Executive Summary

Q4 2024 came in softer than expected: net sales $667.7M (-1% YoY), diluted EPS $0.11, and adjusted EBITDA $74.6M (11.2% margin), with pressure from a 6% volume decline and 4% net ASP decline in legacy business; Supreme contributed +9% to net sales .
Management attributed the miss to holiday-period R&R weakness, negative mix toward lower price points, and slower price realization amid persistent cost inflation; February demand and ASP showed improvement back to “normal” levels, supporting 2025 seasonality assumptions .
Company issued 2025 outlook: mid-single-digit net sales growth (organic flat; acquisition mid-single digits), adjusted EBITDA $380–$410M (13.5%–14.3% margin), adjusted EPS $1.40–$1.57, capex $85–$95M, tax ~25%, interest $68–$73M; guidance excludes not-yet-effective tariff impacts .
Notably, FY24 adjusted EBITDA landed at $363.6M, below the Q3 reiterated guidance of $385–$405M, as Q4 demand/price realization lagged; management is prioritizing cost actions while preserving Tech Enabled growth investments in 2025 .
Potential catalysts: recovery in R&R momentum into spring/summer, execution on price/cost catch-up, Supreme synergy realization, and capital allocation (new $50M buyback authorization announced Mar-17, 2025) .

What Went Well and What Went Wrong

What Went Well
- Supreme acquisition performed in line and added +9% to Q4 net sales; overall acquisition contributed 4% to FY24 net sales and ~6 pts to FY24 adjusted EBITDA .
- Free cash flow remained strong: Q4 FCF ~$69M; FY24 FCF $211.1M, with emphasis on cash conversion and working capital improvements; goal remains FCF > net income in 2025 .
- Management maintained momentum in Tech Enabled (cloud migration, near real-time data, MasterBrand Connect); plans +$15M incremental investment in 2025 to stimulate demand via channel insights .
- Quote: “We delivered another strong quarter of free cash flow at $69 million… in line with our stated goal of free cash flow in excess of net income…” .
- Quote: “Tangible incremental savings in quality and CI this year give us the confidence to continue investing in [Tech Enabled]…” .
- Quote: “Supreme continues to perform well and in line with our expectations.” .
What Went Wrong
- R&R deterioration late in Q4 drove a 6% legacy volume decline, negative mix (pressure on ASP), and slower price realization; gross margin fell 250 bps YoY to 30.4% .
- Adjusted EBITDA margin contracted 150 bps to 11.2% on negative price/cost, volume, and incremental investments; Q4 diluted EPS fell to $0.11 vs $0.28 LY .
- FY24 missed the Q3 reiterated adjusted EBITDA guide ($385–$405M) with actual $363.6M, reflecting Q4 softness and timing of price realization .
- Analyst concerns focused on pricing cadence (delays in opening price points), mix shift to lower price points, and quantification/timing of cost savings versus sustained Tech Enabled spend .

Financial Results

Sequential (Q2 → Q3 → Q4 2024)

Metric	Q2 2024	Q3 2024	Q4 2024
Net Sales ($M)	$676.5	$718.1	$667.7
Gross Margin %	34.1%	33.1%	30.4%
Adjusted EBITDA ($M)	$105.1	$104.5	$74.6
Adjusted EBITDA Margin %	15.5%	14.6%	11.2%
Diluted EPS (GAAP)	$0.35	$0.22	$0.11
Adjusted Diluted EPS	$0.45	$0.40	$0.21

Year-over-Year (Q4 2024 vs Q4 2023)

Metric	Q4 2023	Q4 2024
Net Sales ($M)	$677.1	$667.7
Gross Margin %	32.9%	30.4%
Adjusted EBITDA ($M)	$85.8	$74.6
Adjusted EBITDA Margin %	12.7%	11.2%
Diluted EPS (GAAP)	$0.28	$0.11
Adjusted Diluted EPS	$0.35	$0.21

Q4 2024 revenue bridge (YoY)

Driver	Contribution
Volume	-6%
Net ASP (price/mix/other)	-4%
Acquisition (Supreme)	+9%
FX	~0%

Key KPIs (FY 2024 unless noted)

KPI	Value
Operating Cash Flow	$292.0M
Capital Expenditures	$80.9M
Free Cash Flow	$211.1M
Net Debt (12/29/24)	$887.2M
Net Debt / Adj. EBITDA (TTM)	2.4x
Q4 Effective Tax Rate	29.3%
Diluted Shares (Q4)	131.2M

Non-GAAP adjustments (Q4 2024)

Item	Q4 Amount
Acquisition-related costs	$6.0M
Amortization	$6.5M
Restructuring	$7.0M
Gain on sale of asset	($4.3M)
Actuarial/settlement charges	$2.7M
Tax impact of adjustments	($4.5M)
Adjusted Diluted EPS	$0.21

Estimates (consensus) comparison

S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA) were unavailable at time of analysis due to data access limits; therefore, “vs estimates” comparisons are not presented. We attempted to retrieve “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and “EBITDA Consensus Mean” from S&P Global but hit a daily request limit.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales growth	FY2025	N/A (new)	Mid single-digit increase; organic flat; acquisition mid single-digit increase	New
Adjusted EBITDA	FY2025	N/A (new)	$380–$410M; margin ~13.5%–14.3%	New
Adjusted Diluted EPS	FY2025	N/A (new)	$1.40–$1.57	New
Interest expense	FY2025	N/A (new)	~$68–$73M	New
Effective tax rate	FY2025	N/A (new)	~25%	New
Capex	FY2025	N/A (new)	$85–$95M	New
FCF vs Net Income	FY2025	N/A (new)	FCF expected > Net Income	New
Tariffs in guidance	FY2025	N/A (new)	Only tariffs in effect included; not-yet-effective tariffs excluded	New
FY2024 Adjusted EBITDA	FY2024	$385–$405M (Q3 guide)	Actual: $363.6M	Missed prior FY24 guide

Additional context on tariff sensitivity (COGS mix and sourcing) provided with the outlook: COGS ~45–55% materials, 15–25% labor, 25–35% overhead; 70–80% materials domestically sourced; ~15–20% from Asia (mostly Vietnam), low single digits from China; finished goods from Canada/Mexico → slightly >10% of consolidated net sales; potential tariff remediation may require wide-ranging mid-single-digit price increases on average .

Earnings Call Themes & Trends

Topic	Q2 2024 (two quarters ago)	Q3 2024 (prior quarter)	Q4 2024 (current)	Trend
Tech Enabled / digital	Margin expansion; continued investment; revised adj EPS adds back amortization; increasing 2024 outlook post-Supreme	Ongoing rollout incl. MasterBrand Connect; CI savings; tools for channel partners	Plan +$15M incremental spend in 2025; tangible savings; closer to end consumer to stimulate demand	Increasing investment, early benefits
Pricing realization	Q2 headwinds from trade-down/promotions but GM +10 bps YoY; pricing actions underway	Pricing benefits expected in Q4; competitive R&R/promotions still normal	Q4 delay in realization; negative price/cost; dealer network realized faster but volumes weak; improvement expected as 2025 progresses	Slower than planned, improving into 2025
End market R&R	Mixed; organic decline LS-digit guided	R&R down mid-single digits for 2024; choppy demand	Holiday-induced slowdown; February back to “normal” cadence; 2025 R&R down mid- to low-single digits	Weak but stabilizing from Feb
New construction	Relatively resilient; builder wins	Mid-single digit market growth; some air pocket risk ahead	Spec inventory high → early 2025 softness, then improvement; 2025 new construction flat to down LSD	Soft early 2025, improving later
Tariffs / sourcing	Not highlighted	Not highlighted	Guidance excludes not-yet-effective tariffs; COGS and sourcing detail; plan to mitigate via alternatives and pricing	New risk disclosure
Supreme integration	Closed in July; guide raised	Integration on track; Waterloo consolidation; synergy cadence	+9% to Q4 sales; cost synergies on track; modest 2025 commercial synergies	On plan

Management Commentary

“End market choppiness increased throughout the holiday season resulting in unanticipated volume declines which delayed the realization of previously implemented price increases and limited our ability to sufficiently flex operations in the quarter.” — CEO Dave Banyard, press release .
“We delivered another strong quarter of free cash flow at $69 million, bringing our full year 2024 total to $211 million… in line with our stated goal of free cash flow in excess of net income…” — CEO Dave Banyard, prepared remarks .
“We expect adjusted EBITDA in the range of $380 million to $410 million with adjusted EBITDA margins of roughly 13.5% to 14.3% for 2025… interest expense ~$68–$73 million, and… effective tax rate ~25%.” — CFO Andi Simon .
“Our outlook only contemplates the tariffs in effect as of the issuance of our earnings release… wide-ranging price increases… averaging in aggregate to approximately mid-single digits [may be needed].” — CFO Andi Simon .

Q&A Highlights

Sequential cadence and 2025 shape: January was soft, but February recovered to Q3/early Q4 pace; expect normal seasonality with some Q1 pressure, stronger Q2–Q3, and a better Q4’25 vs Q4’24 .
Pricing: Delays primarily in opening price point products and non-dealer channels; negative price/cost likely persists in Q1 before improving through 2025 as price flows through .
Mix: Negative mix toward opening price point products weighed on ASP and plant efficiency; made-to-order volumes were light, pressuring efficiencies .
Supreme: More resilient through the late-Nov–Jan period; seasonally light in Q4/Q1 but performed as expected .
Cost actions: Headcount and discretionary spend reductions implemented to offset continued Tech Enabled investments; targeting savings roughly equivalent to incremental tech spend .

Estimates Context

S&P Global consensus for Q4 2024 EPS, revenue, and EBITDA was unavailable at time of analysis due to access limits; therefore, explicit “vs estimates” comparisons are not included. We attempted to retrieve “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and “EBITDA Consensus Mean” via S&P Global but hit a daily request limit.
Implication: Without consensus, we focus on “vs prior year/quarter” and “vs prior guidance” (FY24), which the company missed largely due to R&R softness, negative mix, and slower price realization in Q4 .

Key Takeaways for Investors

Q4 headwinds from big-ticket R&R drove margin and EPS compression; mix and pricing cadence were the main issues, but February green shoots suggest stabilization into spring .
2025 guidance embeds cautious end-market assumptions (R&R down MSD/LSD, new construction flat to down LSD) yet targets mid-single-digit net sales growth (acquisition-led) and margin stabilization/expansion via cost actions and CI savings .
Supreme integration remains on track, adding growth and synergy potential; modest commercial synergies in 2025 with broader upside as dealer onboarding progresses .
Watch price/cost trajectory: management expects negative price/cost in Q1 with improvement as the year progresses; stronger ASP in February is an early positive signal .
Tariff uncertainty is excluded from guidance; management outlined sourcing exposure and contingency plans; potential for price increases averaging mid-single digits to offset impacts if enacted .
Capital allocation: robust FCF, leverage 2.4x, and a new $50M repurchase authorization (Mar-17, 2025) add support; near-term Q1 cash usage expected due to bond interest/taxes/integration .
Medium-term thesis: scale, multi-brand/channel positioning, and Tech Enabled initiatives aim to drive share gains and structural efficiency, positioning the company for outsized earnings power when end markets normalize .

Additional Relevant Documents (Q4 timeframe and subsequent)

Q4 2024 Earnings Press Release (8-K Item 2.02; includes EX-99.1 and investor presentation EX-99.2) -.
Q4 2024 Earnings Call Transcript (prepared remarks and Q&A) - (duplicate provider version also reviewed -).
Prior quarters for trend: Q3 2024 earnings call and 10-Q (Q3 transcript data used) -; Q2 2024 earnings press release (8-K) -.
Subsequent capital allocation: Additional $50M share repurchase authorization (3/17/2025 8-K) .

MasterBrand, Inc. (MBC)·Q4 2024 Earnings Summary