Caesarstone (NASDAQ:CSTE) reported first-quarter results on Wednesday that came in ahead of analyst expectations on earnings, although revenue fell short as the company continued restructuring operations in a difficult market environment.
The company’s shares showed little movement in after-hours trading following the earnings release.
Revenue declines amid softer global demand
Caesarstone posted an adjusted loss of $0.32 per share for the quarter ended March 31, outperforming analyst estimates for a loss of $0.35 per share.
Revenue totaled $88.7 million, below the consensus forecast of $97.8 million and down 10.9% from $99.6 million in the same period last year.
On a constant-currency basis, revenue declined 14.9% year-on-year as the company continued to face weaker global demand and competitive pressures, particularly in North America. The decline was partly offset by stronger performance in Australia.
Margins improve following manufacturing transition
Gross margin increased to 22.3% from 21.3% in the prior-year quarter, while adjusted gross margin improved to 23.9% from 21.2%.
The company said the margin improvement was driven by cost savings linked to its transition toward third-party manufacturing partners following the closure of its Bar-Lev production facility.
“First quarter results reflect meaningful structural progress in our ongoing transformation,” said Yos Shiran, chief executive officer of Caesarstone.
“Gross margin expanded driven by the increasing contribution of our transition to a third-party manufacturing model despite continued revenue pressure.”
Company maintains profitability target
Adjusted EBITDA loss for the quarter was $7.5 million, compared with a loss of $7.1 million in the same period a year earlier.
Caesarstone reiterated its goal of reaching positive adjusted EBITDA during the third quarter of 2026.
Balance sheet remains in net cash position
As of March 31, the company held $52.3 million in cash and cash equivalents.
Caesarstone reported a net cash position of $50.4 million at the end of the quarter.