Reasons Why You Should Avoid Betting on Griffon Stock Right Now

Griffon Corporation GFF failed to impress investors with its recent operational performance due to weakness in the Consumer and Professional Products (CPP) segment, increased selling, general and administrative expenses and a high debt level. Also, foreign currency headwind is an added uncertainty.

GFF currently carries a Zacks Rank #5 (Strong Sell). In the past year, the stock has lost 4.5% compared with the industry’s 4.3% decline.

Let’s discuss the factors that are likely to continue taking a toll on this company.

Business Weakness: Softness in the CPP segment raises concerns for Griffon. Reduced consumer demand across most regions, except Australia, has been weighing on the segment’s performance. Increased tariffs imposed by the U.S. administration have disrupted customer orders, which is also troubling for the segment. Demand for products in the Hunter Fan business has been particularly weak. The CPP segment’s revenues declined 8% year over year in the fourth quarter of fiscal 2025 (ended September 2025).

Rising Expenses: Griffon has been dealing with the negative impact of high operating costs and expenses. In the fiscal fourth quarter, its selling, general and administrative expenses recorded a year-over-year increase of 3.6% due to higher restructuring charges and strategic review (retention and other) expenses. As a percentage of sales, it increased 70 basis points to 23.7% in the fiscal fourth quarter. High operating expenses may affect margins and profitability in fiscal 2026 (ending September 2026).

High Debt Level: High debt levels are concerning for Griffon as they raise financial obligations and may drain its profitability. The company’s long-term debt, net in the last five years (fiscal 2021-2025), increased 8% (CAGR). GFF exited the fiscal fourth quarter with a long-term debt of $1.40 billion. The company’s current liabilities were at $334.6 million, higher than the cash equivalents of $99 million. This implies that it does not have sufficient cash to meet its short-term debt obligations.

Forex Woes: Griffon operates across diverse regions (the United States, Europe, Canada and Australia), which exposes it to certain political, environmental and geopolitical issues. Moreover, it remains vulnerable to currency translation risks, which may affect its performance in the quarters ahead. A stronger U.S. dollar may depress the company's overseas business results in the near term.

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

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