Builders FirstSource Q1 sales up 11%
Despite facing weather-related issues, BFS grows sales 12.7% per day
Builders FirstSource reported first quarter 2018 net sales of $1.7 billion, up nearly 11% from net sales of $1.5 billion for the first quarter of 2017.
Weather-related facility closures impacted sales during the quarter, the Dallas, Texas-based pro dealer giant said. Sales per day grew 12.7% in the quarter, which was benefited by approximately 9.6% from the impact of commodity lumber price inflation on our sales and 3.1% from sales volume growth.
Sales volume per day, excluding commodity inflation, grew approximately 3.8% in the single-family homebuilding end market and 2.8% in the repair and remodeling/other end market, offset by expected declines in multifamily, BFS reported. Value-added products sales per day grew by 9.8%, including 8.9 percent in our windows, doors, and millwork category and 10.7% in manufactured products.
The dealer also reported a net income of $23.2 million for the quarter compared to a net income of $3.8 million for the same period last year.
“We continued our investments in manufacturing capacity and talent to drive enhanced growth in margin-accretive products and markets, as well as implementing our operational excellence plans, which are included in our longer-term strategy to generate significant EBITDA and cash flow,” said Chad Crow, CEO of Builders FirstSource.
Given the rising cost of lumber, company CFO Peter Jackson said, “Our team rapidly responded to the operational challenges caused by lumber and lumber sheet goods inflation during the current quarter, delivering strong operating results by focusing on disciplined cost and margin management. Commodity inflation generally benefits our business in the long term but can cause short term margin pressure when prices rise quickly.
Looking ahead, Crow hinted that there are expansion opportunities for BFS.
“I remain confident in the outlook for Builders FirstSource and our expanding opportunities for growth,” he said. “We believe demand in the housing industry remains on a solid trajectory.”
Slow growth for gardening hand tools
Long-handled tools are expected to lead the category, according to report.
Gardening hand tool sales are expected to reach $738 million in 2022, according to a recent report from market research firm The Freedonia Group.
Looking back, growth in the category grew only 0.6% annually between 2012 and 2017. Long-handled tools alone accounted for nearly half of total sales in 2017; combined with cutting tools, the two segments represented three-quarters of the total.
Also from The Freedonia Group’s report, “Lawn & Garden Hand Tools & Wheeled Implements in the U.S.,” the company expects demand for tools to increase 2.4% per year to $738 billion in 2022. Growth rates are relatively the same for all products, as hand tool sales tend to occur in lockstep. Consumers tend to purchase these products when needed — e.g., after moving into a new residence, when starting a new project or when an item breaks or is lost. Growth going forward will be reliant on an improving economy and weather across the United States.
Demand for long-handled tools is forecast to increase 2.3% per year to $349 million in 2022. Shovels and rakes generate the majority of category sales. Among other products, hoes account for a large portion of demand. Growth rates will be similar for all long-handled products, as shovels and rakes in particular are necessities for people with lawns and gardens. There is relatively little innovation in the segment, with most products seen as commodities by consumers.
Generac looks ahead to hurricane season
After a wind-damaged 2017, Hurricane Preparedness week is upon us.
With the 2018 hurricane season knocking on the door — and the extremely active 2017 season still fresh in mind — Generac Power Systems is urging homeowners to use Hurricane Preparedness week, May 6 to 12, to begin preparing before facing the specter of a tropical storm or hurricane.
“Preparation before storms arrive is absolutely critical,” said Russ Minick, chief marketing officer for Generac. “Once a storm is en route, the last thing you should have to worry about is how you will deal with a long-term power outage. Hurricane Preparedness Week is a good time to begin exploring your emergency power options, so you can invest in the system that best suits your needs in time to be ready for a storm.”
The 2017 hurricane season was the costliest on record, eclipsing more than $200 billion in damage. This isn’t surprising, because for the first time, three Category 4 hurricanes made landfall in United States territories. Hurricanes Harvey, Irma and Maria caused massive flooding, power outages and infrastructure damage. For 2018, the Department of Atmospheric Science at Colorado State University currently projects a slightly above-average season, with 14 named storms, seven hurricanes and three major (Category 3 or above) hurricanes.
In its most recent quarter, Generac posted a net sales gain of 20.3% to $397.6 million. Domestic segment sales increased 21.5% to $300.2 million.
“The fundamental demand environment for home standby and portable generators continues to be robust, benefitting from increased power outage activity in recent quarters contributing to excellent growth in both in-home consultations and end-user activations,” president and CEO Aaron Jagdfeld said.