Builders FirstSource (BLDR) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 1.6% year-over-year to $4.5B, with core organic sales down 3.8% and multifamily segment sales down over 31%, partially offset by acquisitions and single-family growth.

• Gross profit was $1.5B, down 8% year-over-year, with gross margin at 32.8%, mainly due to multifamily normalization.

• Adjusted EBITDA was $670M, down 12.9% year-over-year, with a margin of 15.0%; adjusted EPS was $3.50, down 10%.

• Free cash flow rose to $367M, up 35.9% year-over-year, supporting $990M in share repurchases and $133M in acquisitions.

• Management maintained a disciplined capital allocation strategy, investing in value-added products, digital solutions, and operational efficiency.

Financial highlights

• Q2 net sales were $4.5B, down 1.6% year-over-year; gross margin was 32.8%, down from 35.2% a year ago.

• Adjusted EBITDA was $670M (15.0% margin), down 13% year-over-year; adjusted net income was $420M, with adjusted EPS of $3.50.

• Net income for Q2 was $344M, down from $405M in Q2 2023; diluted EPS was $2.87.

• Free cash flow for Q2 was $367M; operating cash flow was $452M.

• SG&A as a percentage of sales was 21.8%, improved from 22.5% last year.

Outlook and guidance

• 2024 net sales guidance lowered to $16.4–$17.2B; adjusted EBITDA forecasted at $2.2–$2.4B, with margin of 13.4–14.0%.

• Gross margin expected at 31.5–32.5%; free cash flow guidance of $1.0–$1.2B; capex $400–$500M.

• Q3 2024 net sales expected at $4.3–$4.6B; adjusted EBITDA at $575–$625M.

• Single-family starts projected up low-single digits, multi-family down 25–30%, R&R flat.

• Long-term targets reaffirmed assuming normalized single-family starts and continued market share gains.