MasterBrand (MBC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales rose 6% year-over-year to $718.1 million, driven by the Supreme Cabinetry Brands acquisition, while organic sales declined due to softer repair and remodel demand and a 3% drop in average selling price.

• Net income for Q3 2024 was $29.1 million, down 51.3% year-over-year, impacted by acquisition-related costs, margin pressure, restructuring, and higher interest expense.

• Adjusted EBITDA was $104.5 million with a margin of 14.6%, down 160 basis points from last year due to margin contraction and non-recurring prior year benefits.

• Free cash flow for Q3 was $65 million, totaling $142.3 million year-to-date, lower than last year due to the absence of a prior year inventory release.

• The Supreme acquisition was completed in July 2024 for $527.1 million, broadening the premium cabinetry portfolio and dealer network.

Financial highlights

• Gross profit was $238 million, gross margin 33.1% vs. 35.1% last year, impacted by lower ASP, inflation, and non-recurring prior year items.

• Adjusted diluted EPS was $0.40, down from $0.49; diluted EPS was $0.22 compared to $0.46 last year.

• Operating income for Q3 2024 was $57.6 million, down 37.5% year-over-year.

• Selling, general, and administrative expenses increased to $166.3 million from $140.3 million.

• Restructuring charges rose to $7.8 million from $1.4 million.

Outlook and guidance

• Full-year 2024 net sales expected to increase low single digits year-over-year, with Q4 benefiting from price actions and new products.

• Adjusted EBITDA guidance reiterated at $385–$405 million, margin 14–14.5%.

• Adjusted diluted EPS expected at $1.50–$1.62; capital expenditures raised to $80–$85 million, including $9 million for integration.

• Free cash flow expected to exceed net income for 2024.

• Organic net sales performance anticipated to align with underlying market demand as new products and channel offerings gain traction.