Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on your fiscal year '25 assumption for mid-single-digit sell-through growth, particularly in terms of deck versus exterior? A: Jesse Singh, CEO, explained that the 5% growth assumption is based on a zero-growth market, with an intent to drive growth above that. While not specifically parsing out between deck and exterior, historically, both have been relatively similar, with decking being modestly higher recently. Channel sentiment is positive, and they expect a normal progression through 2025.
Q: How will SG&A expenses evolve with new product launches and distribution efforts? A: Peter Clifford, CFO, noted that they plan to continue investing in growth opportunities, supported by strong gross margin execution. Jesse Singh added that new product launches are embedded in their SG&A strategy, and while activity is higher this year, it aligns with their ongoing investment approach.
Q: What factors could drive a recovery in the R&R market, and how might decking outperform broader R&R? A: Jesse Singh highlighted their growth thesis, which includes R&R, material conversion, and outdoor living emphasis, alongside company-specific initiatives. While they prudently assume a flat R&R market, historical trends and third-party insights suggest potential for increased growth, with decking historically outpacing broader R&R.
Q: How are sales trending by price point within your good, better, best category framework? A: Peter Clifford stated that there hasn't been a significant mix down, with premium category growth rates remaining robust. The "good" category is growing modestly faster, attributed to share pickup, as they re-entered the entry price point with Prime and Prime Plus products.
Q: Can you discuss the impact of your distribution expansion in Canada and the partnership with Capital Lumber in the West? A: Jesse Singh explained that the expansion with Doman in Canada provides double distribution and access to Western Canada, while the Capital Lumber partnership enhances downstream focus. They expect some benefit in the first half of the year from Western distribution expansion, potentially adding $10 million in volume.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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