12:32 PM EDT, 05/07/2024 (MT Newswires) -- Builders FirstSource ( BLDR ) issued a downbeat second-quarter sales outlook on Tuesday amid headwinds in the multi-family market, as the company recorded mixed results year over year in the preceding three-month period.

The building product supplier anticipates sales to fall by a low-single-digit decline or be flat for the ongoing quarter, as "single-family growth is offset by expected multi-family headwinds," Chief Financial Officer Peter Jackson said during an earnings conference call, according to a Capital IQ transcript. The consensus on Capital IQ is for $4.79 billion, while the company recorded revenue of $4.53 billion in the 2023 second quarter.

Adjusted earnings before interest, taxes, depreciation and amortization are expected to be down high teens year-over-year in the second quarter, "primarily given the impact of continued multifamily normalization," according to Jackson. Shares of the company tumbled 16% in midday trading.

For the first quarter, Builders FirstSource's ( BLDR ) sales edged up 0.2% to $3.89 billion, ahead of the Street's view for $3.83 billion. "As we mentioned last quarter, inclement weather negatively impacted our operations in (the first quarter) by roughly 3% to 4% of our overall sales," Jackson said on the call. Adjusted earnings declined to $2.65 per share from $2.96, but topped analysts' $2.33 estimate.

Core organic sales were unchanged amid 13% and 4.7% declines in the multi-family and repair and remodel segments, respectively. Single-family gained 4.3% due to higher sales of early-stage homebuilding products, Jackson told analysts. Value-added products represented 52% of net sales during the quarter, reflecting customer demand for the company's high-margin products, the CFO said.

"As we expected, a weakening multi-family market and higher mortgage rates driving affordability challenges were headwinds to start the year," Chief Executive Dave Rush said in a statement. Gross margin weakened by 190 basis points to 33.4%, partly driven by a timing shift toward lower-margin, early-stage homebuilding products.

Selling, general and administrative expenses rose to $926.3 million from $904.2 million on a yearly basis, mainly due to additional costs from operations acquired within the last twelve months, the company said.

Builders FirstSource ( BLDR ) affirmed its full-year 2024 sales outlook of $17.5 billion to $18.5 billion, while the Street is looking for $17.95 billion. The company continues to project single-family starts to be up by a mid-single digit within its geographies, multi-family starts to fall 20% to 30% and repair and remodel to grow in the low-single-digit range.

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