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Beacon (BECN) Q2 Earnings & Sales Miss Estimates, Shares Down
BECNBeacon Roofing Supply(BECN) ZACKS·2024-08-02 13:35

Core Insights - Beacon Roofing Supply, Inc. reported disappointing second-quarter 2024 results, with earnings and net sales falling short of the Zacks Consensus Estimate, despite a top-line increase and consistent net sales growth over the last 14 quarters [1][4]. Financial Performance - Adjusted earnings per share (EPS) were 2.32,missingtheconsensusestimateof2.32, missing the consensus estimate of 2.82 by 17.7% and down 38.8% from the previous year's adjusted EPS of 2.66[4].−Netsalesreached2.66 [4]. - Net sales reached 2.67 billion, slightly below the consensus mark of 2.69billion,butrepresentedayear−over−yearincreaseof6.82.69 billion, but represented a year-over-year increase of 6.8%, driven by price execution and contributions from newly-established branches [4]. - Organic volumes saw a slight increase of 0-1%, while the weighted average selling price rose by 2-3%. Acquired branches contributed over 4% to the overall net sales increase [5]. Sales Breakdown by Product Line - Residential Roofing Product sales, accounting for 49.7% of quarterly net sales, were 1,328.9 million, up 2.4% year-over-year, which was below expectations of 10% growth [6]. - Non-Residential Roofing Product sales, comprising 27.9% of quarterly net sales, increased by 11.1% year-over-year to 745.1million,drivenbystrongmarketdemand[7].−ComplementaryProductsales,makingup22.4745.1 million, driven by strong market demand [7]. - Complementary Product sales, making up 22.4% of quarterly net sales, rose 12.3% year-over-year to 590.4 million, exceeding expectations of 10.4% growth, primarily due to increased waterproofing volumes and acquisitions [8]. Operating Metrics - The gross margin improved to 25.6%, up 20 basis points year-over-year, attributed to higher average selling prices that offset increased product costs [9]. - Adjusted EBITDA decreased by 3.7% year-over-year to 279.4million,withtheadjustedEBITDAmargincontractingby120basispointsto10.4279.4 million, with the adjusted EBITDA margin contracting by 120 basis points to 10.4% [9]. Financial Position - As of June 30, 2024, cash and cash equivalents were 76.6 million, down from 84millionattheendof2023.Long−termdebtincreasedto84 million at the end of 2023. Long-term debt increased to 2.49 billion from 2.19billionattheendof2023[10].−Netcashusedinoperatingactivitieswas2.19 billion at the end of 2023 [10]. - Net cash used in operating activities was 189.2 million in the first half of 2024, compared to 358.7millioncashprovidedintheprioryear[11].FutureGuidance−Forthethirdquarterof2024,thecompanyexpectsnetsalesperdaytoincreaseinthehighsingledigitsyear−over−year,withgrossmarginanticipatedtobeinthehigh25358.7 million cash provided in the prior year [11]. Future Guidance - For the third quarter of 2024, the company expects net sales per day to increase in the high single digits year-over-year, with gross margin anticipated to be in the high 25% range [12]. - For the full year 2024, net sales growth is projected to be 6-8% year-over-year, with gross margin expected in the mid-25% range and adjusted EBITDA revised to 930-$970 million [13]. - The company remains optimistic about sustained demand for residential non-discretionary repair and reroofing, despite challenges from lower storm volume projections and higher interest rates [14].