Q4 2023 Earnings Summary
Reported on Feb 18, 2025 (Before Market Open)
Pre-Earnings Price$68.69Last close (Feb 13, 2024)
Post-Earnings Price$71.97Open (Feb 14, 2024)
Price Change
$3.28(+4.78%)
- LPX expects volume growth in the Siding segment in 2024, indicating confidence in demand recovery and supporting revenue growth.
- Management anticipates incremental EBITDA margins to improve as the year progresses, reflecting operational leverage and efficiency gains.
- The company is investing in sales and marketing efforts focused on underpenetrated segments, such as new construction and repair and remodel, expected to create future demand and drive growth.
- LP projects Siding EBITDA margins of around 20% for 2024, which is lower than the mid-20% target, due to increased investments and carrying additional capacity. The fundamental drag on EBITDA margin is that they're running with one extra mill in the network, impacting margins until it can be filled with new high-priced product.
- The company expects increased investments in selling and marketing expenses, as well as SG&A, which may weigh on margins. They're planning a selling and marketing investment increase of $15 million to $20 million year-over-year, additional SG&A around $10 million, and anticipated inflation of about $20 million, potentially pressuring margins.
- The 'sheds' sector is currently the weakest part of LP's order file in the Siding segment, with some inventory build-up in the sheds channel that needs to be worked through, which could negatively impact near-term demand.