James Hardie Shares Plummet Over 34% on Weak Earnings
Building materials firm issues downbeat North American outlook, citing affordability issues and project delays.
Shares in James Hardie Industries plc (JHX) plunged more than 34% after the building materials supplier reported a steep drop in quarterly profit and warned of continuing challenges in the key North American construction market.
The company announced its net profit for the first quarter of fiscal year 2026 fell by 60% to $62.6 million. The sharp decline was attributed to a 9% fall in net sales to $899.9 million, as the company faced headwinds from moderating growth expectations and a normalization of channel inventories.
James Hardie, a leading manufacturer of fiber cement and other building products, said it is seeing homeowners delay large-scale remodeling projects, while “affordability is the key impediment” to new single-family home construction in North America. The North American market, which is the company's largest, saw a 12% decline in fiber cement net sales. The Asia Pacific region also experienced a 10% drop in sales, while the European building products segment was a bright spot with a 7% increase in sales.
The company’s adjusted EBITDA declined by 21% to $225.5 million. In light of the challenging market conditions, James Hardie adjusted its forecast, stating that the benefits from new product launches and recent homebuilder exclusivity wins are now expected to materialize in fiscal year 2027 and beyond, rather than in the latter half of the current fiscal year as previously anticipated.
The significant drop in share price reflects investor concern over the company's ability to navigate the current downturn in the housing market and the uncertainty surrounding the timeline for a recovery.