Beacon Roofing (BECN) Q1 Earnings Lag Estimates, Down Y/Y

Beacon Roofing Supply, Inc. (NASDAQ:BECN) reported lower-than-expected earnings and net sales during the quarter. Also, its bottom line declined from the prior-year quarter’s figure due to increased depreciation expenses along with high costs in the fleet repairs, health care and customer-specific event expenses. Shares of the company fell slightly in the after-hour trading session on Feb 3, following news release.

Beacon Roofing reported adjusted earnings of 32 cents per share, which missed the Zacks Consensus Estimate of 43 cents by 25.6%. The reported figure declined 46.7% from 60 cents in the year-ago quarter.

Net sales of $1,675 billion lagged the consensus mark of $1,715 billion by 2.3%. The figure also declined 2.7% year over year. Lower hurricane-related demand impacted the results. Residential roofing product sales and complementary product sales declined 4.1% and 3.1%, respectively. However, non-residential roofing product sales inched up 0.2% year over year.

However, organic growth in regions, unaffected by hurricane, was flat year over year during the quarter.

Operating Hghlights

Cost of goods sold (contributing 75.5% to net sales) totaled $1,264.4 million, up 0.8% year over year. Gross margin expanded 20 basis points (bps) to 24.5% but contracted 80 bps year over year.

Adjusted EBITDA margin contracted 150 bps to 5.6%.

Segment Details

Sales in the Residential roofing product segment (contributing 41.9% to total first-quarter fiscal 2020 sales) fell 4.1% year over year to $702.2 million. Sales in the Non-residential roofing product unit (25.1% to total sales) inched up 0.2% year over year to $420.9 million.

Moreover, sales in the Complementary products (33% to total sales) declined 3.1% year over year to $552 million. The decline was mainly due to modest volume declines in deflationary pricing in select categories, including steel studs, lumber and wallboard.

Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise