MasterBrand Reports 6% Revenue Growth, Net Income Decline in Latest Quarter

MasterBrand, Inc., a leading manufacturer of residential cabinets in North America, reported its financial results for the thirteen and thirty-nine weeks ended September 29, 2024. For the thirteen weeks, net sales increased to $718.1 million, up from $677.3 million in the same period of 2023, marking a 6.0% rise. However, net sales for the thirty-nine weeks decreased slightly to $2,032.7 million from $2,049.1 million, a decline of 0.8%. The increase in quarterly sales was bolstered by $60.8 million from the acquisition of Supreme Cabinetry, although excluding this impact, there was a $20.0 million decrease attributed to a 14.0% decline in price and mix changes.

Gross profit for the thirteen weeks was $238.0 million, a marginal increase from $237.5 million in the prior year. However, operating income fell significantly to $57.6 million, down 37.5% from $92.2 million, while income before taxes dropped to $39.4 million from $77.9 million. Net income for the quarter was $29.1 million, a decrease of 51.3% from $59.7 million in 2023. For the thirty-nine weeks, net income also declined to $111.9 million from $145.9 million, a 23.3% drop.

The cost of products sold for the thirteen weeks rose to $480.1 million, up 9.2% from $439.8 million, primarily due to the Supreme acquisition. Selling, general, and administrative expenses increased by 18.5% to $166.3 million, driven by acquisition-related costs and higher associate-related expenses. Restructuring charges for the quarter were $7.8 million, compared to $1.4 million in the same period last year.

MasterBrand's total assets increased to $2,960.2 million as of September 29, 2024, from $2,381.7 million at the end of 2023, largely due to the acquisition of Supreme. Goodwill rose to $1,129.4 million, reflecting the acquisition's impact. Long-term debt also increased significantly to $1,062.3 million from $690.2 million, primarily due to financing the acquisition.

The company completed the acquisition of Dura Investment Holdings LLC on July 10, 2024, for $520.0 million, enhancing its portfolio in premium cabinetry. This strategic move is expected to broaden its product offerings and improve distribution channels. The acquisition was funded through a combination of cash and proceeds from a revolving credit facility.

Overall, MasterBrand's financial performance reflects both growth in sales and challenges in profitability, influenced by strategic acquisitions and rising operational costs.