As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home construction materials industry, including JELD-WEN (NYSE:JELD) 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 mixed Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.6% since the latest earnings results.
Weakest Q3: 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 $934.7 million, down 13.2% year on year. This print fell short of analysts’ expectations by 5.6%. Overall, it was a disappointing quarter for the company with full-year revenue guidance missing analysts’ expectations.
JELD-WEN delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 42.1% since reporting and currently trades at $8.19.
Read our full report on JELD-WEN here, it’s free.
Best Q3: Trex (NYSE:TREX)
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.
Trex reported revenues of $233.7 million, down 23.1% year on year, outperforming analysts’ expectations by 3.7%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
Trex delivered the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 3.8% since reporting. It currently trades at $69.03.
Is now the time to buy Trex? Access our full analysis of the earnings results here, it’s free.
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 $452.5 million, down 4.5% year on year, falling short of analysts’ expectations by 1.3%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
As expected, the stock is down 21.1% since the results and currently trades at $79.53.
Read our full analysis of American Woodmark’s results here.
Fortune Brands (NYSE:FBIN)
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE:FBIN) makes plumbing, security, and outdoor living products.
Fortune Brands reported revenues of $1.16 billion, down 8.4% year on year. This print came in 6.9% below analysts' expectations. Overall, it was a softer quarter as it also logged a significant miss of analysts’ organic revenue estimates and a miss of analysts’ EPS estimates.
Fortune Brands had the weakest performance against analyst estimates among its peers. The stock is down 18.9% since reporting and currently trades at $68.33.
Read our full, actionable report on Fortune Brands here, it’s free.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $659.7 million, up 2.9% year on year. This print beat analysts’ expectations by 2.9%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The stock is up 4.2% since reporting and currently trades at $71.01.
Read our full, actionable report on Griffon here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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