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It has been about a month since the last earnings report for Griffon (GFF). Shares have added about 2.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Griffon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Griffon’s Q4 Earnings Top Estimates, Revenues Rise Y/Y
Griffon reported fourth-quarter fiscal 2024 (ended September 2024) adjusted earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate of $1.21. The bottom line increased 23.5% year over year.
Total revenues of $659.7 million surpassed the consensus estimate of $642 million and increased 3% year over year.
Segmental Details
Home and Building Products: Sales from the Home and Building Products segment (representing 61.6% of net revenues) were $406.6 million, up 3.2% year over year due to a favorable product mix of 2% and increased volume of 1%. The segment’s revenues were $1.6 billion in fiscal 2024, flat year over year.
Consumer and Professional Products: The segment’s revenues (38.4%) summed $253.1 million, up 2% year over year driven by increased volume from Australia, inclusive of the Pope acquisition (3%). The segment’s revenues in fiscal 2024 declined 6% to $1.0 billion.
Margin Profile
Griffon’s cost of sales increased 0.2% year over year to $396.2 million. Selling, general and administrative expenses decreased 3.5% year over year to $151.8 million.
Total operating expenses declined 8.8% year over year to $151.8 million. The gross margin increased to 41.1% from 39.2% in the year-ago period.
Balance Sheet & Cash Flow
At the end of the fourth quarter, Griffon had cash and cash equivalents of $114.4 million compared with $102.9 million at the end of fiscal 2023 (ended September 2023). Long-term debt, net of current maturities, was $1.52 billion at the end of the fourth quarter compared with $1.46 billion at fiscal 2023-end.
In fiscal 2024, the company generated net cash of $380 million from operating activities compared with $431.8 million cash generated in the year-ago period.
Free cash flow was $326.1 million in fiscal 2024 compared with $389.1 million cash flow in the prior-year period.
Outlook
Griffon expects fiscal 2025 revenues to be consistent with the revenues generated in fiscal 2024. Adjusted EBITDA is expected to be $575-$600 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.