MasterBrand Q1 2025 Earnings Report
Key Takeaways
MasterBrand, the largest residential cabinet manufacturer in North America, reported mixed results for the first quarter of 2025. While net sales increased by 3% year-over-year, driven by the Supreme acquisition, the company experienced a substantial decrease in net income and adjusted EBITDA, attributed to weaker end market demand, higher expenses from the acquisition, and unfavorable fixed cost leverage. The company also updated its full-year 2025 financial outlook, anticipating a low single-digit decrease in net sales.
Net sales increased 3% year-over-year to $660.3 million, primarily due to the Supreme acquisition.
Net income decreased 65% year-over-year to $13.3 million, largely due to higher SG&A, interest expense, restructuring costs, and intangible asset amortization from the Supreme acquisition.
Adjusted EBITDA decreased to $67.1 million from $79.4 million in the prior year period, resulting in a 220 basis point decrease in adjusted EBITDA margin.
Diluted EPS was $0.10, down from $0.29 in the prior year, while adjusted diluted EPS was $0.18 compared to $0.31.
MasterBrand
MasterBrand
Forward Guidance
For the full year 2025, MasterBrand anticipates a low single-digit percentage decrease in net sales and provides guidance for adjusted EBITDA in the range of $315 million to $365 million, with a corresponding adjusted EBITDA margin of roughly 12.0% to 13.5%. Adjusted diluted earnings per share are expected to be in the range of $1.03 to $1.32.
Positive Outlook
- Expects organic net sales performance to outperform the underlying market.
- New products and channel specific offerings are expected to gain traction.
- Previously implemented price actions are expected to gain traction.
- Remains focused on preserving margins through various cost actions.
- Facility and resource rightsizing and swift tariff remediation are planned.
Challenges Ahead
- Anticipates a low single-digit percentage decrease in net sales year-over-year.
- Expects a mid single-digit percentage decrease in organic net sales.
- Revised guidance reflects the negative impact of general economic uncertainty on end market demand.
- Revised guidance reflects the net impact of enacted tariffs on profitability.
- Anticipates another year of softer demand in 2025.