Charles Perron-Piché • Goldman Sachs

Answer

CFO Oliver Gloe noted the liners business grew 6% YoY, with the measurement tool being a key contributor, but declined to quantify its specific impact. CEO Scott Rajeski added that auto covers are a core part of the growth algorithm, with high take rates where they can replace fences. Gloe reiterated that capital allocation priorities remain: 1) organic investment, 2) M&A, and 3) debt repayment.

Ask Fintool Equity Research AI

Answer

President, CEO & Chairman Karl Glassman and EVP & CFO Benjamin Burns addressed the questions. Glassman noted consumer health appears more positive than three months prior, driven by strong holiday promotions, though tariff-related inflation remains a risk. He affirmed the company has pricing power to pass through tariff costs. Burns then provided a detailed full-year outlook for sales, volume, and operating margins for the Bedding, Specialized Products, and Furniture, Flooring & Textile Products segments.

Ask Fintool Equity Research AI

Answer

CEO Peter Jackson explained that while productivity work continues, the P&L benefit is being offset by deleverage from lower sales volumes. CFO Pete Beckmann added that facility closures are part of ongoing operational management. On digital, Jackson stated that while adoption continues, it's slower than anticipated as smaller builder customers are focused on survival, but he remains convicted in the long-term strategy of using technology to improve efficiency.

Ask Fintool Equity Research AI

Answer

CFO Pete Beckmann noted that while lumber prices are up, depressed OSB prices are pulling the overall commodity composite down. CEO Peter Jackson clarified that Canadian lumber is exempt from recent tariffs but subject to existing duties. Regarding digital tools, Jackson expressed confidence in hitting the target, citing strong customer reception, a focused internal rollout, and the stable performance of their target audience of smaller builders.

Ask Fintool Equity Research AI

Answer

CEO Peter Jackson confirmed that multifamily sales declines disproportionately impact value-add products, which is factored into the guide. Regarding policy, he stated that while higher tariffs and tighter labor would be net negatives for housing starts, the company's value-added offerings would be advantaged in a labor-constrained environment.

Ask Fintool Equity Research AI

Answer

CFO John Guthrie stated that there are not significant mitigation actions for tariffs other than passing through costs, which is standard in the market. CEO Doug Black added that the market remains rational but competitive, with no major changes in competitor behavior. Regarding freight, Black highlighted significant savings opportunities in customer delivery, noting a 40 basis point improvement on delivered sales in H1 driven by efficiency gains from their DispatchTrack system, with more progress expected over the next few years.

Ask Fintool Equity Research AI

Answer

Executive Vice President John Guthrie stated that the company has been selective in its pre-buying of inventory, focusing on specific at-risk products to secure supply and mitigate disruption. On capital allocation, Guthrie affirmed that while strategic acquisitions remain the primary focus, share repurchases have become more attractive at current stock price levels. He stressed the importance of maintaining a strong balance sheet to support both growth and shareholder returns.

Ask Fintool Equity Research AI

Answer

CEO Doug Black detailed several growth drivers, including programs for small and Hispanic customers, private label product expansion, and a 180% increase in digital sales. He expressed strong confidence in returning to double-digit EBITDA margins, driven by these initiatives, organic growth, and significant performance improvements expected from underperforming branches.

Ask Fintool Equity Research AI

Answer

CEO Phillippe Lord stated that their strategy remains consistent: to compete with resale by offering reliable, market-rate commissions rather than making reactive changes. CFO Hilla Sferruzza added that resale inventory is not always a direct competitor. On costs, she noted that Q3 guidance reflects current costs, tariffs have not been a material issue, and while there is potential for future savings, none are currently modeled.

Ask Fintool Equity Research AI

Answer

CEO Phillippe Lord affirmed they would not pull back on new community openings, which are additive to sales. The strategy remains to target 4 net sales per month and then optimize returns, using incentives as needed. To mitigate tariff risks, he said the plan is to overcommunicate with vendors and leverage their spec-building model, which allows for substitute products, providing operational flexibility.

Ask Fintool Equity Research AI

Answer

CEO Joseph Hayek clarified that the specific new products mentioned (like the Balloon Time mini tank) had minimal contribution in Q3 as they are just launching, but they are expected to add to revenue and margin going forward. He explained that growth in newer businesses like Tools and Grills is focused on taking market share, while legacy businesses focus on product innovation. Hayek reiterated the long-term goal of pushing gross margins toward 30% and SG&A toward 20% of sales. Regarding M&A, he noted the pipeline is healthy and the company maintains a long-term view, assessing opportunities despite current market uncertainty.

Ask Fintool Equity Research AI