Shares of Builders FirstSource, Inc.(NYSE:BLDR) are trading lower premarket on Thursday after reporting first-quarter FY25 earnings results.
The company reported a sales decline of 6.0% year-on-year (Y/Y) to $3.66 billion, which is in line with the consensus.
The decrease in sales was primarily due to lower core organic sales, fewer selling days, and commodity deflation.
Core organic net sales decreased by 8.1% (Y/Y), with a decline of 32.7% in Multi-Family and 5.9% in Single-Family. Meanwhile, Repair and Remodel/Other (R&R) rose 3.6% Y/Y.
Selling, general and administrative expenses increased by 0.5% Y/Y. Gross profit fell 14.2% Y/Y, while the margin contracted 290 basis points to 30.5% in the quarter.
Adjusted EBITDA decreased 31.7% Y/Y to $369.2 million and the margin contracted 380 basis points Y/Y to 10.1%. Adjusted EPS of $1.51 beat the consensus estimate of $1.37.
Operating cash flow declined by $184.9 million to $132.3 million, and free cash flow was $45.0 million.
In the first quarter, Builders achieved around $17 million in productivity savings from operational excellence and supply chain efforts.
Buyback: In the first quarter, the company repurchased 0.1 million shares of its common stock at an average price of $131.51 per share for $12.8 million.
Along with the earnings, Builders FirstSource authorized the repurchase of up to $500 million of common shares, which includes around $100 million remaining under its prior August 2024 authorization.
Outlook: Builders FirstSource lowered its FY25 sales guidance to $16.05 billion-$17.05 billion (from $16.5 billion to $17.5 billion prior), vs. the analyst estimate of $16.68 billion.
The company expects Single-Family “starts” to be down mid-single digits, Multi-Family starts down mid-teens, and R&R to be flat in FY25.
It anticipates one fewer selling day to decrease net sales by 0.4% in 2025.
The company anticipates delivering $70 million to $90 million in productivity savings for 2025.
Investors can gain exposure to the stock via Themes US Small Cap Cash Flow Champions ETF (NASDAQ:SMCF) and The Acquirers Fund (NYSE:ZIG)
Price Action: BLDR shares are down 3.08% at $115.95 premarket at the last check Thursday.
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