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Builders FirstSource, Inc. BLDR has reported mixed results for the first quarter of 2025, with earnings surpassing the Zacks Consensus Estimate but net sales missing the same.
Both metrics declined year over year, owing to lower core organic sales and commodity deflation, partially offset by growth from acquisitions. Margins also declined due to ongoing Single-Family and Multi-Family margin normalization.
Shares of this manufacturer and supplier of building materials moved down 3.9% in today’s pre-market trading session.
Nonetheless, the company remained resilient in a challenging environment. The performance in the first quarter reflected the strength of its product portfolio and focus on operations. The company continued to manage well despite ongoing macro and industry uncertainties. Efforts remained directed toward supporting customers with affordability challenges and improving efficiency. It also continued to prepare for long-term growth.
The company reported adjusted earnings per share of $1.51, which surpassed the consensus mark of $1.50 by 0.7%. However, the reported figure decreased 43% from the year-ago quarter, owing to lower adjusted net income, partially offset by share repurchases. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Builders FirstSource, Inc. price-consensus-eps-surprise-chart | Builders FirstSource, Inc. Quote
Net sales of $3.66 billion missed the consensus mark of $3.69 billion by 0.8% and fell 6% on a year-over-year basis. Core organic sales declined 8.1% from the prior-year quarter. A commodity price deflation of 1% of net sales and softness in Multi-Family were partially offset by 4.7% growth from acquisitions.
Core organic growth in Single-Family and Multi-Family decreased 5.9% and 32.7%, respectively. In Repair and Remodel (R&R)/Other, the metric increased 3.6%. Net sales in Multi-Family and Single-Family lowered 4.6% and 4.2%, respectively, while in R&R/Other rose 0.7%.
Value-Added Product Sales: For the reported quarter, sales of value-added products (comprising 48.4% of the quarterly net sales) were $1.77 billion, down 12% from the prior year. Within the segment, Manufactured products totaled $846.3 million and Windows, doors & millwork was $922.8 million, down 13.6% and 10.4%, respectively, from a year ago.
Specialized Product & Other: Gypsum, Roofing & Insulation products sales (comprising 25% of the quarterly net sales) increased 1.2% from the year-ago quarter to $914 million.
Lumber & Lumber Sheet Goods: For the quarter, segment sales (comprising 26.6% of the quarterly net sales) decreased 0.5% year over year to $974.4 million.
Gross margin of 30.5% contracted 290 basis points (bps) due to Single-Family and Multi-Family margin normalization, along with a below-normal starts environment. As a percentage of net sales, adjusted SG&A expenses increased 160 bps to 25.4%.
Adjusted EBITDA fell 31.7% on a year-over-year basis to $369.2 million. Adjusted EBITDA margin also contracted 380 bps year over year to 10.1%, owing to lower gross profit margins and operating leverage.
BLDR delivered approximately $17 million in productivity savings, related to operational excellence and supply-chain initiatives.
As of March 31, 2025, Builders FirstSource had cash and cash equivalents of $115.4 million, down from $153.6 million at 2024-end. The company had liquidity of $1.1 billion at March-end, including $944 million in net borrowing available under the revolving credit facility.
Long-term debt, net of current portion, discounts and issuance costs, was $4.5 billion, up from $3.7 billion at 2024-end. As of the first-quarter end, the net debt to trailing 12-month adjusted EBITDA ratio was 2.0x compared with 1.1x in the prior year.
Net cash from operations was $132.3 million compared with $317.2 million a year ago. Free cash flow was $$45 million in the first quarter.
BLDR repurchased 0.1 million shares of its common stock at an average price of $131.51 per share for $12.8 million. Additionally, in April 2025, the company repurchased 3.3 million shares at an average price of $118.27 per share, amounting to $390.9 million, including fees and taxes.
On April 30, 2025, the board approved a new repurchase authorization of up to $500 million. This includes around $100 million remaining under the earlier $1 billion program announced in August 2024.
For 2025, BLDR now expects net sales between $16.05 billion and $17.05 billion compared with $16.5-$17.5 billion expected earlier. The estimated figure is up from $16.4 billion reported in 2024. Acquisitions completed within the last 12 months are now projected to contribute 5% to 5.5% in net sales growth compared with 4-4.5% projected earlier. However, a fewer selling day in 2025 is expected to reduce net sales by 0.4%
Geographically, Single-Family starts are now expected to be down mid-single digits. Multi-Family starts are expected to be down mid-teens and R&R activity is anticipated to remain flat compared with the previous year. Earlier, the company had expected Single-Family starts to be flat (down low-single digits to up low-single digits) and R&R to be up in the low-single digits, but Multi-Family starts were expected to be down mid-teens.
Gross margin is now likely to be in the range of 29-31% compared with 30-32% expected earlier. The projection was down from 32.8% generated in 2024.
Adjusted EBITDA is now expected to be between $1.7 billion and $2.1 billion (earlier projection was $1.9-$2.3 billion), down from $2.3 billion reported in 2024. Adjusted EBITDA margin is expected to be in the range of 10.6-12.3% compared with 14.2% in the prior year. The earlier expectation was 11.5-13%. The company expects to deliver $70-$90 million in productivity savings in 2025.
Free cash flow is now expected between $800 million and $1.2 billion, assuming average commodity prices in the range of $400-$440 per thousand board feet. The company had expected free cash flow to be between $600 million and $1 billion earlier, assuming average commodity prices in the range of $380-$430 per thousand board feet.
BLDR now expects interest expense in the range of $260-$280 million (compared with an earlier projection of $250-$270 million), an effective tax rate of 23-25% and total capital expenditures within $350-$425 million (compared with an earlier projection of $350-$450 million). Depreciation and amortization expenses are still estimated to be between $550 million and $600 million.
Builders FirstSource currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fastenal Company’s FAST first-quarter 2025 adjusted earnings were in line with the Zacks Consensus Estimate and on par year over year. On the other hand, net sales surpassed the consensus mark and grew year over year.
The top-line growth was attributable to improved customer contract signings over the past 12 months, which were partially offset by sluggish underlying business activity. The bottom line was adversely impacted by higher fleet and transportation costs, along with increased labor costs.
Chipotle Mexican Grill, Inc. CMG reported mixed first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Chipotle's first-quarter results were affected by various headwinds, including unfavorable weather conditions and reduced consumer spending. Along with expanding its brand presence both domestically and internationally, Chipotle has made notable strides in enhancing restaurant operations, advancing back-of-house innovations.
Dave & Buster's Entertainment, Inc. PLAY posted fourth-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Both metrics declined on a year-over-year basis.
Dave & Buster’s reported a weak fourth quarter but expressed confidence in its direction as recent trends show signs of improvement. The current leadership team is undoing several decisions made by prior management in marketing, operations and capital spending, and is returning to a more disciplined, fundamentals-driven strategy.
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This article originally published on Zacks Investment Research (zacks.com).
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