• Total Net Sales: $953 million, a 3% decrease from the previous year.
• Adjusted EBITDA: $262 million with a margin of 27.5%, down 120 basis points year-over-year.
• Adjusted Net Income: $154 million.
• Adjusted Diluted EPS: $0.36 per share.
• North America Volume: 744 million standard feet shipped.
• North America EBIT Margin: 29.1%, down 360 basis points year-over-year.
• North America EBITDA Margin: 34.8%, down 250 basis points year-over-year.
• Asia Pacific Net Sales: Declined 12% in US dollars, with a 28% decrease in volumes.
• Asia Pacific EBITDA Margin: 33.5%, increased 290 basis points.
• Europe Net Sales: Declined 1% in both US dollars and euros.
• Europe EBITDA Margin: 10.3%, down 260 basis points.
• Operating Cash Flow: $657 million year-to-date.
• Capital Expenditures: $333 million year-to-date.
• Share Repurchases: $150 million year-to-date, with a new $300 million repurchase program approved.

• Warning! GuruFocus has detected 8 Warning Signs with CLPR.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• James Hardie Industries PLC (NYSE:JHX) delivered strong business and financial results in the third quarter, with sales year to date exceeding $2 billion, representing a double-digit CAGR over the last five years.
• The company achieved a 29.1% EBIT margin in North America, demonstrating its ability to deliver savings through the Hardie Operating System initiatives.
• James Hardie Industries PLC (NYSE:JHX) continues to strengthen its competitive position by deepening existing partnerships and forging new ones, such as the exclusive agreement with M/I Homes.
• The company is investing across the value chain, growing its contractor base, and accelerating homeowner demand to capture the repair and remodeling opportunity.
• James Hardie Industries PLC (NYSE:JHX) is planning for sales growth and adjusted EBITDA margin expansion across each of its segments for FY26, indicating confidence in future performance.

Negative Points

• Business conditions remain challenging with high interest rates presenting a barrier to homeowners, affecting demand in both new construction and repair and remodel markets.
• The company faced raw material headwinds, particularly with significant increases in pulp and cement costs, which impacted margins.
• Net sales in the third quarter were 3% below the previous year's record, and total adjusted EBITDA declined by 7%, with margins decreasing by 120 basis points.
• In Europe, markets remain challenged, particularly in Germany, with a more gradual path to recovery expected.
• The Asia Pacific segment saw a 28% decrease in volumes, primarily due to the cessation of operations in the Philippines, impacting overall segment performance.

Q & A Highlights

Q: Aaron, if we face another challenging 12 months, is there a point where you have to choose between investing in share growth and maintaining near-term margins? A: Aaron Erter, CEO: We've demonstrated our ability to balance growth initiatives with maintaining margins. We prioritize investments in customer relationships and safety, and our Hardie Operating System (HOS) helps us achieve efficiency without sacrificing long-term growth.

Q: Rachel, can you clarify your approach to the share buyback program? A: Rachel Wilson, CFO: Share repurchases are a key capital allocation priority after funding growth and maintaining a strong balance sheet. Our current program allows for up to $300 million in repurchases through October 2025, and we have already repurchased $150 million this year.

Q: Aaron, can you provide more details on the progress of the ColorPlus product line? A: Aaron Erter, CEO: Despite a challenging market, we're seeing positive results from our marketing efforts and investments in ColorPlus, particularly in the repair and remodel (R&R) segment. Remodeling sentiment has improved, and we're positioned to outperform the market as it recovers.

Q: Rachel, what is driving the high single-digit cost inflation for FY26, and how will HOS savings offset this? A: Rachel Wilson, CFO: Key drivers include cement, alumina, and resins. We expect HOS savings to fully offset this inflation, as it is ingrained in our culture and helps us manage costs efficiently.

Q: Aaron, how do you anticipate the R&R market, especially with the introduction of the architectural panel product? A: Aaron Erter, CEO: We're confident in our R&R strategy and investments. The architectural panel product is part of our solution-based approach, offering high-value options to customers and helping us penetrate the upper end of the market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.