A sluggish housing market is taking a toll on Jeld-Wen Holdings (NYSE: JELD), and investors have no interest in waiting out a recovery. Shares of the construction products manufacturer traded down 21% as of 10:15 ET after the company lowered its full-year guidance.
An earnings beat on cost cuts
Jeld-Wen is a manufacturer of interior and exterior doors, windows, and related products for the new construction and remodeling industries. The company earned $0.21 per share in the quarter, beating the $0.18 per share consensus estimate, but revenue of $959.1 million was about $5 million below expectations.
Revenue was down 11% year over year due to lower volumes and pricing. The company saw similar declines in both North America and Europe, though operating margins in North America held up better than in Europe.
In April, the company announced it would close two window manufacturing facilities in response to shifting demand trends.
“We continue to execute on our transformation journey and position Jeld-Wen for improved performance,” CEO William J. Christensen said in a statement. “In the first quarter, despite the challenging demand environment, we made good progress on streamlining operations and improving customer experience.”
Is Jeld-Wen stock a buy?
The company lowered its full-year revenue guidance to $3.9 billion to $4.1 billion from $4 billion to $4.3 billion. Wall Street had been expecting $4.15 billion. Jeld-Wen also cut its full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance to $340 million to $380 million from $370 million to $420 million.
Higher interest rates are eating into housing sales and remodeling projects. There is little Jeld-Wen can do to offset the headwinds impacting its core market.
Jeld-Wen shares can increase as housing recovers or remodeling activity heats up. But with no clear indication of when that will happen, there is no reason for investors to rush in and buy this dip.
Should you invest $1,000 in Jeld-wen right now?
Before you buy stock in Jeld-wen, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Jeld-wen wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $544,015!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of May 6, 2024
Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Jeld-Wen Stock Is Crumbling Today was originally published by The Motley Fool