Reasons Why You Should Avoid Betting on Griffon Stock Right Now

Core Insights - Griffon Corporation (GFF) has underperformed due to weakness in the Consumer and Professional Products (CPP) segment, rising expenses, and high debt levels, compounded by foreign currency challenges [1][9] Business Weakness - The CPP segment has shown softness, with reduced consumer demand in most regions except Australia, leading to an 8% year-over-year revenue decline in Q4 of fiscal 2025 [4] - Increased tariffs from the U.S. administration have disrupted customer orders, further impacting the CPP segment [4] Rising Expenses - In Q4 of fiscal 2025, selling, general, and administrative expenses rose by 3.6% year-over-year, attributed to higher restructuring charges and strategic review costs [5] - These expenses accounted for 23.7% of sales, an increase of 70 basis points, which may negatively affect margins and profitability in fiscal 2026 [5] High Debt Level - Griffon's long-term debt reached $1.40 billion, reflecting an 8% compound annual growth rate (CAGR) over the past five years [6] - Current liabilities stood at $334.6 million, exceeding cash equivalents of $99 million, indicating insufficient cash to cover short-term obligations [6] Forex Woes - Operating in multiple regions exposes Griffon to political, environmental, and geopolitical risks, along with currency translation risks that may impact future performance [7] - A stronger U.S. dollar could adversely affect the company's overseas business results in the near term [7]