GMS Posts Steady, but Slower, Sales Growth in Fiscal 2Q - Modern Distribution Management

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GMS Posts Steady, but Slower, Sales Growth in Fiscal 2Q

Net sales increased 24.4% over the second-quarter of last fiscal year but were down from the 30.5% year-over-year increase in FY '23's 1Q.

On Dec. 8, Tucker, Georgia-based Gypsum Management & Supply Inc. reported fiscal 2023 second-quarter net sales of $1.43 billion, a 24.4% increase over the same quarter in fiscal 2022 but a decelerated pace from the 30.5% annual increase seen in the prior quarter.

Organic net sales for FY 2023 2Q increased 22.2%, down from a growth of 24.1% the prior quarter.

For 2Q, there was 11.6% volume growth in wallboard, including the second consecutive quarterly year-over-year expansion in commercial wallboard volume. Net income for the quarter was $103.2 million, or $2.41 per diluted share, which increased 38.7% compared to net income of $74.4 million, or $1.69 per diluted share, in the prior-year quarter.

Year-over-year 2Q sales increases by product category included:

  • Wallboard sales of $584.6 million increased 41.0% (up 41.4% on an organic basis).
  • Ceilings sales of $159.6 million increased 13.3% (up 13.6% on an organic basis).
  • Steel Framing sales of $278.2 million increased 2.3% (up 2.5% on an organic basis).
  • Complementary Product sales of $408.7 million increased 26.5% (up 17.8% on an organic basis).

GMS ranks No. 8 on MDM’s 2022 Top Building Materials/Construction Products Distributors list.

“A significant backlog of homes under construction, continued strength in multi-family, and improving levels of commercial activity helped drive exceptional results for our fiscal second quarter,” said John C. Turner, Jr., President and Chief Executive Officer of GMS. “As a result, with favorable pricing across our product categories, positive volume growth in Wallboard, Ceilings and Complementary Products and the benefit of our AMES acquisition, our team achieved another quarter of record levels of net sales, net income and Adjusted EBITDA and generated significant levels of cash flow.”

Gross profit in 2Q was $464.5 million, an increase of 24.9% compared to the second quarter of fiscal 2022 primarily due to the “successful pass through of product inflation, continued strength in residential market demand, improving commercial sales, and incremental gross profit from acquisitions,” GMS said.

“With significant scale, a balanced mix of commercial and residential customers and a wide breadth of product offerings, we are confident in our ability to adjust as needed to meet demand in all of our end markets and believe we are well-positioned ahead of the developing slowdown in residential single-family construction,” Turner said. “We remain focused on the execution of our strategic priorities to expand share in our core products, grow Complementary Product offerings, expand our platform, and leverage our scale to achieve improved productivity and profitability through the use of technology and shared best practices.”

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