James Hardie Industries (NYSE:JHX) reported first-quarter results above its original guidance, supported by stronger-than-expected organic growth in fiber cement products, commercial execution and continued integration progress following its AZEK acquisition.
Total net sales rose 64% on a reported basis to $1.47 billion and increased 12% on a pro forma basis. Adjusted EBITDA reached $422 million, or a 28.6% margin, also exceeding the high end of the company’s guidance range. Adjusted earnings per share were $0.36, up 13% year over year.
Fiber Cement Leads Growth
Siding & Trim sales increased 34% to $859.8 million, including 20% organic growth that management said was led by fiber cement. Segment Adjusted EBITDA margin was 33.5%, aided by volume leverage, pricing and plant-cost savings.
Management attributed fiber-cement growth to execution on initiatives including ColorPlus, Statement Essentials and the Trim-Over installation method, which is intended to help contractors install siding more quickly and reduce labor costs. The company also cited strength in higher-end repair-and-remodel activity and multifamily new construction, as well as an easier comparison against prior-year inventory destocking.
During the question-and-answer session, management said approximately one-third of the fiber-cement growth reflected strategic initiatives, one-third reflected the comparison with prior-year destocking, and the remainder was associated with price and mix. June fiber-cement sell-through rose 19%, according to the company.
James Hardie said it has expanded its Statement program into additional regions and added stocking locations in Baltimore and Chicopee, Massachusetts. It also held 50 Hardie Pro Lab contractor-training events during the quarter, training more than 1,200 contractors on the Trim-Over method.
Decking Demand and Distribution Expansion
Deck, Rail & Accessories sales declined 5% to $305.1 million, a comparison management said reflected planned channel-inventory normalization rather than weakening demand. The segment’s Adjusted EBITDA margin was 27.1%.
The company said sell-through in decking and railing improved sequentially during the quarter and continued at roughly double-digit levels into July. Demand was supported by wood-deck conversions, premium-product mix and additional shelf space across the platform.
James Hardie recently announced an expanded national distribution partnership with Boise Cascade. The agreement makes Boise a national distributor across the company’s Hardie siding and trim, AZEK Exteriors, TimberTech decking and railing portfolio. The company also expanded relationships with six regional distributors: Capital, Dixie, Lumbermen’s, Parksite, Woodgrain and Woolf.
Management said the distribution changes should support commercial revenue synergies, though they could create quarter-to-quarter sales variability as new partners are loaded with inventory and legacy distributor relationships transition. Lada said approximately one-third of the expected more-than-40% year-over-year growth in Deck, Rail & Accessories during the second quarter is tied to loading new distribution partners.
President and General Manager of North America Building Products Group Jon Skelly said distributor reception to the combined product portfolio had exceeded expectations. He said the Boise relationship and expanded regional partnerships could help the company achieve its fiscal 2027 commercial revenue-synergy target faster, while James Hardie maintained its target of a $125 million exit run rate.
International Results, Cash Flow and Outlook
In Australia and New Zealand, U.S.-dollar sales increased 26% to $153.3 million, with an EBITDA margin of 34.9%. Europe sales rose 15% to $156.4 million, with a 19.4% EBITDA margin. The company cited volume growth, cost management, manufacturing efficiency and foreign-exchange benefits in those businesses.
Free cash flow totaled $254 million in the first quarter, driven by higher profitability, lower capital expenditures, improved working capital and reduced acquisition and integration costs. James Hardie redeemed $400 million of senior unsecured notes ahead of their 2028 maturity, reducing net leverage to 2.7 times. Management reiterated its goal of approximately 2.4 times leverage by the end of fiscal 2027 and less than 2 times by fiscal second-quarter 2028.
The company continues to expect $80 million to $100 million in fiscal 2027 cost pressure, primarily from raw materials, freight and energy. Lada said about $20 million to $25 million of pressure was experienced in the first quarter, largely due to freight. Pricing actions announced in late April are intended to offset the anticipated inflation.
For the second quarter, James Hardie forecast net sales of $1.485 billion to $1.575 billion and Adjusted EBITDA of $420 million to $455 million. The company raised its fiscal 2027 outlook, projecting sales of $5.564 billion to $5.723 billion, representing pro forma growth of 5.9% to 9%, and Adjusted EBITDA of $1.536 billion to $1.625 billion.
Management expects full-year free cash flow to exceed $500 million and capital expenditures to equal approximately 6% to 7% of net sales. While noting that mortgage rates remain elevated and housing sentiment remains cautious, the company said its outlook does not assume an improvement in industry conditions during the remainder of the year.
About James Hardie Industries (NYSE:JHX)
James Hardie Industries plc (NYSE: JHX) is a global manufacturer of high-performance fiber cement building products. The company specializes in exterior cladding, trim and soffit, as well as interior backerboard solutions designed for residential and commercial construction. By combining cement, sand and cellulose fibers, James Hardie produces durable, low-maintenance materials that resist moisture, fire and termite damage, catering to builders, contractors and homeowners through a network of distributors and retail channels.
The company’s flagship products include Hardie® Plank® and Hardie® Panel® siding systems, Hardie® BackerBoard® for tile applications, and a range of architectural trim solutions.
