Resilient pricing and volume growth during the fiscal second quarter for Gypsum Management & Supply helped the company grow net sales in the period.
GMS delivered net sales of $1.5 billion during the fiscal second quarter, ended Oct. 31, a 3.5% increase on a year-over-year basis. Organic net sales, though, declined 4.6% compared to the prior-year period. The decline in organic net sales was attributed to soft multifamily and commercial demand as well as hurricane-related impacts, according to GMS.
Contributions from recent acquisitions helped drive volume growth in ceilings, steel framing, and complementary products in the period for GMS. Pricing improved sequentially compared to the first quarter of fiscal 2025 for GMS for most product categories, year-over-year deflation in steel framing reduced net sales by approximately $18 million compared to the prior year quarter. Hurricanes Helene and Milton also reduced net sales and organic net sales by an estimated $20 million in the period.
Wallboard sales in the fiscal second quarter were $582.1 million, a 0.5% year-over-year decrease. Ceiling sales of $204.4 million in the period represented a 16.6% year-over-year increase while steel framing sales of $217.4 million represented a 6.3% year-over-year decrease. Complementary product sales of $466.8 million represented a 9.0% increase on a year-over-year basis.
Prices remained resilient across our major product lines, including for steel framing where, while lower year-over-year, pricing improved sequentially as compared with the first quarter of fiscal 2025 and monthly as we moved through the quarter,” said John Turner, president and CEO of GMS. “Also, as compared with the second quarter of fiscal 2024, we realized volume growth, inclusive of acquisitions, in ceilings, steel framing, and complementary products. Partially offsetting this growth were soft multifamily activity and softening commercial shipments. Hurricane-related slowdowns also significantly impacted one of our largest and fastest-growing regions during the quarter, causing operational inefficiencies and holding back demand, particularly in wallboard.”
Turner said GMS saw pockets of relative strength in certain commercial sectors in the quarter, including data centers, public and private education, healthcare and government incentive-backed projects.
“Stubbornly high mortgage rates and generally tight financing availability, however, continued to weaken the broader construction environment for each of our end markets, particularly for multifamily,” Turner said. “Despite these near-term challenges, which we expect to continue into the new calendar year, our resilient team and business model are expected to again deliver solid levels of free cash flow as progress through choppy market conditions.”
In the fiscal second quarter, net income decreased to $53.5 million, or $1.35 per share, from $81.0 million, or $1.97 per share, in the second quarter of fiscal 2024. Gross profit in the period for GMS was $461.1 million, a $2.5 million increase compared to the prior-year quarter. Gross margin was 31.4%, down 90 basis points as compared to 32.3% a year ago.
“We remain focused on the execution of our strategic priorities, including expanding our platform through both acquisitions and greenfield opportunities while maintaining a disciplined capital allocation strategy, as well as enhancing our product and service offerings and delivering improved profitability as we leverage technology and best practices to achieve advancements in productivity,” Turner said.
During the second quarter of GMS’s fiscal 2025, the company acquired exterior building products distributor R.S. Elliott Specialty Supply and established a new greenfield location in Summerville, S.C. Following the conclusion of the fiscal quarter, GMS opened two more greenfield locations in Middleton, Mass., and Clackamas, Ore.
