James Hardie (JHX) Plunges 3.74% Amid Lawsuits Over Destocking Allegations

The share price fell to its lowest level since May 2020 today, with an intraday decline of 2.18%. James Hardie Industries (JHX) has now dropped 3.74% over three consecutive days, extending a slump triggered by revelations of inventory destocking in its North American fiber cement business. The stock’s decline reflects growing investor concern over alleged misrepresentations about operational performance and financial health.

Class-action lawsuits allege that James Hardie executives misled investors by downplaying inventory destocking at distributors and overemphasizing “normal stock levels” during the period from May 20 to August 18, 2025. The suits claim the company’s sales figures were inflated through “channel stuffing,” where excess inventory was pushed to partners to artificially boost results. On August 19, James Hardie disclosed a 12% quarterly sales drop in North America, admitting channel partners had been reducing stock since April. This revelation sent shares plunging 34% in two days, eroding $9.79 from the stock price.

The legal actions highlight broader governance risks for James Hardie, a leader in fiber cement siding. Investors who bought shares during the alleged misrepresentation period are seeking compensation, arguing the company’s disclosures lacked transparency. Analysts note the destocking trend and operational challenges could persist, weighing on investor confidence. The litigation underscores the sector’s sensitivity to inventory management and the reputational costs of misaligned messaging, with the outcome potentially influencing future securities cases and corporate accountability standards.