GMS Inc. Q4 FY2024 Earnings: Revenue Beats Estimates, EPS Misses Amid Steel Price Deflation

Volume Growth Across All Major Product Categories Drives Record Sales

  • Net Sales: $1.41 billion for Q4 FY2024, up 8.4% year-over-year, closely aligning with the estimated revenue of $1.402 billion.
  • GAAP EPS: $1.39 for Q4 FY2024, a decrease from $1.80 in the same quarter last year.
  • Gross Profit: Increased to $451.2 million, up 6.3% year-over-year, with a gross margin of 31.9%, down 60 basis points due to steel price deflation.
  • Net Income: $56.4 million for Q4 FY2024, a decrease of 25.4% from $75.6 million in the same quarter last year.
  • Free Cash Flow: $186.7 million for Q4 FY2024, slightly up from $185.4 million in the same quarter last year.
  • SG&A Expenses: Increased to $315.5 million, up from $279.8 million, driven by acquisitions and higher labor costs.
  • Platform Expansion: Completed the acquisition of Kamco Supply Corporation, expanding into the New York City market.
Article's Main Image

On June 20, 2024, GMS Inc (GMS, Financial) released its 8-K filing reporting financial results for the fourth quarter and fiscal year ended April 30, 2024. GMS Inc is a distributor of specialty building products including wallboard, suspended ceilings systems, steel framing, and other complementary building products. The company serves commercial and residential construction markets across various geographical segments, with the United States being its largest revenue generator.

Performance Overview

GMS Inc reported net sales of $1.41 billion for the fourth quarter of fiscal 2024, an 8.4% increase compared to the same period last year. This growth was driven by volume increases across all major product categories, despite significant steel price deflation. However, the company's net income for the quarter decreased by 25.4% to $56.4 million, translating to $1.39 per diluted share, missing the analyst estimate of $1.70 per share.


Financial Achievements and Challenges

Despite the challenges posed by steel price deflation, GMS Inc achieved record levels of net sales for the fiscal year, amounting to $5.50 billion, a 3.2% increase from the previous year. The company also reported strong cash flow, with cash from operating activities totaling $433.2 million for the year.

“We were pleased to deliver solid results for our fourth quarter and full year fiscal 2024, including record levels of net sales for the year,” said John C. Turner, Jr, President and Chief Executive Officer of GMS.

Income Statement Highlights

Metric Q4 2024 Q4 2023 FY 2024 FY 2023
Net Sales $1.41 billion $1.30 billion $5.50 billion $5.33 billion
Gross Profit $451.2 million $424.5 million $1.78 billion $1.73 billion
Net Income $56.4 million $75.6 million $276.1 million $333.0 million
EPS (Diluted) $1.39 $1.80 $6.75 $7.82

Balance Sheet and Cash Flow

As of April 30, 2024, GMS Inc had cash on hand of $166.1 million and total debt of $1.3 billion. The company generated free cash flow of $186.7 million for the quarter. Net debt leverage increased to 1.7 times Adjusted EBITDA, up from 1.4 times at the end of fiscal 2023.

Platform Expansion and Future Outlook

During the fourth quarter, GMS Inc continued its platform expansion with the acquisition of Kamco Supply Corporation, enhancing its presence in the New York City market. Additionally, the company announced the acquisition of Yvon Building Supply, Inc. and affiliated companies, expected to close in July 2024.

“As we move into fiscal 2025, we believe we are well prepared for what we expect to be continued changes in end market dynamics,” Turner added.

For more detailed financial information and analysis, visit the full 8-K filing.

Explore the complete 8-K earnings release (here) from GMS Inc for further details.