NEW YORK - Griffon Corporation (NYSE: NYSE:GFF), a diversified management and holding company, reported a significant earnings beat for its fiscal 2024 second quarter, with adjusted earnings per share (EPS) of $1.35, outpacing the analyst consensus of $0.84. The company's revenue for the quarter was $672.9 million, also exceeding analyst expectations of $625.22 million.
Shares rose more than 3% in premarket trading Wednesday.
Griffon's robust performance in the second quarter represents a substantial improvement over the prior year's net loss.
The company's net income totaled $64.1 million, or $1.28 per share, a stark contrast to the previous year's net loss of $62.3 million, or -$1.17 per share. Adjusted net income for the current quarter was $67.5 million, compared to $66.9 million in the prior year quarter, reflecting a YoY increase in adjusted EPS from $1.21 to $1.35.
The company's Chairman and CEO, Ronald J. Kramer, attributed the strong quarter to the strength of residential volume in Griffon's Home and Building Products (HBP) segment. He also noted the improved profitability in the Consumer and Professional Products (CPP) segment following the completion of U.S. facility closures.
Kramer expressed confidence in the company's long-term target of a 15% segment EBITDA margin for CPP.
In light of the strong year-to-date performance and positive expectations for the second half of the year, Griffon has raised its full-year segment EBITDA guidance to $555 million from $525 million. This updated guidance surpasses analyst projections for FY2024 revenue, with Griffon now expecting $2.65 billion compared to the consensus of $2.62 billion.
Griffon's second-quarter revenue, however, marked a 5% decrease from the $711.0 million reported in the same quarter last year. The HBP segment's revenue decreased by 1%, primarily due to an unfavorable product mix, while the CPP segment experienced an 11% decline due to reduced consumer demand in North America and the U.K.
Despite these challenges, the company's adjusted EBITDA for the quarter was $134.2 million, only a slight 2% decrease from the prior year's $136.9 million.
The company also demonstrated its confidence in its strategic plan and outlook through the repurchase of more than 1.8 million shares at an average price of $65.09 per share during the fiscal second quarter.
As Griffon continues to navigate market conditions, it has announced an expansion of CPP's global sourcing strategy, which is expected to be complete by the end of calendar 2024 and remains on budget. This move is designed to enhance the segment's EBITDA margins and improve free cash flow.
Griffon Corporation's financial position remains solid, with cash and equivalents of $123.0 million and a net debt to EBITDA leverage ratio of 2.8x. The company's capital expenditures for the quarter were $18.5 million.
Investors and analysts will be closely monitoring Griffon's progress as it continues to implement its strategic initiatives and capitalize on market opportunities.
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