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GMS' Q4 Earnings & Net Sales Lag Estimates, Margins Down Y/Y
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GMS Inc. (GMS - Free Report) reported tepid results for fourth-quarter fiscal 2024 (ended Apr 30, 2024). Both earnings and net sales missed the Zacks Consensus Estimate. Earnings declined on a year-over-year basis. Nonetheless, net sales grew from the prior-year period.
Shares of the company lost 6.1% on Jun 20, post-earnings release.
The company expects Wallboard and Steel margins-related headwinds to improve from the second quarter. An improving single-family end market will likely offset declining multi-family and commercial demand in fiscal 2025. With the typical three-to-six-month lag in the realization of Wallboard price increases, GMS expects to see benefits of the previously announced pricing actions later this summer. Also, it anticipates recent Steel manufacturer price increases to stabilize pricing for that product category post the first quarter of fiscal 2025.
Quarter in Detail
GMS reported adjusted earnings per share (EPS) of $1.93, which missed the consensus mark of $2.04 million by 5.4% and declined 8.5% from the year-ago quarter’s $2.11.
Net sales of $1.41 billion lagged the consensus mark of $1.42 million by 0.4% but increased 8.4% year over year. Organic net sales rose 4% from the prior year. Volume growth across the major product lines was partially offset by steel price deflation. On a per-day basis, net sales were up 6.7% year over year (2.4% organically).
Segment Discussion
Wallboard sales inched up 7.6% from a year ago to $586.1 million. Organically, sales were up 6% year over year.
Ceilings sales increased 21.7% year over year to $188.9 million in the quarter. Organically, this segment’s sales rose 11.4% from the year-ago quarter.
Steel Framing sales of $220.5 million fell 1.5% from the prior-year quarter. Organically, the segment’s sales declined 5.1% from the year-ago figure.
Complementary Product sales grew 9.8% from the prior-year period to $417.6 million. Organically, sales rose 3.5% from the year-ago period.
Operating Highlights
Gross profit increased 6.3% from the year-ago period, mainly due to the favorable impact of the company’s recent acquisitions and improved volumes. Gross margin contracted 60 bps to 31.9% year over year.
Adjusted selling, general and administrative expenses — as a percentage of net sales — grew 90 basis points (bps) to 21.8% for the quarter.
Adjusted EBITDA of $146.6 million decreased 5% from a year ago. Adjusted EBITDA margin of 10.4% contracted 140 bps from 11.8% a year ago.
Fiscal 2024 Highlights
GMS’ adjusted EPS of $8.25 declined 11.2% from the year-ago period of $9.29. Net sales of $5.5 billion increased 3.2% year over year. Organic net sales grew 0.3% year over year.
Financials
As of Apr 30, 2024, the company had cash and cash equivalents of $166.1 million, up from $164.7 million at the fiscal 2023-end, and $655.9 million of available liquidity under its revolving credit facilities. Long-term debt (less current portion) amounted to $1.23 billion at the fiscal 2024-end, up from $1.04 billion at the fiscal 2023-end.
Cash provided by operating activities was $433.2 million in fiscal 2024 versus $441.7 million a year ago. Free cash flow was $376 million in fiscal 2024 compared with $389.1 million in fiscal 2023.
During fiscal 2024, GMS repurchased 1.7 million shares of common stock for $115.6 million at an average cost per share of $67.93.
Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) posted mixed third-quarter fiscal 2024 results. Earnings beat the Zacks Consensus Estimate and revenues missed the same. The top and bottom lines declined from the prior-year quarter’s figure.
While traffic was lower than expected, the company aggressively managed day-to-day operations, showing resilience in the face of financial impacts from reduced traffic. During the quarter, the company reported significant improvements in several key operational metrics.
Williams-Sonoma Inc. (WSM - Free Report) registered decent results in first-quarter fiscal 2024 (ended Apr 28, 2024). In the quarter, earnings and net revenues beat the Zacks Consensus Estimate. On a year-over-year basis, the top line declined, but the bottom line increased.
Non-GAAP EPS of $4.07 surpassed the Zacks Consensus Estimate of $2.78 by 46.4%. Also, the metric increased 54.2% from $2.64 reported a year ago.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) reported tepid first-quarter fiscal 2024 results, with both earnings and revenues missing their respective Zacks Consensus Estimate. Both metrics declined on a year-over-year basis.
The company reported tougher year-over-year comparisons in January and February, exacerbated by challenging weather conditions. Sales during this period remained uneven, owing to economic difficulties in the lower-income demographics. The condensed and shorter spring break period further affected results, limiting the usual extended period for increased activities.
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GMS' Q4 Earnings & Net Sales Lag Estimates, Margins Down Y/Y
GMS Inc. (GMS - Free Report) reported tepid results for fourth-quarter fiscal 2024 (ended Apr 30, 2024). Both earnings and net sales missed the Zacks Consensus Estimate. Earnings declined on a year-over-year basis. Nonetheless, net sales grew from the prior-year period.
Shares of the company lost 6.1% on Jun 20, post-earnings release.
The company expects Wallboard and Steel margins-related headwinds to improve from the second quarter. An improving single-family end market will likely offset declining multi-family and commercial demand in fiscal 2025. With the typical three-to-six-month lag in the realization of Wallboard price increases, GMS expects to see benefits of the previously announced pricing actions later this summer. Also, it anticipates recent Steel manufacturer price increases to stabilize pricing for that product category post the first quarter of fiscal 2025.
Quarter in Detail
GMS reported adjusted earnings per share (EPS) of $1.93, which missed the consensus mark of $2.04 million by 5.4% and declined 8.5% from the year-ago quarter’s $2.11.
GMS Inc. Price, Consensus and EPS Surprise
GMS Inc. price-consensus-eps-surprise-chart | GMS Inc. Quote
Net sales of $1.41 billion lagged the consensus mark of $1.42 million by 0.4% but increased 8.4% year over year. Organic net sales rose 4% from the prior year. Volume growth across the major product lines was partially offset by steel price deflation. On a per-day basis, net sales were up 6.7% year over year (2.4% organically).
Segment Discussion
Wallboard sales inched up 7.6% from a year ago to $586.1 million. Organically, sales were up 6% year over year.
Ceilings sales increased 21.7% year over year to $188.9 million in the quarter. Organically, this segment’s sales rose 11.4% from the year-ago quarter.
Steel Framing sales of $220.5 million fell 1.5% from the prior-year quarter. Organically, the segment’s sales declined 5.1% from the year-ago figure.
Complementary Product sales grew 9.8% from the prior-year period to $417.6 million. Organically, sales rose 3.5% from the year-ago period.
Operating Highlights
Gross profit increased 6.3% from the year-ago period, mainly due to the favorable impact of the company’s recent acquisitions and improved volumes. Gross margin contracted 60 bps to 31.9% year over year.
Adjusted selling, general and administrative expenses — as a percentage of net sales — grew 90 basis points (bps) to 21.8% for the quarter.
Adjusted EBITDA of $146.6 million decreased 5% from a year ago. Adjusted EBITDA margin of 10.4% contracted 140 bps from 11.8% a year ago.
Fiscal 2024 Highlights
GMS’ adjusted EPS of $8.25 declined 11.2% from the year-ago period of $9.29. Net sales of $5.5 billion increased 3.2% year over year. Organic net sales grew 0.3% year over year.
Financials
As of Apr 30, 2024, the company had cash and cash equivalents of $166.1 million, up from $164.7 million at the fiscal 2023-end, and $655.9 million of available liquidity under its revolving credit facilities. Long-term debt (less current portion) amounted to $1.23 billion at the fiscal 2024-end, up from $1.04 billion at the fiscal 2023-end.
Cash provided by operating activities was $433.2 million in fiscal 2024 versus $441.7 million a year ago. Free cash flow was $376 million in fiscal 2024 compared with $389.1 million in fiscal 2023.
During fiscal 2024, GMS repurchased 1.7 million shares of common stock for $115.6 million at an average cost per share of $67.93.
Zacks Rank & Recent Releases
GMS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) posted mixed third-quarter fiscal 2024 results. Earnings beat the Zacks Consensus Estimate and revenues missed the same. The top and bottom lines declined from the prior-year quarter’s figure.
While traffic was lower than expected, the company aggressively managed day-to-day operations, showing resilience in the face of financial impacts from reduced traffic. During the quarter, the company reported significant improvements in several key operational metrics.
Williams-Sonoma Inc. (WSM - Free Report) registered decent results in first-quarter fiscal 2024 (ended Apr 28, 2024). In the quarter, earnings and net revenues beat the Zacks Consensus Estimate. On a year-over-year basis, the top line declined, but the bottom line increased.
Non-GAAP EPS of $4.07 surpassed the Zacks Consensus Estimate of $2.78 by 46.4%. Also, the metric increased 54.2% from $2.64 reported a year ago.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) reported tepid first-quarter fiscal 2024 results, with both earnings and revenues missing their respective Zacks Consensus Estimate. Both metrics declined on a year-over-year basis.
The company reported tougher year-over-year comparisons in January and February, exacerbated by challenging weather conditions. Sales during this period remained uneven, owing to economic difficulties in the lower-income demographics. The condensed and shorter spring break period further affected results, limiting the usual extended period for increased activities.