James Hardie Raises Full-Year Outlook as Siding Sales Climb
The building materials maker reported first-quarter net sales of $1.475 billion, a 64% increase from the prior year.
James Hardie Industries (JHX), the building materials maker, reported a significant increase in first-quarter net sales to $1.475 billion. The result represents a 64% increase from the $899.9 million reported in the first quarter of the prior year, while pro forma net sales rose 12%.
The company's performance was characterized by a sharp rise in profitability and a shift in its reporting metrics. Adjusted EBITDA rose 79% year-over-year to $422.1 million from $236.4 million. The Adjusted EBITDA margin expanded 230 basis points to 28.6%. Starting this quarter, the company revised its definition of Adjusted EBITDA to exclude share-based compensation costs to better align with peer comparability.
Growth was led by the Siding & Trim segment, where net sales increased 34% to $860 million. This result was driven by a 20% organic increase, resulting from low-double-digit volume growth in North American fiber cement. The segment's Adjusted EBITDA margin expanded 140 basis points to 33.5%.
Other regional and product lines showed mixed results. Net sales in Australia & New Zealand increased 26% year-over-year, or 14% in local currency. However, the EBITDA margin in that region decreased 50 basis points to 34.9% due to R&D expense allocations and a fuel levy. In Europe, net sales rose 15% year-over-year, or 12% in Euros, while the EBITDA margin expanded 340 basis points to 19.4%.
Performance in the Deck, Rail & Accessories segment diverged from the broader trend. Net sales in that division decreased 5% on a pro forma basis. The decline was the result of a planned reduction in shipments and production to align channel inventory with current demand.
Based on the quarter's results, the company raised its full-year FY27 outlook. It now targets pro forma sales growth between 5.9% and 9.0%, and pro forma Adjusted EBITDA growth between 7.4% and 13.7%.
Cash flow and capital management activities remained active during the period. Free cash flow for the first quarter was $254.2 million, more than double the amount recorded in the prior year. Additionally, the company redeemed $400 million of 5.00% Senior Unsecured Notes due 2028 on June 25, 2026.