Building products manufacturer JELD-WEN (NYSE: JELD) announced better-than-expected revenue in Q1 CY2025, but sales fell by 19.1% year on year to $776 million. Its non-GAAP loss of $0.17 per share was 11.6% above analysts’ consensus estimates.
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JELD-WEN (JELD) Q1 CY2025 Highlights:
- Revenue: $776 million vs analyst estimates of $769.6 million (19.1% year-on-year decline, 0.8% beat)
- Adjusted EPS: -$0.17 vs analyst estimates of -$0.19 (11.6% beat)
- Adjusted EBITDA: $21.9 million vs analyst estimates of $20.76 million (2.8% margin, 5.5% beat)
- Operating Margin: -22.1%, down from -3% in the same quarter last year
- Free Cash Flow was -$125.4 million compared to -$45.7 million in the same quarter last year
- Organic Revenue fell 13.7% year on year, in line with the same quarter last year
- Market Capitalization: $343.8 million
StockStory’s Take
JELD-WEN’s first quarter results were shaped by persistent weakness in demand across both North America and Europe, with management citing double-digit volume declines as a primary factor. CEO William Christensen emphasized that the company faced intensified volume pressures, ongoing productivity challenges, and operational inefficiencies caused by underutilized manufacturing sites. He noted that recent network changes and headcount reductions have not decreased costs at the pace needed to offset declining demand, leading to a sharp drop in operating margin and negative free cash flow.
Looking ahead, management withdrew full-year guidance due to the heightened uncertainty surrounding tariffs and macroeconomic volatility. Christensen and CFO Samantha Stoddard pointed to ongoing transformation initiatives as a priority, including automation investments and strategic footprint optimization. The company expects to offset most tariff costs by passing them through to customers but warned that the timing and impact on demand remain unpredictable. As Stoddard stated, JELD-WEN’s focus will remain on EBITDA improvement, disciplined capital allocation, and maintaining liquidity as market conditions evolve.
Key Insights from Management’s Remarks
JELD-WEN’s management attributed the quarter’s performance to persistent market softness, operational inefficiencies, and external cost pressures, while highlighting ongoing transformation efforts and supply chain adaptation.
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Volume Declines in Key Regions: Both North America and Europe experienced double-digit volume drops. In North America, the decline was largely due to lost business from a major retailer and the divestiture of the Towanda facility, while Europe’s weakness was tied almost entirely to reduced market demand.
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Product Mix Stabilization: While prior quarters saw negative impacts from customers shifting to lower-priced, entry-level products, management stated that product mix has now largely stabilized. The current revenue decline is predominantly due to volume, not further mix deterioration.
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Tariff Exposure and Mitigation: Management estimates $55 million in annualized tariff impact, with $30 million expected for 2025. Direct material sourcing from China is low, and JELD-WEN plans to pass most costs to customers. However, the wider industry’s supply chain adjustments and the demand impact remain uncertain.
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Transformation Initiatives Advance: The company continues to invest in automation and network optimization, with over half of capital expenditures directed at large-scale projects to improve efficiency and reduce costs. Recent milestones include workflow consolidations and the completion of a major investment at a Texas facility.
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Cost Control and Liquidity Focus: Despite an increased net debt leverage ratio, Stoddard emphasized JELD-WEN’s ample liquidity, an undrawn $500 million revolving credit facility, and ongoing review of capital projects. Potential asset sales and sale-leasebacks are under consideration to further strengthen the balance sheet.
Drivers of Future Performance
Management’s outlook for the remainder of 2025 is marked by significant uncertainty, with muted expectations for demand recovery and a continued focus on operational transformation and cost management.
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Tariff Pass-Through Uncertainty: The company expects to offset most tariff-related costs through customer surcharges, but cautioned that demand implications are difficult to predict as the broader industry adjusts.
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Transformation and Cost Actions: JELD-WEN is targeting approximately $150 million in transformation and short-term cost actions for 2025, with 60% of benefits expected in the second half. The realization of these benefits depends heavily on volume stability and improved productivity.
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Liquidity and Capital Discipline: Management is prioritizing cash flow and maintaining flexibility in capital expenditures, with readiness to adjust investment plans or pursue asset sales if market conditions deteriorate further.
Top Analyst Questions
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John Lovallo (UBS): Asked about the ability to pass through $30 million in tariff costs to customers and mitigation actions. Management expressed confidence in passing costs along but highlighted uncertainty regarding long-term demand impacts.
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Philip Ng (Jefferies): Questioned the back-half realization of transformation benefits and leverage management. Management said 60% of benefits should occur in the second half, but emphasized that results depend on volume trends and that liquidity is currently secure.
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Susan Maklari (Goldman Sachs): Probed whether JELD-WEN’s U.S.-based production could help regain market share amid tariffs. Management sees opportunity, especially for domestically produced fiberglass doors, but noted any gains will take time.
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Anika Dholakia (Barclays): Asked about product mix trends and timing of tariff impacts. Management said mix has stabilized at lower levels, with tariff surcharges expected to flow through starting in Q2.
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Mike Dahl (RBC Capital Markets): Sought clarification on the muted Q2 earnings outlook and credit facility covenants. Management reiterated that demand recovery is slower than expected and confirmed there are no restrictive covenants on the undrawn revolver.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the pace at which JELD-WEN’s transformation initiatives and cost actions improve productivity and margins, (2) the company’s progress in passing through tariff-related costs without eroding customer demand, and (3) liquidity management, including capital allocation flexibility and potential asset sales. We will also track any signs of stabilization in market demand or improvements in builder traffic that could signal a broader recovery.
JELD-WEN currently trades at a forward P/E ratio of 6.7×. In the wake of earnings, is it a buy or sell? Find out in our free research report.
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