What Happened?
Shares of building products manufacturer JELD-WEN (NYSE:JELD) fell 17.7% in the morning session after the company reported weak fourth-quarter results and provided full-year revenue and EBITDA guidance below Wall Street's estimates. Revenue fell 12.3% y/y, reflecting weaker market demand and a shift toward lower-priced products.
Margins deteriorated, with adjusted EBITDA margin shrinking significantly as higher labor and materials costs outweighed efficiency gains. Looking ahead, the company expects another challenging year, guiding for a revenue decline of 4% to 9% and EBITDA between $215 million and $265 million, well below consensus estimates.
On the other hand, JELD blew past analysts' organic revenue and EBITDA expectations this quarter. Overall, this was a softer quarter due to the outlook.
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What The Market Is Telling Us
JELD-WEN’s shares are very volatile and have had 20 moves greater than 5% over the last year. But moves this big are rare even for JELD-WEN and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 31.1% on the news that the company reported weak third-quarter earnings. Revenue and EPS in the quarter missed by a meaningful amount. Sales fell 13% year on year due to weaker market demand and a shift to entry-level products.
Looking ahead, full-year revenue and EBITDA guidance were lowered and also missed. Overall, this was a very bad quarter, and we noticed that a number of names with exposure to the US housing market also reported mediocre results, showing that consumer confidence is still shaky and that recent changes in the interest rate environment are not yet moving people from the sidelines.
JELD-WEN is down 10.3% since the beginning of the year, and at $7.25 per share, it is trading 66.2% below its 52-week high of $21.42 from April 2024. Investors who bought $1,000 worth of JELD-WEN’s shares 5 years ago would now be looking at an investment worth $325.05.
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