GMS Q1 Earnings & Sales Miss Estimates, Margins Decline Y/Y

Core Insights - GMS Inc. reported disappointing first-quarter fiscal 2025 results, with earnings and net sales missing consensus estimates, although net sales showed a year-over-year increase [1][4] Financial Performance - Adjusted earnings per share (EPS) were $1.93, missing the Zacks Consensus Estimate of$ 2.11 by 8.5%, and down from $2.40 in the same quarter last year [4] - Net sales reached$ 1.45 billion, falling short of the consensus mark of $1.49 billion by 2.7%, but increased by 2.8% year over year [4] - Organic net sales declined by 2.2% from the prior year, with volume growth offset by steel price deflation and weaker demand in commercial and multi-family markets [5] Segment Performance - Wallboard sales increased by 2.9% year over year to$ 587.9 million, with organic growth of 1.1% [6] - Ceilings sales rose by 18.2% year over year to $207.2 million, with organic sales up 5.7% [6] - Steel Framing sales decreased by 11.4% year over year to$ 209.9 million, with organic sales down 15.3% [6] - Complementary Product sales grew by 4.1% year over year to $443.5 million, but organic sales declined by 2.2% [7] Operating Highlights - Gross profit increased by 0.2% year over year to$ 451.6 million, with a gross margin contraction of 80 basis points to 32% [8] - Adjusted EBITDA was $145.9 million, down 15.8% from the previous year, with an adjusted EBITDA margin of 10.1%, contracting 220 basis points [9] Financial Position - As of July 31, 2024, cash and cash equivalents were$ 53.2 million, down from $166.1 million at the end of fiscal 2024 [9] - Available liquidity under revolving credit facilities was$ 565.3 million, with long-term debt amounting to $1.33 billion, up from$ 1.23 billion at the end of fiscal 2024 [9] - Cash used in operating activities was $22.9 million, compared to cash provided of$ 6.6 million in the same period last year [10] Share Repurchase Activity - During the fiscal first quarter, GMS repurchased 538,078 shares for $46.2 million, with$ 154.3 million of share repurchase authorization remaining as of July 31, 2024 [10]