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In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 47.1% and increased 157.4% year over year. Net sales topped the consensus estimate by 6.5% and increased 23.7% from the year-ago quarter.
It is to be noted that earnings surpassed the consensus mark in each of the trailing four quarters with the average surprise being 74%.
The Zacks Consensus Estimate for BLDR’s first-quarter earnings is pegged at $2.15 per share, indicating a 95.5% increase from the prior-year reported figure of $1.10. The consensus estimate for net sales is pegged at $4.75 billion, suggesting a 13.8% increase from the year-ago reported figure of $4.17 billion.
Factors to Note
Core organic sales growth in value-added products and acquisitions are likely to have benefited BLDR in first-quarter 2022. BLDR has been witnessing growth in value-added product volume, led by strong demand for Windows, Doors and Millwork products. The repair and remodel/other activities have also been adding to the positives.
As the company’s performance is highly influenced by the housing market, the positive momentum in the same is expected to benefit the upcoming results. Solid demand for new housing across the United States is likely to have supported the entire mix of businesses to some extent.
Furthermore, an opportunistic approach to acquisitions is an important part of Builders FirstSource’s growth strategy. These acquisitions have broadened the company’s product portfolio and expanded its geographic footprint and market share. A resilient housing market and prudent buyouts are expected to reflect on the company’s performance for the to-be-reported quarter.
BLDR has been leveraging sales growth, with emphasis on cost management, operational excellence and productivity initiatives that may have driven profitability in the quarter to be reported. Furthermore, Builders FirstSource has been focused on investing in innovation and enhancing digital solutions for customers. The standardization and automation processes and technology-based workflows may have helped minimize costs, thereby driving its bottom line, expanding margins and boosting profitability.
However, the company has been witnessing inflation related to raw materials, which is likely to have hurt the bottom line in the fourth quarter. It has been facing supply-related challenges with respect to some of the products, including OSB, plywood, lumber and particleboard. This is likely to have put pressure on margins to some extent.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks from the Zacks Retail-Wholesale space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat:
Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +1.09% and a Zacks Rank #2.
Shares of Costco Wholesale have gained 31.9% in the past year. COST’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 13.3%, on average.
Designer Brands Inc. (DBI - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.
Shares of Designer Brands have declined 26.1% in the past year. DBI’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 112.8%, on average.
AutoZone, Inc. (AZO - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #3.
Shares of AutoZone have gained 31.6% in the past year. AZO’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 25.9%, on average.
Image: Bigstock
What's in Store for Builders FirstSource (BLDR) Q1 Earnings?
Builders FirstSource, Inc. (BLDR - Free Report) is slated to report first-quarter 2022 results on May 10, before the opening bell.
In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 47.1% and increased 157.4% year over year. Net sales topped the consensus estimate by 6.5% and increased 23.7% from the year-ago quarter.
It is to be noted that earnings surpassed the consensus mark in each of the trailing four quarters with the average surprise being 74%.
Builders FirstSource, Inc. Price and EPS Surprise
Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for BLDR’s first-quarter earnings is pegged at $2.15 per share, indicating a 95.5% increase from the prior-year reported figure of $1.10. The consensus estimate for net sales is pegged at $4.75 billion, suggesting a 13.8% increase from the year-ago reported figure of $4.17 billion.
Factors to Note
Core organic sales growth in value-added products and acquisitions are likely to have benefited BLDR in first-quarter 2022. BLDR has been witnessing growth in value-added product volume, led by strong demand for Windows, Doors and Millwork products. The repair and remodel/other activities have also been adding to the positives.
As the company’s performance is highly influenced by the housing market, the positive momentum in the same is expected to benefit the upcoming results. Solid demand for new housing across the United States is likely to have supported the entire mix of businesses to some extent.
Furthermore, an opportunistic approach to acquisitions is an important part of Builders FirstSource’s growth strategy. These acquisitions have broadened the company’s product portfolio and expanded its geographic footprint and market share. A resilient housing market and prudent buyouts are expected to reflect on the company’s performance for the to-be-reported quarter.
BLDR has been leveraging sales growth, with emphasis on cost management, operational excellence and productivity initiatives that may have driven profitability in the quarter to be reported. Furthermore, Builders FirstSource has been focused on investing in innovation and enhancing digital solutions for customers. The standardization and automation processes and technology-based workflows may have helped minimize costs, thereby driving its bottom line, expanding margins and boosting profitability.
However, the company has been witnessing inflation related to raw materials, which is likely to have hurt the bottom line in the fourth quarter. It has been facing supply-related challenges with respect to some of the products, including OSB, plywood, lumber and particleboard. This is likely to have put pressure on margins to some extent.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, it has a Zacks Rank #3 and an Earnings ESP of -2.71%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some stocks from the Zacks Retail-Wholesale space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat:
Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +1.09% and a Zacks Rank #2.
Shares of Costco Wholesale have gained 31.9% in the past year. COST’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 13.3%, on average.
Designer Brands Inc. (DBI - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.
Shares of Designer Brands have declined 26.1% in the past year. DBI’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 112.8%, on average.
AutoZone, Inc. (AZO - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #3.
Shares of AutoZone have gained 31.6% in the past year. AZO’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 25.9%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.