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.
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