Economic Indicators - Stanley Druckenmiller identifies real estate and transportation sectors as reliable indicators for predicting economic and market movements [2][3] - Homebuilding stocks and trucking companies are highlighted as key areas of focus within these sectors [3] Homebuilder Industry - The iShares U.S. Home Construction ETF (ITB) is currently priced at $117.72, reflecting a decline of 2.69% [4] - Goldman Sachs projects a 5% earnings per share (EPS) growth for the S&P 500 over the next 12 months, with a forward P/E valuation of 18.0x [4] - The homebuilder industry shows a valuation multiple of 10.9x, significantly below the S&P 500, indicating potential economic weakness [5] - Building permits and housing starts have decreased by approximately 8.5% over the past year, signaling a lack of strength in the financial system [6] - Insider selling has been observed in Toll Brothers, with a consensus price target of $144.7 indicating the stock is fairly valued [6][7] - PulteGroup has seen 9% of new orders canceled, with a consensus price target of $133.1 showing limited upside potential [8][9] - Builders FirstSource also reports insider selling and a 21.2% increase in short interest, reflecting negative sentiment [10] Transportation Sector - The iShares U.S. Transportation ETF (IYT) is currently priced at $66.80, down 0.70% [12] - Knight-Swift Transportation is forecasted to have an EPS growth of 134.8%, with a price target of $62, indicating an 18.3% upside [12][13] - FedEx is expected to see a 10.7% EPS growth, with a price target of $359, representing a 20.2% upside [13] - GXO Logistics has a potential EPS growth of 20.4%, with a consensus price target of $67.45, indicating a 34.8% upside [14]

Momentum refers to how far a stock's price has moved in a given time. For the most part, stocks stay within their average or typical range. If the price exceeds this range, the stock is considered to be overbought. Three popular momentum indicators on the following chart show that shares of Builders FirstSource, Inc. BLDR are overbought. This is why it's our Stock of the Day. It's important to know when a stock is overbought. These stocks tend to reverse and move lower. But traders need to exercise caution. ...

Key Takeaways The S&P 500 added 1.2% on Friday, Aug. 23, after Federal Reserve Chair Jerome Powell indicated the central bank is prepared to lower interest rates. Powell's remarks helped drive gains for companies in rate-sensitive industries, including construction materials, ocean cruises, and solar power. Intuit shares tumbled after the financial software firm reported a surprise quarterly loss. Major U.S. equities indexes climbed in the week's final trading session as Federal Reserve Chair Jerome Powell ...

Builders FirstSource (BLDR) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future. Over the past month, shares of this construction supply company have returned +0.1%, compared to the Zacks S&P 500 composite's -4.8% change. During this period, the Zacks Building Products - Retail industry, which Builders FirstSource falls in, has lost 2.9%. The key question now is: What ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40620 BUILDERS FIRSTSOURCE, INC. (Exact name of registrant as specified in its charter) Delaware 52-2084569 (State or other jurisdiction of ...

Builders FirstSource, Inc. (BLDR) reported mixed results for the second quarter of 2024 with earnings surpassing the Zacks Consensus Estimate but net sales missing the same. Both earnings and sales declined year over year owing to weaker-than-expected Single-Family starts, slowing Multi-Family, and broader housing affordability challenges. Shares of this manufacturer and supplier of building materials dipped 5.4% in the pre-market trading session on Aug 6. On an impressive note, BLDR achieved around $37 mil ...

Financial Data and Key Metrics Changes - Net sales for Q2 2024 were $4.5 billion, a decrease of 1.6% year-over-year, with core organic sales declining by 3.8% [17] - Adjusted EBITDA was approximately $670 million, down 13% compared to the prior year, with an adjusted EBITDA margin of 15%, a decrease of 200 basis points [19] - Gross profit was $1.5 billion, an 8% decrease year-over-year, with gross margins at 32.8%, down 240 basis points [19] - Adjusted earnings per diluted share were $3.50, a decrease of 10% compared to the prior year [20] Business Line Data and Key Metrics Changes - Installed sales increased by 15% year-over-year, focusing on addressing labor challenges [8] - Value-added products represented approximately 49% of net sales during Q2 [19] - The multi-family segment saw a decline of 31%, while single-family and repair & remodel segments increased by 1% and 1.5% respectively [17] Market Data and Key Metrics Changes - The single-family growth momentum has stalled due to lower-than-expected starts and affordability challenges [9] - The value of new starts has decreased as the market adapts to affordability issues, with builders opting for smaller and simpler homes [10] - In the Phoenix market, the company supplied materials to 45% more homes, but dollar sales only increased by 15% [18] Company Strategy and Development Direction - The company continues to invest in value-added products, installed services, and digital solutions to enhance customer efficiency and operational effectiveness [5] - A disciplined approach to capital allocation includes a proven M&A strategy and share repurchase program, with nearly $1 billion in shares repurchased in Q2 [13] - The digital platform has seen strong adoption, with over $250 million in orders placed through it since its launch [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the current housing market but remains confident in long-term growth due to favorable demographic trends and housing underbuilding [27] - The company has lowered its full-year 2024 guidance for net sales to $16.4 billion to $17.2 billion, down from a previous range of $17.5 billion to $18.5 billion [22] - Management expects continued normalization in the multi-family segment and anticipates a rebound in 2025 as rental rates become more favorable compared to mortgage rates [60] Other Important Information - The company completed three acquisitions in Q2 with aggregate 2023 sales of approximately $72 million [12] - The company raised over $1 million for the Leukemia & Lymphoma Society, bringing total contributions to nearly $12 million since 2006 [15] Q&A Session Summary Question: Inquiry about gross margin expectations for Q4 and 2025 - Management indicated that they expect to exit 2024 with gross margins around 31%, with potential headwinds in 2025 due to multi-family normalization [30][40] Question: Clarification on EBITDA guidance changes - The decline in EBITDA guidance is primarily attributed to changes in commodity prices, with the bulk of the decline being due to deleveraging effects [33][36] Question: Multi-family margin normalization and outlook - Management noted that multi-family margins have seen a decline of 50 to 100 basis points, with expectations of continued headwinds throughout the year [50][51] Question: Market share trends and competitive behavior - The company plans to pursue market share in a disciplined manner, focusing on win-win scenarios with customers while maintaining strong margins [52][55] Question: Competitive pricing in the lumber market - Management acknowledged competitive pricing pressures but emphasized their strategy of providing value-added packages to customers [54][57]

Builders FirstSource (BLDR) came out with quarterly earnings of $3.50 per share, beating the Zacks Consensus Estimate of $3.14 per share. This compares to earnings of $3.89 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 11.46%. A quarter ago, it was expected that this construction supply company would post earnings of $2.42 per share when it actually produced earnings of $2.65, delivering a surprise of 9.50%. Over the last f ...

Footnote Builders® OUTPERFORM TODAY. TRANSFORM TOMORROW. Q2 2024 Earnings Presentation D A V E R U S H , C E O P E T E R J A C K S O N , C F O A U G U S T 6 , 2 0 2 4 Safe Harbor & Non-GAAP Financial Measures Footnote Cautionary Notice Statements in this presentation and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about forecasted financial performance or other statements about anticipations, beliefs, expectations, hopes, syne ...

[Second Quarter 2024 Highlights](index=1&type=section&id=Second%20Quarter%202024%20Highlights) The company's second quarter 2024 performance saw a decline in net sales and profitability, alongside strong cash flow generation and significant share repurchases Q2 2024 Key Financial Metrics (YoY Comparison) | Metric | Q2 2024 | Change (YoY) | Notes | | :--- | :--- | :--- | :--- | | Net Sales | $4.5 billion | -1.6% | Core organic sales down 3.8%, driven by Multi-Family decline | | Gross Profit Margin | 32.8% | -240 bps | Primarily driven by normalization, especially in Multi-Family | | Net Income | $344.1 million | -15.0% | - | | Diluted EPS | $2.87 | -9.2% | Compared to $3.16 in Q2 2023 | | Adjusted EBITDA | $669.7 million | -12.9% | Driven by lower gross profit, offset by lower operating expenses | | Adjusted EBITDA Margin | 15.0% | -200 bps | Has remained in the mid-teens or better for 13 consecutive quarters | - Cash provided by operating activities increased to **$452.1 million**, and free cash flow grew by **35.9%** to **$366.7 million** compared to the prior year period[3](index=3&type=chunk) - The company repurchased **5.8 million** shares of common stock for **$989.6 million** during the quarter at an average price of **$170.01 per share**[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized resilient performance in a challenging housing market, focusing on cost control, value-added solutions, and strategic capital allocation - CEO Dave Rush highlighted the company's resilient performance, maintaining a **mid-teens EBITDA margin** despite a complex environment with weaker Single-Family starts, slowing Multi-Family, and housing affordability challenges[4](index=4&type=chunk) - The company's strategy focuses on controlling costs, investing in value-added solutions, and driving adoption of its digital platform to navigate the uncertain macroeconomic landscape[4](index=4&type=chunk) - CFO Peter Jackson noted the effective navigation of a softer housing market by leveraging the company's strong balance sheet to execute nearly **$1 billion** in share repurchases and three tuck-in acquisitions[4](index=4&type=chunk)[5](index=5&type=chunk) [Second Quarter 2024 Financial Performance](index=2&type=section&id=Second%20Quarter%202024%20Financial%20Performance%20Highlights) The second quarter saw a decline in net sales and gross profit margins, while operating expenses decreased, leading to reduced net income and Adjusted EBITDA [Net Sales](index=2&type=section&id=Net%20Sales) Net sales decreased by **1.6%** to **$4.5 billion**, primarily due to a **3.8%** decline in core organic sales. A significant **31.3%** drop in the Multi-Family segment was the main driver, which was partially offset by growth in Single-Family (**+1.1%**), R&R/Other (**+1.5%**), and acquisitions (**+1.9%**) Q2 2024 Net Sales Breakdown (YoY) | Category | Change | Impact on Net Sales | | :--- | :--- | :--- | | Core Organic Sales | -3.8% | - | | - Single-Family | +1.1% | +0.7% | | - Multi-Family | -31.3% | -4.8% | | - R&R/Other | +1.5% | +0.3% | | Acquisitions | +1.9% | +1.9% | | Commodity Inflation | +0.3% | +0.3% | [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit fell **8.3%** to **$1.5 billion**. The gross profit margin contracted by **240 basis points** to **32.8%**, which the company attributes to ongoing margin normalization, particularly within the Multi-Family segment - Gross profit decreased by **8.3%** to **$1.5 billion**[5](index=5&type=chunk) - Gross profit margin declined **240 basis points** to **32.8%** due to normalization, especially in Multi-Family[5](index=5&type=chunk) [Operating and Other Expenses](index=2&type=section&id=Operating%20and%20Other%20Expenses) SG&A expenses decreased by **4.4%** to **$973.2 million**, mainly from lower variable compensation, leading to a **70 basis point** improvement as a percentage of sales. Interest expense remained stable at **$52.0 million**, while income tax expense decreased due to lower pre-tax income and a lower effective tax rate of **21.3%** - SG&A expenses decreased by **$44.7 million** (**4.4%**) to **$973.2 million**, primarily due to lower variable compensation[6](index=6&type=chunk) - The effective tax rate for Q2 decreased by **150 basis points** year-over-year to **21.3%**, mainly due to a stock-based compensation windfall benefit[7](index=7&type=chunk) [Net Income and Adjusted EBITDA](index=2&type=section&id=Net%20Income%20and%20Adjusted%20EBITDA) Net income declined **15.0%** to **$344.1 million**, resulting in diluted EPS of **$2.87**. Adjusted net income also fell **15.6%** to **$420.4 million**. Adjusted EBITDA decreased **12.9%** to **$669.7 million**, with the margin contracting by **200 basis points** to **15.0%**, primarily due to lower gross profit margins Q2 2024 Profitability Metrics (YoY) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $344.1M | $404.6M | -15.0% | | Diluted EPS | $2.87 | $3.16 | -9.2% | | Adjusted Net Income | $420.4M | - | -15.6% | | Adjusted Diluted EPS | $3.50 | $3.89 | -10.0% | | Adjusted EBITDA | $669.7M | - | -12.9% | | Adjusted EBITDA Margin | 15.0% | 17.0% | -200 bps | [Capital Structure, Leverage, and Liquidity](index=3&type=section&id=Capital%20Structure%2C%20Leverage%2C%20and%20Liquidity%20Information) The company maintained strong liquidity and a moderate leverage ratio, actively engaging in significant share repurchases to return capital to shareholders [Liquidity and Leverage](index=3&type=section&id=Liquidity%20and%20Leverage) As of June 30, 2024, the company maintained a strong liquidity position of approximately **$1.7 billion**. Net debt stood at **$3.8 billion**, resulting in a net debt to LTM Adjusted EBITDA ratio of **1.4x**, an increase from **1.1x** in the prior year period - Total liquidity was approximately **$1.7 billion**, consisting of **$1.6 billion** in revolving credit facility availability and **$0.1 billion** in cash[9](index=9&type=chunk) - The net debt to LTM Adjusted EBITDA ratio was **1.4x** as of June 30, 2024, compared to **1.1x** in the prior year period[9](index=9&type=chunk) [Share Repurchases](index=3&type=section&id=Share%20Repurchases) The company was active in its share repurchase program, buying back **5.8 million** shares for **$989.6 million** in Q2. The Board authorized a new **$1.0 billion** repurchase plan. Since August 2021, the company has repurchased **45.0%** of its total shares outstanding for **$7.1 billion** - In Q2 2024, repurchased **5.8 million** shares for **$989.6 million**[9](index=9&type=chunk) - The Board of Directors authorized a new share repurchase plan of up to **$1.0 billion**[10](index=10&type=chunk) - Since the program's inception in August 2021, the company has repurchased **93.0 million** shares (**45.0%** of total shares outstanding) for a total of **$7.1 billion**[10](index=10&type=chunk) [Operational Excellence Productivity](index=3&type=section&id=Operational%20Excellence%20Productivity) The company achieved significant productivity savings in Q2 and year-to-date, expecting to meet full-year targets through operational and supply chain initiatives - The company achieved approximately **$37 million** in productivity savings in Q2 2024 from operations excellence and supply chain initiatives[11](index=11&type=chunk) - Year-to-date savings total approximately **$77 million**[11](index=11&type=chunk) - The company expects to deliver total productivity savings of **$90 million to $110 million** for the full year 2024[11](index=11&type=chunk) [2024 Full Year Outlook](index=3&type=section&id=2024%20Full%20Year%20Total%20Company%20Outlook) The company provided its full-year 2024 financial guidance, reflecting market assumptions for housing starts and operational targets for sales, profitability, and cash flow [Full Year Guidance](index=3&type=section&id=Full%20Year%20Guidance) The company provided its full-year 2024 outlook, projecting net sales between **$16.4 billion** and **$17.2 billion** and Adjusted EBITDA between **$2.2 billion** and **$2.4 billion**. Free cash flow is expected to be in the range of **$1.0 billion** to **$1.2 billion** 2024 Full Year Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Net Sales | $16.4B - $17.2B | | Gross Profit Margin | 31.5% - 32.5% | | Adjusted EBITDA | $2.2B - $2.4B | | Adjusted EBITDA Margin | 13.4% - 14.0% | | Free Cash Flow | $1.0B - $1.2B | [Key Assumptions for 2024](index=4&type=section&id=2024%20Full%20Year%20Assumptions) The 2024 outlook is based on several key market and operational assumptions. These include low-single-digit growth in Single-Family starts, a significant **25-30%** decline in Multi-Family starts, and flat R&R activity. Acquisitions are expected to contribute **1.5% to 2.0%** to net sales growth - **Market Assumptions:** - Single-Family starts: Up **low-single digits** - Multi-Family starts: Down **25% to 30%** - R&R: Flat to prior year[13](index=13&type=chunk) - **Operational & Financial Assumptions:** - Net sales growth from acquisitions: **1.5% to 2.0%** - Capital expenditures: **$400 million to $500 million** - Average commodity prices: **$380 to $400 per mbf** - Effective tax rate: **23.0% to 25.0%**[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) This section details consolidated financial statements, including operations, cash flows, balance sheet, sales by category, and non-GAAP reconciliations [Consolidated Statement of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) For the second quarter ended June 30, 2024, net sales were **$4.46 billion**, down from **$4.53 billion** in the prior year. Net income was **$344.1 million**, or **$2.87** per diluted share, compared to **$404.6 million**, or **$3.16** per diluted share, in Q2 2023 Statement of Operations Summary (Three Months Ended June 30) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net sales | $4,456,340 | $4,528,890 | | Gross margin | $1,462,684 | $1,594,946 | | Income from operations | $489,483 | $577,072 | | Net income | $344,090 | $404,619 | | Diluted EPS | $2.87 | $3.16 | [Consolidated Statement of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2024, net cash provided by operating activities was **$769.3 million**. The company used **$315.6 million** in investing activities, primarily for acquisitions and capital expenditures, and **$444.2 million** in financing activities, driven by **$1.0 billion** in common stock repurchases Cash Flow Summary (Six Months Ended June 30, 2024) | (in thousands) | Amount | | :--- | :--- | | Net cash provided by operating activities | $769,271 | | Net cash used in investing activities | ($315,625) | | Net cash used in financing activities | ($444,233) | | Net change in cash | $9,413 | [Consolidated Balance Sheet](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEET) As of June 30, 2024, the company reported total assets of **$10.72 billion**, up from **$10.50 billion** at year-end 2023. Total liabilities increased to **$6.42 billion** from **$5.77 billion**, while total stockholders' equity decreased to **$4.30 billion** from **$4.73 billion**, reflecting significant share repurchase activity Balance Sheet Summary (in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $3,454,705 | $3,300,728 | | Total assets | $10,721,187 | $10,499,452 | | Total current liabilities | $1,892,541 | $1,863,437 | | Total liabilities | $6,416,545 | $5,767,101 | | Total stockholders' equity | $4,304,642 | $4,732,351 | [Sales by Product Category](index=13&type=section&id=Sales%20by%20Product%20Category) In Q2 2024, Value-added products constituted the largest portion of sales at **48.7%**, though sales in this category declined **9.0%** YoY. Lumber & lumber sheet goods saw a significant **12.7%** increase in sales, driven by commodity price changes Q2 2024 Net Sales by Product Category (YoY % Change) | Product Category | Net Sales (in millions) | % of Net Sales | % Change YoY | | :--- | :--- | :--- | :--- | | **Value-added products** | **$2,170.3** | **48.7%** | **(9.0%)** | | - Manufactured products | $1,054.9 | 23.7% | (18.5%) | | - Windows, doors & millwork | $1,115.4 | 25.0% | 2.2% | | Specialty building products & services | $1,091.2 | 24.5% | 0.8% | | Lumber & lumber sheet goods | $1,194.8 | 26.8% | 12.7% | | **Total net sales** | **$4,456.3** | **100.0%** | **(1.6%)** | [Reconciliation of Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20Adjusted%20Non-GAAP%20Financial%20Measures%20to%20their%20GAAP%20Equivalents) The company reconciled its GAAP net income of **$344.1 million** for Q2 2024 to its non-GAAP Adjusted EBITDA of **$669.7 million**. Key adjustments included adding back income tax expense (**$117.5 million**), amortization (**$81.0 million**), depreciation (**$62.3 million**), and interest expense (**$52.0 million**) Q2 2024 Reconciliation to Adjusted EBITDA (in millions) | Item | Amount | | :--- | :--- | | **GAAP net income** | **$344.1** | | Tax-effect of adjustments to net income | ($24.1) | | Amortization expense | $81.0 | | **Adjusted net income** | **$420.4** | | Depreciation expense | $62.3 | | Interest expense, net | $52.0 | | Income tax expense | $117.5 | | Stock compensation expense | $16.7 | | Other adjustments | $1.9 | | **Adjusted EBITDA** | **$669.7** |