GMS Inc. (NYSE:GMS), a leading distributor of specialty building materials, announced its fiscal fourth-quarter 2025 results on Wednesday, revealing a mixed performance amid persistent challenges in its core markets.
The company posted adjusted earnings per share of $1.29, comfortably beating analyst expectations of $1.11. However, quarterly revenue fell short, coming in at $1.33 billion, missing the projected $1.43 billion. In premarket trading, GMS shares edged up by 0.10%.
Revenue declined 5.6% year-over-year, or 4.1% on a same-day basis, reflecting waning demand across end markets. Management attributed the downturn to ongoing macroeconomic pressures, though strong pricing in key categories—such as wallboard, ceilings, and complementary products—helped cushion the decline.
“We achieved solid results despite facing persistent softness in the broader construction environment,” said John C. Turner, Jr., GMS President and CEO. “Rising interest rates and economic uncertainty continued to weigh on customer activity, creating headwinds across all of our primary end markets.”
Adjusted EBITDA dropped to $109.8 million, down from $146.6 million a year earlier. The EBITDA margin narrowed to 8.2% from 10.4%, reflecting the effects of softer volumes and market volatility.
For the full fiscal year 2025, the company reported net sales of $5.51 billion, representing a slight year-over-year increase of 0.2%. Adjusted full-year EPS totaled $6.18, a decline from $8.61 in the prior fiscal year, highlighting the broader slowdown in construction activity.
Despite the revenue pressures, GMS generated strong free cash flow, producing $183.4 million in Q4 and $336.1 million over the full year. The company concluded the fiscal year with a net debt leverage ratio of 2.4x Pro Forma Adjusted EBITDA, suggesting a stable financial position.
Looking ahead, GMS will continue to monitor market dynamics closely, aiming to manage costs and maintain pricing discipline amid an uncertain macroeconomic backdrop.