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Beacon Roofing (BECN) Q4 Earnings & Sales Beat, Shares Fall
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Beacon Roofing Supply, Inc. (BECN - Free Report) reported better-than-expected results for fourth-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
BECN reported net sales growth for the trailing 12 quarters, highlighting the resiliency of its business model. This is driven by diligent pricing execution, productivity, and improvements from the bottom quintile branch initiative.
In 2023, it acquired 21 branches and opened 28 greenfield locations in key markets, enhancing customer reach and service.
Shares of the company lost 3.3% in the after-hour trading session on Feb 27.
Earnings & Revenue Discussion
This distributor of building products reported adjusted earnings per share of $1.72, which topped the consensus mark of $1.69 by 1.8% and increased 41% from the year-ago adjusted level of $1.22 per share.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Net sales of $2.3 billion also topped the consensus mark of $2.28 billion by 1%. The top line increased 16.8% on a year-over-year basis, driven by organic volume growth, including greenfields, over the last four quarters.
Estimated organic volumes (including greenfields) and weighted-average selling price contributed approximately 12-13% and 0-1%, respectively, and acquired branches added more than 4% to net sales.
Sales According to Line of Business
Residential Roofing Product: In the reported quarter, sales of this product line (comprising 50.6% of quarterly net sales) were $1.16 billion, up 20.2% from the year-ago quarter. The upside was primarily driven by higher volumes.
Non-Residential Roofing Product: Sales (comprising 27.2% of the quarterly net sales) rose 11.4% from the year-ago quarter to $626.7 million owing to strong underlying market demand.
Complementary Product: In the fourth quarter, sales of this product line (comprising 22.2% of quarterly net sales) increased 16% year over year to $510 million. The upside was primarily driven by the acquisition of Coastal Construction Products.
Operating Highlights
The gross margin of 25.7% was down 50 basis points (bps) year over year due to higher product costs, majorly offset by higher average selling prices of the company’s products.
Adjusted EBITDA increased 21.4% on a year-over-year basis to $216.7 million, driven by higher net sales and operating leverage. Adjusted EBITDA margin expanded 30 bps year over year to 9.4%. This marked the highest adjusted EBITDA in the company’s history.
2023 Highlights
The company reported net sales of $9.12 billion, which increased 8.2% on a year-over-year basis, driven by the contributions of acquired branches and greenfields. Residential roofing product sales increased 10.3%, and complementary product sales rose 18.6% compared with the prior year, but non-residential roofing product sales decreased 2.7% year over year.
The company reported adjusted income of $111.2 million, up from $93.2 million reported in 2022. Also, it generated adjusted EPS of $7.97 on 64.8 million diluted weighted-average common stock outstanding.
The gross margin of 25.7% was down 80 bps year over year. Adjusted EBITDA was $929.6 million compared with $910 million reported in the prior-year quarter. Adjusted EBITDA margin contracted 60 bps year over year to 10.2%.
Other Financial Details
As of Dec 31, 2023, the company had cash and cash equivalents of $84 million compared with $67.7 million at 2022-end. Long-term debt, net was $2.19 billion, up from the 2022-end value of $1.61 billion.
Net cash provided by operating activities was $787.8 million in 2023 compared with $401.1 million in the prior year.
As of 2023-end, BECN had $389.1 million available for repurchases remaining under the current Repurchase Program.
Guidance
For the first quarter of 2024, the company anticipates net sales to be up in the high single digits from the year-ago period. Gross margin is expected to be approximately 24.5% versus 25.5% a year ago. In January 2024, net sales per day were down nearly 4% year over year.
For 2024, net sales growth is anticipated to be in the mid-single digit year over year. Gross margin is expected to be in the mid-25% range. Adjusted EBITDA is expected to be in the range of $920-$980 million.
Residential shipments are likely to be down in 2024 on lower expected storm demand, partially offset by higher non-storm repair & re-reroofing. Single-family starts and new construction activity are expected to improve this year, and existing home sales are anticipated to recover from a low point. Non-residential market demand is expected to remain soft in 2024.
Continuous investments in greenfield locations are expected to yield 25 new locations in 2024.
Builders FirstSource, Inc. (BLDR - Free Report) reported impressive earnings in fourth-quarter 2023. The bottom line surpassed the Zacks Consensus Estimate and improved from the previous year. Despite a challenging operating environment in 2023, where single-family starts witnessed significant reduction, the company delivered mid-teens or better adjusted EBITDA margin for 11 consecutive quarters.
Net sales surpassed the consensus mark but declined year over year due to a slowdown in residential construction demand, particularly in the Single-Family market.
Jack in the Box Inc. (JACK - Free Report) reported mixed first-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line declined from the prior-year quarter’s levels.
During the fiscal first quarter, adjusted earnings from continuing operations came in at $1.95 per share. The figure was in line with the Zacks Consensus Estimate. The metric declined 3% from $2.01 reported in the prior-year quarter. Quarterly revenues of $487.5 million beat the Zacks Consensus Estimate of $480 million by 1.5%. However, the top line declined 7.5% on a year-over-year basis. The downside was caused by Del Taco’s refranchising efforts.
Shake Shack Inc. (SHAK - Free Report) reported fourth-quarter fiscal 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Moreover, both metrics increased year over year. The bottom line beat the consensus estimate for the fifth straight quarter.
The company’s earnings reflect growth in sales driven by digital marketing strategies and sequentially improving traffic. It also intends to continue focusing on its global footprint expansion plans for the upcoming period.
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Beacon Roofing (BECN) Q4 Earnings & Sales Beat, Shares Fall
Beacon Roofing Supply, Inc. (BECN - Free Report) reported better-than-expected results for fourth-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
BECN reported net sales growth for the trailing 12 quarters, highlighting the resiliency of its business model. This is driven by diligent pricing execution, productivity, and improvements from the bottom quintile branch initiative.
In 2023, it acquired 21 branches and opened 28 greenfield locations in key markets, enhancing customer reach and service.
Shares of the company lost 3.3% in the after-hour trading session on Feb 27.
Earnings & Revenue Discussion
This distributor of building products reported adjusted earnings per share of $1.72, which topped the consensus mark of $1.69 by 1.8% and increased 41% from the year-ago adjusted level of $1.22 per share.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Beacon Roofing Supply, Inc. price-consensus-eps-surprise-chart | Beacon Roofing Supply, Inc. Quote
Net sales of $2.3 billion also topped the consensus mark of $2.28 billion by 1%. The top line increased 16.8% on a year-over-year basis, driven by organic volume growth, including greenfields, over the last four quarters.
Estimated organic volumes (including greenfields) and weighted-average selling price contributed approximately 12-13% and 0-1%, respectively, and acquired branches added more than 4% to net sales.
Sales According to Line of Business
Residential Roofing Product: In the reported quarter, sales of this product line (comprising 50.6% of quarterly net sales) were $1.16 billion, up 20.2% from the year-ago quarter. The upside was primarily driven by higher volumes.
Non-Residential Roofing Product: Sales (comprising 27.2% of the quarterly net sales) rose 11.4% from the year-ago quarter to $626.7 million owing to strong underlying market demand.
Complementary Product: In the fourth quarter, sales of this product line (comprising 22.2% of quarterly net sales) increased 16% year over year to $510 million. The upside was primarily driven by the acquisition of Coastal Construction Products.
Operating Highlights
The gross margin of 25.7% was down 50 basis points (bps) year over year due to higher product costs, majorly offset by higher average selling prices of the company’s products.
Adjusted EBITDA increased 21.4% on a year-over-year basis to $216.7 million, driven by higher net sales and operating leverage. Adjusted EBITDA margin expanded 30 bps year over year to 9.4%. This marked the highest adjusted EBITDA in the company’s history.
2023 Highlights
The company reported net sales of $9.12 billion, which increased 8.2% on a year-over-year basis, driven by the contributions of acquired branches and greenfields. Residential roofing product sales increased 10.3%, and complementary product sales rose 18.6% compared with the prior year, but non-residential roofing product sales decreased 2.7% year over year.
The company reported adjusted income of $111.2 million, up from $93.2 million reported in 2022. Also, it generated adjusted EPS of $7.97 on 64.8 million diluted weighted-average common stock outstanding.
The gross margin of 25.7% was down 80 bps year over year. Adjusted EBITDA was $929.6 million compared with $910 million reported in the prior-year quarter. Adjusted EBITDA margin contracted 60 bps year over year to 10.2%.
Other Financial Details
As of Dec 31, 2023, the company had cash and cash equivalents of $84 million compared with $67.7 million at 2022-end. Long-term debt, net was $2.19 billion, up from the 2022-end value of $1.61 billion.
Net cash provided by operating activities was $787.8 million in 2023 compared with $401.1 million in the prior year.
As of 2023-end, BECN had $389.1 million available for repurchases remaining under the current Repurchase Program.
Guidance
For the first quarter of 2024, the company anticipates net sales to be up in the high single digits from the year-ago period. Gross margin is expected to be approximately 24.5% versus 25.5% a year ago. In January 2024, net sales per day were down nearly 4% year over year.
For 2024, net sales growth is anticipated to be in the mid-single digit year over year. Gross margin is expected to be in the mid-25% range. Adjusted EBITDA is expected to be in the range of $920-$980 million.
Residential shipments are likely to be down in 2024 on lower expected storm demand, partially offset by higher non-storm repair & re-reroofing. Single-family starts and new construction activity are expected to improve this year, and existing home sales are anticipated to recover from a low point. Non-residential market demand is expected to remain soft in 2024.
Continuous investments in greenfield locations are expected to yield 25 new locations in 2024.
Zacks Rank & Peer Release
Beacon Roofing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Builders FirstSource, Inc. (BLDR - Free Report) reported impressive earnings in fourth-quarter 2023. The bottom line surpassed the Zacks Consensus Estimate and improved from the previous year. Despite a challenging operating environment in 2023, where single-family starts witnessed significant reduction, the company delivered mid-teens or better adjusted EBITDA margin for 11 consecutive quarters.
Net sales surpassed the consensus mark but declined year over year due to a slowdown in residential construction demand, particularly in the Single-Family market.
Jack in the Box Inc. (JACK - Free Report) reported mixed first-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line declined from the prior-year quarter’s levels.
During the fiscal first quarter, adjusted earnings from continuing operations came in at $1.95 per share. The figure was in line with the Zacks Consensus Estimate. The metric declined 3% from $2.01 reported in the prior-year quarter. Quarterly revenues of $487.5 million beat the Zacks Consensus Estimate of $480 million by 1.5%. However, the top line declined 7.5% on a year-over-year basis. The downside was caused by Del Taco’s refranchising efforts.
Shake Shack Inc. (SHAK - Free Report) reported fourth-quarter fiscal 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Moreover, both metrics increased year over year. The bottom line beat the consensus estimate for the fifth straight quarter.
The company’s earnings reflect growth in sales driven by digital marketing strategies and sequentially improving traffic. It also intends to continue focusing on its global footprint expansion plans for the upcoming period.