Jeff Stevenson

Jeff Stevenson asked if Griffon observed any slowdown in the mid to high-end residential garage door market during the back half of the fiscal year, or if that segment remained resilient despite ongoing macroeconomic uncertainties. He also inquired if approximately a third of analyzed CPP revenues are still impacted by China-based tariffs, and if any adjustments were made to the sourcing strategy for lawn and garden or residential fan businesses during the latter half of the year.

Answer

Brian Harris, EVP and CFO, reported consistent volume on the high end of the residential garage door market, with weakness primarily observed on the low end. Regarding tariffs, he confirmed that Griffon has established alternate suppliers outside of China for its products. While China remains a substantial part of their sourcing under the current tariff policy, their global supply chain provides the flexibility to leverage alternative suppliers as needed.

Jeff Stevenson asked if Griffon observed any slowdown in the mid-to-high-end residential garage door market during the back half of the fiscal year, or if it remained resilient. He also inquired if the estimated one-third exposure of CPP revenues to China-based tariffs was still accurate and if any adjustments were made to the sourcing strategy, particularly for lawn and garden or residential fan businesses.

Answer

Brian Harris, EVP and CFO, stated that volume in the high-end residential garage door market remained consistent, with weakness observed primarily at the low end. Regarding tariffs, he confirmed that Griffon has established alternate suppliers outside of China for products over the past several months. While China remains a substantial part of sourcing under current tariff policy, the company's global supply chain allows flexibility to leverage alternative suppliers as needed.

Jeff Stevenson sought to understand the variance between residential installation and distribution pricing, asking if installation's better relative pricing is driven by builders' reliance on TopBuild's scale and service, and if elevated channel inventories in distribution are increasing competitive dynamics. He also inquired about the evolution of the roofing M&A pipeline since the Progressive Roofing acquisition and the expectation for accelerated bolt-on acquisitions in 2026.

Answer

Robert Buck (President and CEO) explained that installation benefits from bundled solutions, strong service, and builder relationships, which help maintain margins despite fiberglass pressure. In distribution, readily available material for residential products (fiberglass, spray foam) creates more competitive dynamics. Regarding roofing M&A, Robert Buck stated they are very active, leveraging both Progressive's industry relationships and broader connections, pursuing both smaller and larger acquisitions, with expectations for strong execution in 2026.

Representing Jeff Stevenson, Zack Pacheco of Loop Capital Markets asked how much of the negative mix was driven by production builders focusing on entry-level homes and inquired about the company's current stance on share buybacks.

Answer

CEO William Christensen confirmed that the shift by production builders to lower-end homes is a 'major driver' of the negative mix, particularly for the doors business. He also stated that share buybacks are 'definitely on the back burner' due to the company's leverage ratio being above its target and the immediate focus on funding its transformation through capital investments.