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Mar 30, 2025
MasterBrand Q1 2025 Earnings Report
reported Q1 2025 results with a 3% increase in net sales but a significant decrease in net income and adjusted EBITDA compared to the prior year period
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.
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.
Historical Earnings Impact
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