Here's What You Must Know Ahead of Builders FirstSource's Q2 Earnings

Builders FirstSource, Inc. BLDR is slated to report second-quarter 2025 results on July 31, before market open.

In the last reported quarter, the company’s adjusted earnings per share (EPS) marginally surpassed the Zacks Consensus Estimate by 0.7%, but net sales missed the same by 0.8%. On a year-over-year basis, both the top and bottom lines tumbled 6% and 43%, respectively.

BLDR’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 3.7%.

Trend in BLDR’s Estimates

The Zacks Consensus Estimate for Builders FirstSource’s second-quarter EPS has moved north to $2.35 from $2.33 in the past seven days. But the estimated figure indicates a 32.9% year-over-year decline from EPS of $3.50.

Builders FirstSource, Inc. Price and EPS Surprise

Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote

The consensus estimate for net sales is pegged at $4.24 billion, indicating a decline of 4.9% from $4.46 billion reported in the year-ago quarter.

Factors to Shape Builders FirstSource’s Q2 Results

Net Sales

Builders FirstSource’s net sales are expected to have declined year over year in the quarter to be reported because of notable decreases in the multi-family and single-family customer segments. The sales volume decline in its manufactured products and windows, doors and millwork product categories is likely to have mainly added to the downtrend during the second quarter.

The ongoing softness in the housing market due to elevated mortgage rates and persistent inflationary pressures is still challenging housing affordability, which is expected to pull back BLDR’s top-line results. Besides, uncertainty around potential policy changes is likely to have further weighed on performance.

For the second quarter, the company expects net sales between $4.1 billion and $4.4 billion, down from $4.5 billion reported in the year-ago quarter.

That said, BLDR’s focus on strategic acquisitions, digital solutions and productivity, as well as investments in innovative and value-added products, is likely to have backed its quarterly performance to some extent.

Earnings

The bottom line of Builders FirstSource is likely to have declined year over year due to ongoing single-family and multi-family margin normalization alongside a below-normal housing starts environment. Moreover, reduced operating leverage and continued pressure in commodity product categories despite cost-saving efforts are expected to have pressured the margins in the second quarter.

For the to-be-reported quarter, BLDR expects adjusted EBITDA in the range of $475-$525 million, down from $669.7 million reported in the year-ago quarter. The company’s expectations about tariff cost impact are likely to have added to the headwinds during the second quarter.

What the Zacks Model Predicts for BLDR

Our proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.

Earnings ESP: BLDR has an Earnings ESP of -2.07%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are some companies in the Zacks Retail-Wholesale sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

Amazon.com, Inc. AMZN currently has an Earnings ESP of +7.37% and a Zacks Rank of 2 at present.
 
In the to-be-reported quarter, Amazon’s earnings are expected to increase 8.1% year over year. Amazon’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 20.7%.

Yum! Brands, Inc. YUM has an Earnings ESP of +1.34% and a Zacks Rank of 2.

Yum! Brands is expected to register a 7.4% gain in earnings for the to-be-reported quarter. Yum! Brands’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 0.5%.

Brinker International, Inc. EAT currently has an Earnings ESP of +0.93% and a Zacks Rank of 3.
 
In the to-be-reported quarter, Brinker’s earnings are expected to increase 50.9% year over year. Brinker’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 24.5%.

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This article originally published on Zacks Investment Research (zacks.com).

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