The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Griffon (NYSE:GFF) and the rest of the home construction materials stocks fared in Q1.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 10 home construction materials stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.6%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $611.7 million, down 9.1% year on year. This print fell short of analysts’ expectations by 1%, but it was still a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
“I am pleased to report that the performance of both of our segments for the first half was in-line with our expectations,” said Ronald J. Kramer, Chairman and CEO of Griffon.
Griffon Total Revenue
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $67.20.
Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products.
Simpson reported revenues of $538.9 million, up 1.6% year on year, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
Simpson Total Revenue
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $154.40.
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $1.80 billion, down 6.5% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
The stock is flat since the results and currently trades at $61.79.
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $776 million, down 19.1% year on year. This result beat analysts’ expectations by 0.8%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ adjusted operating income estimates.
JELD-WEN had the slowest revenue growth among its peers. The stock is down 39.9% since reporting and currently trades at $3.37.
Credited with introducing the first variable-speed pool pump, Hayward (NYSE:HAYW) makes residential and commercial pool equipment and accessories.
Hayward reported revenues of $228.8 million, up 7.7% year on year. This number surpassed analysts’ expectations by 7.1%. It was an exceptional quarter as it also produced an impressive beat of analysts’ organic revenue and EBITDA estimates.
Hayward achieved the biggest analyst estimates beat among its peers. The stock is up 2.1% since reporting and currently trades at $13.61.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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