MasterBrand (MBC) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were $660.3 million, up 3.5% year-over-year, driven by the Supreme acquisition and price increases, but offset by a 9% volume decline in the base business and weaker end market demand.

• Net income declined 65% year-over-year to $13.3 million, impacted by higher costs, increased interest expense, and restructuring charges.

• Adjusted EBITDA was $67.1 million with a margin of 10.2%, down 220 basis points year-over-year due to lower volumes and fixed cost leverage.

• Builder direct sales grew over 4% despite new construction market declines, while repair and remodel market volumes weakened.

• The Supreme acquisition expanded the premium cabinetry portfolio and dealer network, funded by cash and new debt.

Financial highlights

• Q1 net sales: $660.3 million (+3.5% YoY); gross profit: $202.2 million (-1.2% YoY); gross margin: 30.6% (-150 bps YoY).

• Net income: $13.3 million (down from $37.5 million YoY); diluted EPS: $0.10 (down from $0.29 YoY); adjusted EPS: $0.18 (down from $0.31 YoY).

• Adjusted EBITDA: $67.1 million (down from $79.4 million YoY); adjusted EBITDA margin: 10.2% (down from 12.4% YoY).

• Net debt: $944.7 million; net debt-to-adjusted EBITDA leverage ratio: 2.7x (2.4x including Supreme for 12 months).

• Free cash flow: -$41.2 million (down from +$11.7 million YoY); CapEx: $9.8 million (up from $7 million YoY).

Outlook and guidance

• 2025 net sales expected to decline low single digits YoY; organic net sales to decrease mid-single digits; acquisition-related sales up mid-single digits.

• Adjusted EBITDA guidance: $315–$365 million; margin: 12–13.5%.

• Adjusted diluted EPS: $1.03–$1.32; CapEx: $75–$85 million (down $10 million from prior guidance).

• Free cash flow for 2025 expected to exceed net income.

• Tariffs expected to have a low single-digit percentage impact on net sales; mitigation through surcharges, supplier renegotiation, and footprint adjustments.