GMS Gears Up to Report Q1 Earnings: Factors to Consider

Core Viewpoint - GMS Inc. is expected to report its first-quarter fiscal 2025 results on August 29, with mixed performance indicators from previous quarters suggesting potential challenges ahead [1][8]. Estimate Revision Trend - The Zacks Consensus Estimate for earnings per share (EPS) has remained stable at $2.11, reflecting a 12.1% decline from the previous year's $2.40 [2]. - The consensus estimate for net sales is projected at $1.49 billion, indicating a 5.6% increase from the year-ago period [2]. Key Factors to Note - GMS's top-line performance is anticipated to improve year over year due to rising single-family demand and contributions from acquired businesses, although declining multi-family and commercial demand may negatively impact sales [3]. - Product category expectations include Wallboard volume growth in low-to-mid single digits, Ceilings volume growth in low-to-mid teens, and Steel Framing volume growth in low-to-mid single digits, with pricing trends varying across categories [4]. Sales Growth Expectations - Overall sales growth is expected to be in the mid-single digits, with specific segment estimates for Wallboard at $605.5 million, Ceilings at $206.7 million, Steel Framing at $224.8 million, and Complementary Products at $455.9 million, all showing year-over-year increases [5]. Bottom Line Expectations - The bottom line is likely to decline year over year due to increased labor costs and inflationary pressures, with anticipated near-term headwinds in Wallboard and Steel margins [6]. - For the fiscal first quarter, GMS expects a gross margin of approximately 31.5%, net income between $77 million and $79 million, and adjusted EBITDA between $160 million and $165 million, compared to last year's figures [7]. Earnings Prediction Model - The Zacks model does not predict an earnings beat for GMS, as the company has an Earnings ESP of +2.84% but carries a Zacks Rank of 4 (Sell) [8].