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Oct 31, 2023
GMS Q2 2024 Earnings Report
Delivered solid results with net sales, net income, and Adjusted EBITDA exceeding expectations due to strong commercial and multi-family activity.
Key Takeaways
GMS Inc. reported solid results for Q2 2024, with net sales of $1.4 billion. Strong commercial and multi-family activity offset a steeper than anticipated steel pricing decline and reduced single-family demand. Net income decreased to $81.0 million, or $1.97 per diluted share, while Adjusted EBITDA decreased to $167.6 million.
Net sales decreased 0.7% to $1.4 billion compared to the prior year quarter.
Commercial and multi-family construction drove volume increases in Ceilings, Steel Framing and Complementary Products.
Gross profit decreased $5.9 million, or 1.3%, compared to the second quarter of fiscal 2023 due to deflationary dynamics in steel pricing.
Net income decreased 21.5% to $81.0 million, or $1.97 per diluted share.
Forward Guidance
The company anticipates continued growth in the multi-family end market through the end of fiscal 2024, expects commercial demand to continue at its current pace, and is optimistic about improving single-family activity.
Positive Outlook
- Backlog in multi-family construction to drive continued growth through the end of fiscal 2024.
- Commercial demand is expected to continue its current pace of activity over the next few quarters.
- Easing of mortgage rates may improve single-family activity.
- Limited supply of existing homes for sale may improve single-family activity.
- Favorable demographics seem to be setting up improved conditions for single-family activity, particularly as we look out to fiscal 2025.
Challenges Ahead
- Multi-family growth is expected to occur at declining year-over-year rates.
- Potential headwinds from tightened credit conditions may impact commercial demand.
- Single-family demand is comparatively reduced versus the prior year.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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