've expanded gross margins as we are now recovering the significant cost inflation we have absorbed over the past two years.
Our SG&A as a percentage of sales was 17.8% due to higher brand and marketing investments such as trade shows and sales meetings to support our growth strategy of investing in our brands, service and innovation. Operating profit in the first quarter was $312 million, and operating margin was 15.8%. Operating profit was impacted by lower volumes, higher input costs and growth investments partially offset by higher net selling prices. Lastly, our EPS in the quarter was $0.87.
Turning to Slide 8. Plumbing sales in the quarter decreased 10% against the 9% count, and excluding currency, decreased 8%. Lower volume decreased sales by 12% partially offset by net selling prices, which increased sales by 5%. North American plumbing sales decreased 10% in local currency. This was driven by continued lower demand that we started to experience in the third quarter of last year. This lower demand was fairly broad-based across product categories and channels. Our Spa business which is approximately 15% of the segment declined over 20% that has now worked through the significant backlog generated from the spike in demand for its products. International public sales decreased 3% in local currency, against an 18% comp as demand softened in many European markets and China.
For plumbing overall, changes in channel inventory positions during the quarter did not significantly impact our results. Segment operating profit in the first-quarter was $202 million, operating margin of 16.5%. Operating profit was impacted by lower volumes. Higher brand and marketing investments. Partially offset by higher net selling prices. This resulted in a Dechra metal margin of 19%. Well, input costs have declined from their peak levels, particularly container cost. Overall input costs remain elevated.
Turning to Slide 9 decorative Architectural sales decreased 10% in the first-quarter against the strong 17% comp. Paint sales declined high-single-digits, with PRO paint sales decreasing mid single-digits against a robust comparable over 50% in the first-quarter of 2022. DIY paint sales declining high-single-digits. Keith mentioned, we're gaining shelf-space. There are adjacent product offerings such as aerosols interior stains caulks and sealants and applicators. Propane, we are investing along with our partner, our joint capabilities to continue to grow share. This large and growing market. Lastly, our operating profit was $133 million and operating margin was 17.6%. Operating profit was impacted by lower volumes and higher input costs. Partially offset by higher net selling prices. While we have seen modest sequential relief in certain paint input costs, other increased costs continue to experience upward pressure such as TiO2 labor and transportation costs. In the overall input basket remains elevated.
Turning to Slide 10. Our balance sheet remains strong with net debt to EBITDA at 2.2 times at the end of the quarter. We ended the quarter with approximately $1.3 billion of balance sheet liquidity. Working capital as a percent of sales declined 100 basis points to 19.1% in a net 13 day reduction. With an improvement in working capital, net cash from operating activities was $33 million, an improvement of $260 million compared to prior year. With expected lower volumes and less supply chain disruptions this year, we anticipate working capital as a percent of sales to continue to improve to be approximately 16.5% at year-end.
During the first quarter, we repurchased 1.1 million shares for $56 million, returned $65 million to shareholders through dividends. As we discussed on our fourth quarter call, we anticipate deploying approximately $500 million towards share repurchases or acquisitions for the full year, with activity likely more weighted to the second half of the year. Lastly, we have retired the $200 million remaining on our term loan that matures today by borrowing on our revolver. We will likely repay outstanding borrowings by a revolver during the third quarter.
Now let's turn to Slide 11 and review our outlook for the year. We had a better than planned start to the year. However, we believe the delayed impact of rising rates, tighter credit and lower consumer spending in the face of persistent inflation have yet to fully play out in the economy. With these uncertain times as the backdrop, we are maintaining our full year outlook at this time. For Masco overall, we are planning for volumes to be down in the low double-digit range, partially offset by low single-digit pricing. Based on this assumption, we expect 2023 sales to decline approximately 10% with operating margins of approximately 15%. At this time, currency is projected to have a minimal impact on our 2023 results.
Our SG&A as a percentage of sales trended below normal levels during the pandemic. However, as we continue to invest in our business for future growth, while maintaining cost discipline, we expect this percentage to increase back to a more normalized pre-pandemic level to be around 17.5% for 2023. As always, we will take appropriate actions to address our cost as the year develops based on market conditions.
In our plumbing segment, we expect 2023 sales to decline in the range of 10% to 14%. We anticipate the full year Plumbing margins will be roughly flat with 2022 segment margins at approximately 16%. Lower volumes and plant setup costs will impact margins with favorable selling price increases partially offsetting these headwinds.
In our decorative architectural segment, we expect 2023 sales to decline in the range of 5% to 10%. Looking specifically at paint for 2023, we currently anticipate our DIY paint to decrease high single digits and our PRO paint business to decrease mid-single digits is recycled over 25% pain growth -- PRO paint growth in 2022. We anticipate full year decorative architectural margin to be approximately 16%. This is largely due to our significant pricing actions in this segment and typically only recover the dollar amount of inflation. As a result, all else equal, operating profit dollars remain neutral from cost recovery pricing actions, the results in margin compression. We are also planning an increased investment in people and capabilities in 2023 to drive future growth in our PRO paint business to have a greater impact in the coming quarters.
Finally, as Keith mentioned earlier, our 2023 EPS estimate remains three $0.10 two-three 1,040 cents. This assumes a 226 million average diluted share count for the year and a 24% effective tax rate. Additional modeling assumptions for 2023 can be found on Slide 14 in our earnings deck.
Before I conclude, I want to take a moment to thank Keith for his 10 years of partnership, our Board and the entire Masco team for everything over the last 27 years. Leaving Masco is bitter sweet for me. I look forward to keeping in touch with my friends and colleagues here and watching the company's continued growth and success. Dave is a very capable executive. We have worked together for more than 20 years, and I know the finance team won't miss a beat under a steady leadership in his new role as interim CFO. And I'm proud of everything that we have accomplished together at Masco and wish the team the best of luck in the future.
With that, I'd like to open the call for Q&A. Operator?
