We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Beacon Roofing Supply, Inc. (BECN - Free Report) reported decent results for second-quarter 2023, with earnings and revenues surpassing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
The upside was backed by strong residential demand and a solid Coastal Construction Product segment contribution. Also, the emphasis on Ambition 2025 growth initiatives, strategic investments in greenfields and acquisitions drove top-line growth. The company also lifted its expectations for the year.
Shares of the company rose 1% in the after-hours trading session on Aug 3, post the earnings release.
Earnings & Revenue Discussion
This distributor of building products reported adjusted earnings of $2.66 per share, which topped the consensus mark of $2.27 by 17.2% and increased 10.4% from the year-ago adjusted level of $2.41 per share.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
For the quarter, net sales of $2,503.7 million topped the consensus mark of $2,476 million by 1.1%. The top line grew 6.2% on a year-over-year basis, driven by solid execution on the Ambition 2025 growth program, including acquisitions and opening of greenfield locations, as well as solid pricing.
During the quarter, the weighted-average selling price increased approximately 2-3%, but volumes dropped 0-1%.
Sales According to Line of Business
Residential Roofing Product: For the reported quarter, sales of this product line (comprising 51.8% of quarterly net sales) were $1,298 million, up 8.5% from the prior year. Our model predicted the metric to be $1,212.7 million.
Non-Residential Roofing Product: Sales (comprising 26.8% of the quarterly net sales) declined 1.7% from the year-ago quarter to $670.8 million. Our estimate was $693.4 million.
Complementary Product: For the quarter, sales of this product line (comprising 21.4% of quarterly net sales) increased 11.6% year over year to $534.9 million. Our model predicted the metric to be $532.6 million.
Operating Highlights
The gross margin of 25.4% was down 220 basis points (bps) year over year due to higher product costs, reflective of inventory profit roll-off, majorly offset by higher average selling prices of the company’s products.
Adjusted operating margin declined to 15.1 % from 15.7% a year ago, owing to decreased payroll and benefits costs, primarily due to lower incentive compensation and decreases in selling, general and administrative expenses.
Adjusted EBITDA declined 5.7% on a year-over-year basis to $290.3 million due to lower gross margin and higher operating expenses. Adjusted EBITDA margin contracted 140 bps year over year to 11.6%.
Other Financial Details
As of Jun 30, 2023, the company had cash and cash equivalents of $65.8 million compared with $67.7 million at 2022-end and $54.6 million at June 2022-end. Long-term debt, net was $1,603.2 million, slightly down from the 2022-end value of $1,606.4 million and $1,609.6 million as of Jun 30, 2022.
Net cash provided by operating activities was $358.7 million in the first half of 2023 versus $187 million net cash used in operating activities in the prior year.
Q3 View
In the third quarter of 2023, the company expects net sales to increase approximately 7% on a year-over-year basis. The gross margin is expected to be in the mid-to-high 25%.
2023 Guidance Raised
For 2023, net sales growth is anticipated to be between 4% and 6%, up from the previously expected range of 2-4%.
Adjusted EBITDA is expected to be in the range of $850-$890 million (previously $810 million to $870 million).
Continuous investments in greenfield locations are expected to yield 20-25 new locations in 2023.
The Zacks Consensus Estimate for PLAY’s 2024 sales and EPS indicates a rise of 17% and 29%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 480.6%, on average. Shares of ANF have increased by 116.5% in the past year.
The Zacks Consensus Estimate for ANF’s 2024 sales and EPS indicate an increase of 3.4% and 732%, respectively, from the year-ago period’s levels.
BJ's Restaurants, Inc. (BJRI - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 121.2%, on average. Shares of BJRI have increased 56.8% in the past year.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates 5.6% and 405.9% growth, respectively, from the year-ago period’s levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Beacon (BECN) Beats on Q2 Earnings & Revenues, Ups 2023 View
Beacon Roofing Supply, Inc. (BECN - Free Report) reported decent results for second-quarter 2023, with earnings and revenues surpassing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
The upside was backed by strong residential demand and a solid Coastal Construction Product segment contribution. Also, the emphasis on Ambition 2025 growth initiatives, strategic investments in greenfields and acquisitions drove top-line growth. The company also lifted its expectations for the year.
Shares of the company rose 1% in the after-hours trading session on Aug 3, post the earnings release.
Earnings & Revenue Discussion
This distributor of building products reported adjusted earnings of $2.66 per share, which topped the consensus mark of $2.27 by 17.2% and increased 10.4% from the year-ago adjusted level of $2.41 per share.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Beacon Roofing Supply, Inc. price-consensus-eps-surprise-chart | Beacon Roofing Supply, Inc. Quote
For the quarter, net sales of $2,503.7 million topped the consensus mark of $2,476 million by 1.1%. The top line grew 6.2% on a year-over-year basis, driven by solid execution on the Ambition 2025 growth program, including acquisitions and opening of greenfield locations, as well as solid pricing.
During the quarter, the weighted-average selling price increased approximately 2-3%, but volumes dropped 0-1%.
Sales According to Line of Business
Residential Roofing Product: For the reported quarter, sales of this product line (comprising 51.8% of quarterly net sales) were $1,298 million, up 8.5% from the prior year. Our model predicted the metric to be $1,212.7 million.
Non-Residential Roofing Product: Sales (comprising 26.8% of the quarterly net sales) declined 1.7% from the year-ago quarter to $670.8 million. Our estimate was $693.4 million.
Complementary Product: For the quarter, sales of this product line (comprising 21.4% of quarterly net sales) increased 11.6% year over year to $534.9 million. Our model predicted the metric to be $532.6 million.
Operating Highlights
The gross margin of 25.4% was down 220 basis points (bps) year over year due to higher product costs, reflective of inventory profit roll-off, majorly offset by higher average selling prices of the company’s products.
Adjusted operating margin declined to 15.1 % from 15.7% a year ago, owing to decreased payroll and benefits costs, primarily due to lower incentive compensation and decreases in selling, general and administrative expenses.
Adjusted EBITDA declined 5.7% on a year-over-year basis to $290.3 million due to lower gross margin and higher operating expenses. Adjusted EBITDA margin contracted 140 bps year over year to 11.6%.
Other Financial Details
As of Jun 30, 2023, the company had cash and cash equivalents of $65.8 million compared with $67.7 million at 2022-end and $54.6 million at June 2022-end. Long-term debt, net was $1,603.2 million, slightly down from the 2022-end value of $1,606.4 million and $1,609.6 million as of Jun 30, 2022.
Net cash provided by operating activities was $358.7 million in the first half of 2023 versus $187 million net cash used in operating activities in the prior year.
Q3 View
In the third quarter of 2023, the company expects net sales to increase approximately 7% on a year-over-year basis. The gross margin is expected to be in the mid-to-high 25%.
2023 Guidance Raised
For 2023, net sales growth is anticipated to be between 4% and 6%, up from the previously expected range of 2-4%.
Adjusted EBITDA is expected to be in the range of $850-$890 million (previously $810 million to $870 million).
Continuous investments in greenfield locations are expected to yield 20-25 new locations in 2023.
Zacks Rank & Key Picks
Beacon sports a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Retail and Wholesale sector are:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1 (Strong Buy).
PLAY has a trailing four-quarter earnings surprise of 6.9%, on average. Shares of PLAY have gained 38.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PLAY’s 2024 sales and EPS indicates a rise of 17% and 29%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 480.6%, on average. Shares of ANF have increased by 116.5% in the past year.
The Zacks Consensus Estimate for ANF’s 2024 sales and EPS indicate an increase of 3.4% and 732%, respectively, from the year-ago period’s levels.
BJ's Restaurants, Inc. (BJRI - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 121.2%, on average. Shares of BJRI have increased 56.8% in the past year.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates 5.6% and 405.9% growth, respectively, from the year-ago period’s levels.