GMS Inc. ( GMS ) saw its stock gain in premarket trading on Wednesday after announcing fourth-quarter fiscal 2025 results that surpassed analyst expectations.

Topping analyst estimates of $1.30 billion, the company announced quarterly net sales of $1.33 billion, a 5.6% decrease from a year ago.

On an organic basis, net sales saw a 9.7% decline. On a per-day basis, net sales were down 4.1%, and organic sales dropped 8.3%.

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The decline was driven by softer end-market conditions, though resilient pricing in Wallboard, Ceilings, and Complementary Products helped offset some of the impact, the company said in a press release.

Steel price deflation reduced net sales by an estimated $22 million for the quarter. 

The specialty building products distributor’s adjusted EPS of $1.29 was above the consensus of $1.11.

In the fourth quarter, Wallboard sales fell 10.1% to $526.6 million, Steel framing dropped 14.2% to $189.2 million, and Complementary products slipped 0.2% to $416.9 million. Ceilings rose 6.4% to $201 million.

Gross profit fell 7.7% to $416.2 million, with margins down 70 basis points to 31.2%. The decline was driven by lower vendor incentives due to reduced volumes, while pricing remained generally stable. Steel framing pricing remained a headwind.

The company’s adjusted EBITDA dropped to $109.8 million from $146.6 million, with margin down 220 basis points to 8.2%.

As of April 30, GMS had $55.6 million in cash, $1.3 billion in debt, and $631.3 million in available liquidity. Net leverage rose to 2.4x from 1.7x a year ago.

The company generated $196.8 million in operating cash flow and $183.4 million in free cash flow. It repurchased 348,599 shares for $26.4 million, with $192 million remaining under its buyback authorization.

On June 2, 2025, GMS expanded its Complementary Products line with the acquisition of Lutz Company, a Minneapolis-area EIFS and insulation distributor.

In addition, the company also opened new greenfield locations in Owens Sound, Ontario, in March and Nashville, Tennessee, in June to boost service and market reach.

“We reported solid results for our fourth quarter and full-year fiscal 2025 despite the deterioration in end-market conditions as we moved through the year,” commented John C. Turner, Jr., president and CEO of GMS, regarding the company’s performance.

“The ongoing challenging interest rate environment and general market uncertainty continue to be a headwind for the business, contributing to reduced levels of activity in each of our major end markets. Despite these pressures, we reported $1.33 billion in net sales for the fourth quarter and achieved volume growth for the quarter in Ceilings and Complementary Products, with resilient or expanded pricing in all major product categories except for Steel Framing.”

Turner continued, “As we begin fiscal 2026, we are cautiously optimistic that we are nearing the bottom of this cycle and believe pent-up demand will materialize as the macro-environment improves. Once this market demand returns, we will be well positioned to capture the opportunity as a leaner and more efficient organization.”

Price Action: GMS shares are trading higher by 9.11% to $79.90 premarket at last check Wednesday.

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