GMS shares slide 5% as Q1 results disappoint

NEW YORK - GMS Inc . (NYSE:GMS ) reported first quarter fiscal 2025 results that fell short of analyst estimates, sending shares down 5% in early trading Thursday.

The specialty building products distributor posted adjusted earnings per share of $1.93, missing the consensus forecast of $2.14. Revenue rose 2.8% year-over-year to $1.45 billion but came in below expectations of $1.48 billion.

GMS saw volume growth across all major product categories, including a 4.1% increase in U.S. single-family wallboard organic volume. However, this was offset by a 2.3% decline in multi-family and flat commercial demand.

"We realized volume growth and improved or resilient pricing in most of our major product lines. Nevertheless, steel price deflation partially offset these results, and economic tightening resulted in weaker than expected activity levels across all of our end markets for the quarter, notably in commercial and multi-family, particularly in July," said CEO John C. Turner, Jr.

Gross margin contracted 80 basis points to 31.2% due to mix impacts from steel price deflation and a shift toward single-family wallboard deliveries. Adjusted EBITDA fell 15.8% to $145.9 million.

Looking ahead, Turner said market pressures will likely persist over the next several quarters. The company is implementing a $25 million annualized cost reduction program in response.

GMS also announced the acquisition of R.S. Elliott Specialty Supply, a Florida-based distributor of stucco and other exterior finishing products, for an undisclosed sum.

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Source: Investing.com