Simpson Manufacturing sales down 1%
Rising raw material costs and slower than expected U.S. housing starts have driven Simpson Manufacturing to adjust its 2020 Plan targets.
The company still expects it will achieve organically a net sales compound annual growth rate of approximately 8% from $860.7 million reported in fiscal 2016 through fiscal 2020. But the consolidated operating margin forecast was revised downward from about 21%, to a range to 16% to 17%.
The company’s share price fell almost 10% following the earnings report. (It rebounded more than 4% on Wednesday.)
“The macro landscape has changed over the past seven quarters with tariffs and trade uncertainties contributing to a global growth slowdown,” said CEO Karen Colonias.
Total sales for the company were $304.9 million, down 1%. North American sales were down 0.3%. As market demand declined, the company said it believes it has not lost share in its core wood connector business.
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The bottom line: Net income for the three quarters ended June 30 was $39.6 million, down from $44.1 million in the same quarter last year.
What the CEO said: of Simpson Manufacturing Co., Inc. "U.S. housing starts remained soft throughout the first half of the year due to unusually wet and cold weather conditions across the U.S,” said Karen Colonias, president and CEO. “This impacted sales volume as it relates to our wood products and offset any positive benefit we received from higher selling prices following the July 1, 2018 price increase we enacted in response to rising raw material costs. In addition, U.S. housing starts in the second quarter of 2018 were very strong, with the south and west up 14% and 8% year-over-year, respectively, compared to the south up only 5% and the west down 6% year-over-year in the second quarter of 2019."
More company information: Read the full earnings release here.
The company still expects it will achieve organically a net sales compound annual growth rate of approximately 8% from $860.7 million reported in fiscal 2016 through fiscal 2020. But the consolidated operating margin forecast was revised downward from about 21%, to a range to 16% to 17%.
The company’s share price fell almost 10% following the earnings report. (It rebounded more than 4% on Wednesday.)
“The macro landscape has changed over the past seven quarters with tariffs and trade uncertainties contributing to a global growth slowdown,” said CEO Karen Colonias.
Total sales for the company were $304.9 million, down 1%. North American sales were down 0.3%. As market demand declined, the company said it believes it has not lost share in its core wood connector business.
# # #
The bottom line: Net income for the three quarters ended June 30 was $39.6 million, down from $44.1 million in the same quarter last year.
What the CEO said: of Simpson Manufacturing Co., Inc. "U.S. housing starts remained soft throughout the first half of the year due to unusually wet and cold weather conditions across the U.S,” said Karen Colonias, president and CEO. “This impacted sales volume as it relates to our wood products and offset any positive benefit we received from higher selling prices following the July 1, 2018 price increase we enacted in response to rising raw material costs. In addition, U.S. housing starts in the second quarter of 2018 were very strong, with the south and west up 14% and 8% year-over-year, respectively, compared to the south up only 5% and the west down 6% year-over-year in the second quarter of 2019."
More company information: Read the full earnings release here.