Wrapping up Q2 earnings, we look at the numbers and key takeaways for the home construction materials stocks, including American Woodmark (NASDAQ: AMWD) and its peers.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 12 home construction materials stocks we track reported a satisfactory Q2. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was in line.
While some home construction materials stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.2% since the latest earnings results.
American Woodmark (NASDAQ: AMWD)
Starting as a small millwork shop, American Woodmark (NASDAQ: AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.
American Woodmark reported revenues of $403 million, down 12.2% year on year. This print fell short of analysts’ expectations by 4.5%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates.
“The new construction and remodel market continued to be weaker than expected for the first quarter of fiscal year 2026. Our teams are executing well despite the lower volumes and delivered Adjusted EBITDA margins of 10.5% for the first fiscal quarter,” said Scott Culbreth, President and CEO.
Unsurprisingly, the stock is down 3.1% since reporting and currently trades at $65.
Read our full report on American Woodmark here, it’s free.
Best Q2: Masco (NYSE: MAS)
Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $2.05 billion, down 1.9% year on year, outperforming analysts’ expectations by 2.5%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 9.9% since reporting. It currently trades at $72.24.
Is now the time to buy Masco? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Gibraltar (NASDAQ: ROCK)
Gibraltar (NASDAQ: ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.
Gibraltar reported revenues of $309.5 million, up 13.1% year on year, falling short of analysts’ expectations by 17.9%. It was a disappointing quarter as it posted full-year revenue and EPS guidance missing analysts’ expectations.
Gibraltar delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 3.9% since the results and currently trades at $61.85.
Read our full analysis of Gibraltar’s results here.
JELD-WEN (NYSE: JELD)
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE: JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $823.7 million, down 16.5% year on year. This print surpassed analysts’ expectations by 1.7%. It was an exceptional quarter as it also produced a beat of analysts’ EPS and EBITDA estimates.
JELD-WEN pulled off the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 19.1% since reporting and currently trades at $5.53.
Read our full, actionable report on JELD-WEN here, it’s free.
Simpson (NYSE: SSD)
Aiming to build safer and stronger buildings, Simpson (NYSE: SSD) designs and manufactures structural connectors, anchors, and other construction products.
Simpson reported revenues of $631.1 million, up 5.7% year on year. This result beat analysts’ expectations by 5.3%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ EBITDA and EPS estimates.
Simpson achieved the biggest analyst estimates beat among its peers. The stock is up 9.4% since reporting and currently trades at $181.87.
Read our full, actionable report on Simpson here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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