BEACHWOOD, Ohio - MasterBrand, Inc. (NYSE: MBC), North America's leading residential cabinet manufacturer, reported first-quarter earnings that surpassed analyst expectations.
The company announced an adjusted EPS of $0.29, which was $0.04 higher than the analyst estimate of $0.25. However, net sales saw a decline of 5.7% YoY, totaling $638.1 million, which still managed to exceed the consensus estimate of $629 million.
The company's net income for the quarter increased to $37.5 million from $35.0 million in the same quarter last year, marking a 7.1% rise. This improvement was attributed to a combination of lower interest expenses and a reduced effective tax rate.
MasterBrand's gross profit remained steady at $204.7 million, with gross profit margin expanding by 190 basis points to 32.1%. This margin expansion was driven by cost savings from strategic initiatives and continuous improvement, which offset the impact of lower average selling prices and personnel inflation.
Adjusted EBITDA for the quarter was $79.4 million, slightly down from $81.5 million in the first quarter of the previous year, with the adjusted EBITDA margin increasing by 40 basis points to 12.4%. Diluted earnings per share also saw a slight increase from $0.27 to $0.29, and the adjusted diluted EPS rose from $0.28 to $0.29.
President and CEO Dave Banyard commented on the results, stating, "We delivered a solid quarter of results to start the year, with continued year-over-year adjusted EBITDA margin expansion and strong first quarter free cash flow."
He attributed the success to progress in strategic initiatives and expressed confidence in the company's future performance.
For the full year 2024, MasterBrand reiterated its financial outlook, expecting a low single-digit percentage to flat year-over-year net sales decline. The company anticipates adjusted EBITDA to be in the range of $370 million to $400 million, with an adjusted EBITDA margin of approximately 14.0 to 14.5 percent.
Adjusted diluted EPS is forecasted to be between $1.40 and $1.60, aligning closely with the analyst consensus of $1.45.
MasterBrand's financial position remains robust, with $153.7 million in cash and significant availability under its revolving credit facility. The company's disciplined approach to working capital management resulted in positive free cash flow of $11.7 million for the quarter.
The company's stock movement was not disclosed, and no specific driver of the move was provided. However, the reaffirmed guidance and earnings beat suggest a stable outlook for MasterBrand as it continues to navigate market demands and strategic initiatives.
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