Griffon's Earnings Meet Estimates in Q3, Revenues Decrease 5% Y/Y

Griffon Corporation GFF reported third-quarter fiscal 2025 (ended June 2025) adjusted earnings of $1.50 per share, which came in line with the Zacks Consensus Estimate. The bottom line increased 21% year over year.

Total revenues of $613.6 million missed the consensus estimate of $660 million and decreased 5% year over year.

GFF’s Segmental Details

Home and Building Products: Revenues from the Home and Building Products segment (representing 65.2% of net revenues) were $400.2 million, reflecting an increase of 2% year over year. The segment’s results reflected favorable price and mix of 3%, partially offset by lower residential volume of 1%.

Adjusted EBITDA was $128.8 million, reflecting an increase of 9% year over year. The results benefited from higher volume and reduced material costs, partially offset by higher labor costs.

Consumer and Professional Products: The segment’s revenues (34.8%) totaled $213.4 million, down 16% year over year. The results were hurt by a 19% volume reduction due to market weakness across all regions other than Australia. The Pope acquisition contributed 1%, while price and mix had a positive impact of 2% on revenues.

Adjusted EBITDA decreased 14% to $19.2 million from the prior-year quarter. The decrease was primarily attributable to lower revenues, partially offset by benefits from the global sourcing expansion initiative and reduced administrative costs.

Griffon Corporation Price, Consensus and EPS Surprise

Griffon Corporation price-consensus-eps-surprise-chart | Griffon Corporation Quote

Margin Profile

Griffon’s cost of sales decreased 12.6% year over year to $348.4 million. Selling, general and administrative expenses were down 7.5% year over year to $147.6 million. The adjusted gross margin increased to 43.2% from 40.9% in the year-ago period.

Adjusted net income came at $69.2 million compared with $60.5 million in the prior-year quarter.

GFF’s Balance Sheet & Cash Flow

At the end of the fiscal third quarter, Griffon had cash and cash equivalents of $107.3 million compared with $114.4 million at the end of fiscal 2024 (ended September 2024). Long-term debt, net of current maturities, was $1.44 billion at the end of the fiscal third quarter compared with $1.52 billion at fiscal 2024-end.

In the first nine months of fiscal 2025, the company generated net cash of $282.5 million from operating activities compared with $307.9 million in the year-ago period.

Griffon paid out dividends of $31.6 million and repurchased shares worth $113 million in the same period. Exiting the fiscal third quarter, it had $319.6 million remaining under the share repurchase program.

Free cash flow was $260.5 million in the first nine months of fiscal 2025 compared with $273.7 million cash flow in the prior-year period.

Outlook

For fiscal 2025, management anticipates net sales to be $2.5 billion, compared with $2.6 billion projected earlier.

It expects the segment adjusted EBITDA to be in the band of $575-$600 million. While it anticipates the Home and Building Products segment margin in excess of 31%, the EBITDA margin for the Consumer and Professional Products segment is projected to be about 8%.

For the fiscal year, Griffon expects interest expense of $95 million and capital expenditures to be $60 million.

Zacks Rank & Key Picks

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks from the same space are discussed below:

Federal Signal Corporation FSS currently sports a Zacks Rank of 1. FSS has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 5.7%.  In the past 60 days, the Zacks Consensus Estimate for Federal Signal’s 2025 earnings has increased 4.2%.

ITT Inc. ITT currently carries a Zacks Rank #2 (Buy). ITT has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 1.5%.  In the past 60 days, the Zacks Consensus Estimate for ITT’s 2025 earnings has increased 1.7%.

RBC Bearings Incorporated RBC currently carries a Zacks Rank of 2. RBC outperformed the consensus estimate thrice in the preceding four quarters and missed once, with an average surprise of 3.8%. In the past 60 days, the Zacks Consensus Estimate for RBC Bearings’ 2025 earnings has increased 1.4%.

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

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