IRVING, Texas - Builders FirstSource, Inc. (NYSE:BLDR), a leading supplier of building products, prefabricated components, and value-added services, reported a modest increase in first-quarter net sales but faced a decline in net income and adjusted EBITDA.
The company's shares fell 2.1% as it issued soft guidance for the full year 2024, indicating potential challenges ahead.
For the first quarter ended March 31, 2024, Builders FirstSource announced net sales of $3.9 billion, a slight 0.2% rise from the same period last year, with core organic sales remaining flat.
The company's gross profit margin saw a decrease of 190 basis points to 33.4%, primarily due to a shift in product mix toward lower-margin, early-stage homebuilding products and margin normalization in the Multi-Family segment.
Net income for the quarter decreased by 22.5% to $258.8 million, or $2.10 per diluted share, compared to $2.41 in the prior year period. Adjusted net income also saw a decline of 20.2% to $327.4 million. Adjusted earnings per diluted share came in at $2.65, surpassing analysts' estimates of $2.29, yet representing a 10.5% decrease from the previous year's $2.96.
Dave Rush, CEO of Builders FirstSource, commented on the results, highlighting the company's resilience in the face of a weakening Multi-Family market and higher mortgage rates.
"Despite these macro challenges, we are driving growth through our value-added products portfolio and industry-leading digital platform," said Rush.
CFO Peter Jackson added, "Our first quarter results demonstrate the effectiveness of our strategy and operating model amid a measured start to the year. We are leveraging our sustainable competitive advantages and strong financial position to drive future growth and value creation for our customers and shareholders."
Looking ahead, Builders FirstSource provided full-year 2024 guidance, projecting net sales to be in the range of $17.5 billion to $18.5 billion, with the midpoint below the analyst consensus of $17.98 billion. This guidance reflects the company's expectations of the impact of price, commodities, and margins for 2024.
The stock's downward movement reflects investor reaction to the company's forward-looking statements, which suggest cautiousness about the upcoming year's performance. Despite the current quarter's earnings beat, the soft guidance for FY2024 indicates that Builders FirstSource may face headwinds that could affect its growth trajectory.
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