Beacon Q4 Earnings & Sales Miss, Cash Flow Hits New High

Core Insights - Beacon Roofing Supply, Inc. reported lower-than-expected fourth-quarter 2024 results, with earnings and net sales missing the Zacks Consensus Estimate, although top line grew while bottom line declined year over year [1][4] Financial Performance - Adjusted earnings per share were $1.65, missing the Zacks Consensus Estimate of $1.67 by 1.2% and down 3.9% from the previous year's adjusted level of $1.72 [4] - Net sales reached $2.40 billion, slightly missing the consensus mark of $2.42 billion by 0.8%, but increased 4.5% year over year [4] - Adjusted EBITDA for the quarter was $222.5 million, up from $216.7 million year over year, though the adjusted EBITDA margin contracted by 10 basis points to 9.3% [10][12] Sales Breakdown - Residential Roofing Products, accounting for 48.8% of quarterly net sales, generated $1.17 billion, up 0.8% year over year, primarily driven by price execution [7] - Non-Residential Roofing Products, comprising 27.5% of quarterly net sales, rose 5.5% year over year to $661.4 million due to higher volumes and strong market demand [8] - Complementary Building Products, making up 23.7% of quarterly net sales, increased 11.7% year over year to $569.9 million, driven by recent waterproofing acquisitions [9] Strategic Initiatives - The company has implemented its Ambition 2025 plan, resulting in 16 consecutive quarters of year-over-year sales increases, with investments including 19 new locations and 42 branch acquisitions [2][5] - Despite challenges in residential roofing due to adverse weather and a weak housing market, the focus on commercial reroofing and waterproofing helped mitigate some of the residential weaknesses [6] Shareholder Returns and Debt Management - Beacon returned $225 million to shareholders through share buybacks while reducing debt leverage, maintaining strong cash flow to support growth and shareholder returns [3] 2025 Guidance - For the first quarter of 2025, net sales per day are expected to decline by 3-5% year over year, with gross margin anticipated to remain stable [14] - For the full year 2025, net sales are projected to grow in the mid-single digits, with adjusted EBITDA expected in the range of $950-$1,030 million [14]