Builders FirstSource Q4 Earnings Beat Estimates, Net Sales Miss

Builders FirstSource, Inc. BLDR reported mixed results for the fourth quarter of 2024, with earnings surpassing the Zacks Consensus Estimate but net sales missing the same.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Both metrics declined year over year, owing to lower core organic sales and commodity deflation, partially offset by growth from acquisitions and one additional selling day. Margins also declined due to ongoing Single-Family and Multi-Family margin normalization.Shares of this manufacturer and supplier of building materials inched down 4.7% in today’s pre-market trading session.Nonetheless, the company remained resilient in a challenging environment, maintaining a mid-teens EBITDA margin in 2024. Strategic initiatives and an efficient operating model supported performance. Going forward, it aims to enhance operational efficiency through investments in value-added solutions, installation services and advanced technology. A focus on organic growth and acquisitions positions the company for sustained performance across varying market conditions.BLDR’s Earnings & Revenue DiscussionThe company reported adjusted earnings per share (EPS) of $2.31, which surpassed the consensus mark of $2.24 by 3.1%. However, the reported figure decreased 34.9% from the year-ago quarter, owing to lower adjusted net income, partially offset by share repurchases.Net sales of $3.82 billion missed the consensus mark of $3.91 billion by 2.4% and fell 8% on a year-over-year basis. Core organic sales declined 8.8% from the prior-year quarter. A commodity price deflation of 3.1% of net sales and softness in Multi-Family were partially offset by 2.5% growth from acquisitions and one additional selling day contribution of 1.4%.Builders FirstSource, Inc. Price, Consensus and EPS Surprise Builders FirstSource, Inc. price-consensus-eps-surprise-chart | Builders FirstSource, Inc. QuoteCore organic growth in Single-Family decreased 6.8% and Multi-Family plunged 29.1%, while Repair and Remodel (R&R)/Other increased 0.1%. Multi-Family and Single-Family lowered net sales by 4.1% and 4.7%, respectively, while R&R/Other remained unchanged.BLDR’s Sales According to Product CategoryValue-Added Product Sales: For the reported quarter, sales of value-added products (comprising 49.7% of the quarterly net sales) were $1.9 billion, down 12% from the prior year. Within the segment, Manufactured products totaled $899.6 million and Windows, doors & millwork was $997.8 million, down 18.9% and 4.7%, respectively, from a year ago.Specialized Product & Other: Gypsum, Roofing & Insulation products sales (comprising 25.3% of the quarterly net sales) increased 1.3% from the year-ago quarter to $966.2 million.Lumber & Lumber Sheet Goods: For the quarter, segment sales (comprising 25% of the quarterly net sales) decreased 8.1% year over year to $956.7 million.Operating Highlights of BLDRGross margin of 32.3% contracted 300 basis points (bps) due to Single-Family and Multi-Family margin normalization. As a percentage of net sales, adjusted SG&A expenses increased 80 bps to 24.3%.Adjusted EBITDA fell 28% on a year-over-year basis to $493.6 million. Adjusted EBITDA margin also contracted 360 bps year over year to 12.9%, owing to lower gross profit margins, partially offset by lower operating leverage.BLDR delivered approximately $13 million in productivity savings, related to operational excellence and supply-chain initiatives.BLDR’s 2024 HighlightsBLDR generated net sales of $16.4 billion, down 4.1% from 2023, due to a decline in core organic net sales of 5.1% and commodity deflation of 1.8%. Nonetheless, acquisitions and the benefits from two additional selling days contributed 2.1% and 0.7%, respectively, to net sales.Adjusted EPS of $11.56 decreased 20.8% from $14.59 reported in 2023. Gross margin of 32.8% contracted 240 bps year over year. Adjusted EBITDA decreased 19.6% to $2.3 billion and adjusted EBITDA margin contracted 280 bps from 2023 to 14.2%.In 2024, BLDR delivered approximately $117 million in productivity savings related to operations excellence and supply-chain initiatives.Financial Details of BLDRAs of Dec. 31, 2024, Builders FirstSource had cash and cash equivalents of $153.6 million, up from $66.2 million at 2023-end. The company had liquidity of $1.8 billion at 2024-end, including $1.6 billion in net borrowing available under the revolving credit facility.Long-term debt, net of current portion, discounts and issuance costs, was $3.7 billion, up from $3.18 billion at 2023-end. As of Dec. 31, 2024, the net debt to adjusted EBITDA ratio was 1.5x compared with 1.1x in the prior year.Net cash from operations was $1.9 billion during the year compared with $2.3 billion a year ago. Free cash flow was $1.5 billion in 2024.BLDR repurchased 8.9 million shares of its common stock at an average price of $170.74 per share for $1.5 billion. The company has approximately $500 million remaining in its $1 billion share repurchase authorization announced in August 2024.BLDR’s 2025 GuidanceFor 2025, BLDR expects net sales between $16.5 billion and $17.5 billion. Acquisitions completed within the last 12 months are expected to contribute 4-4.5% in net sales growth. However, a fewer selling day in 2025 is expected to reduce net sales by 0.4%.Geographically, Single-Family starts are expected to be flat (down low-single digits to up low-single digits). Multi-Family starts are expected to be down mid-teens and R&R activity is anticipated to remain up low-single digits compared with the previous year.Gross margin is likely to be in the range of 30-32%. Adjusted EBITDA is expected to be between $1.9 billion and $2.3 billion. Adjusted EBITDA margin is expected to be in the range of 11.5-13%. The company expects to deliver $70-$90 million in productivity savings in 2025.Free cash flow is expected between $600 million and $1 billion, assuming average commodity prices in the range of $380-$430 per thousand board feet.The company expects interest expense in the range of $250-$270 million, an effective tax rate of 23-25% and total capital expenditures within $350-$450 million. Depreciation and amortization expenses are estimated to be between $550 million and $600 million.BLDR’s Zacks Rank & Recent Retail-Wholesale ReleasesBuilders FirstSource currently carries a Zacks Rank #5 (Strong Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Restaurant Brands International, Inc. QSR reported fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.During the quarter, consolidated comps increased 2.5% year over year and net restaurants grew 3.4% year over year. Global system-wide sales rose 5.6% year over year. QSR unveiled its long-term consolidated performance expectations from 2024 to 2028. It anticipates achieving more than 3% growth in comparable sales and at least 5% net restaurant growth.McDonald's Corporation MCD reported fourth-quarter 2024 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased year over year. Its Accelerating-the-Arches strategy remains the right approach for expanding market share.At company-operated restaurants, sales were $2.31 billion, down 7% year over year. Sales at franchise-operated restaurants amounted to $3.95 billion, which increased 2% year over year. The global comps increased 0.4% compared with 3.4% growth in the prior-year quarter. MCD’s comps increased after witnessing a decline in the preceding two quarters.YUM! Brands, Inc. YUM reported fourth-quarter 2024 results, with adjusted earnings and total revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.The company’s top-line performance reflected solid contributions from the KFC, Pizza Hut and Taco Bell divisions. It reported progress in the digital space, with digital sales rising approximately 15% and the digital mix surpassing 50%, moving closer to its long-term goal of 100% digital sales. Worldwide system sales — excluding foreign currency translation — grew 8% year over year, with Taco Bell increasing 14% and KFC rising 6%. The metric rose 3% year over year for Pizza Hut.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McDonald's Corporation (MCD): Free Stock Analysis Report Yum! Brands, Inc. (YUM): Free Stock Analysis Report Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report Restaurant Brands International Inc. (QSR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks