GMS Tops Q4 Earnings, Expects Multi-Family And Commercial Projects Demand To Persist

GMS Inc GMS reported Q4 FY23 sales growth of 1.2% Y/Y (+0.7% Y/Y organically) to $1.304 billion, beating the consensus of $1.27 billion.

Excluding the impact from one less selling day in Q4 2023, net and organic net sales rose 2.8% and 2.2% Y/Y, respectively.

By product category, net sales rose 10.9% Y/Y in Wallboard, 4.2% Y/Y in Ceilings, and 2.3% Y/Y in Complementary Product, while declining 19.2% Y/Y in Steel Framing.

Gross profit rose 2.8% Y/Y to $424.5 million, and the margin expanded 50 basis points to 32.5%, led by successful pass-through of product price inflation, favorable product mix, and higher commercial Wallboard demand.

Adjusted EBITDA grew to $154.3 million from $154.2 million, with margins contracting 20 basis points to 11.8%.

Adjusted EPS of $2.11 beat the analyst consensus of $1.89.

Operating cash flow totaled $204.8 million vs. $199.5 million a year ago, with a free cash flow of $185.4 million in the quarter.

As of April 30, 2023, GMS held $164.7 million in cash and equivalents.

Repurchase: GMS bought back shares worth $27.9 million in the quarter and had $100.2 million of shares remaining under the authorization as of April 30, 2023.

John C. Turner, Jr., President and CEO said, "We continued to make progress on our four strategic priorities in fiscal 2023. Specifically, we focused on ensuring product availability and delivering exceptional customer service in our efforts to grow our share in our core products, and we took steps to further expand our Complementary Products."

"Looking ahead, given our scale, expertise, breadth of product offerings and commitment to providing outstanding service, we believe we are well-positioned to navigate the current slowdown in single-family activity and the resultant shift in demand toward multi-family and commercial projects. Moreover, given the limited inventory of existing homes and the structural need for residential housing, we are also encouraged by recent improvement in starts activity and builder sentiment as we look later into our year."

Also Read: GMS Acquires EMJ In Chicago & Blair In Ontario For Undisclosed Financial Terms

Price Action: GMS shares are trading higher by 0.13% at $67.68 on the last check Thursday.