Jeld-Wen's 2026 Earnings Call: Share Loss, Price-Cost Signals, and Guidance Drivers Don't Match

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Date of Call: Aug 4, 2026

Financials Results

• Revenue: $722 million, down 7% year over year
• Operating Margin: Adjusted EBITDA margin was 0.9%, down 190 basis points year-over-year

Guidance:

• Net revenue expected in the range of $3.05 billion to $3.2 billion, up from prior range of $2.95 billion to $3.1 billion.
• Core revenue expected to decline between 3% and 6% year over year, compared to prior expectation of 5% to 10% decline.
• Adjusted EBITDA range unchanged at $100 million to $150 million.
• Operating cash flow expected to be approximately $40 million; free cash flow use expected to be approximately $60 million.
• Capital expenditures expected to be approximately $100 million, largely maintenance in nature.

Business Commentary:

Revenue and Market Conditions:

• GELDWEN reported sales of $722 million for the first quarter, down 7% year-over-year.
• The revenue decline was primarily due to lower volume mix, with most of the decline driven by lower volume, reflecting a soft macro environment and continued market pressure.

Profitability and Cost Pressures:

• Adjusted EBITDA for the quarter was $6 million, down 72% year-over-year, with an adjusted EBITDA margin of 0.9%, down 190 basis points.
• Profitability was impacted by volume mix and negative price-cost dynamics, as inflation was not fully offset by pricing, although partially offset by improved productivity.

Service Improvement and Operational Focus:

• On-time, in-full (OTIF) delivery rates improved significantly, surpassing 90%, reflecting focused efforts on operational improvements and customer service.
• The company attributes this improvement to investments in service, including higher transportation spend and maintaining staffing levels, despite lower volumes.

Guidance and Market Outlook:

• For 2026, GELDWEN increased its revenue outlook to $3.05 billion to $3.2 billion, with adjusted EBITDA range maintained at $100 million to $150 million.
• The outlook reflects a cautious view of the market, with expectations of modest benefits from improved service levels and pricing discipline, despite ongoing cost pressures, particularly in freight.

Strategic Review and Liquidity:

• The company is conducting a strategic review of its European business, which could provide meaningful liquidity and strengthen the balance sheet.
• This review, along with evaluating other strategic options, aims to improve financial flexibility while preserving long-term value.

Sentiment Analysis:

Overall Tone: Neutral

• Management acknowledges continued market pressure and a 'challenging and uncertain environment' but highlights operational progress: 'service levels have improved,' 'trust is beginning to translate into commercial opportunities,' and 'we are becoming a more consistent and disciplined company.' Guidance is cautiously optimistic, with revenue raised but EBITDA range unchanged, reflecting ongoing pressures.

Q&A:

• Question from John Lovello (UBS): The first one is, at the midpoint, your outlook seems to imply 2Q adjusted EBITDA of about $31 million versus about $6 million in the first quarter. Can you just help us kind of bridge the ramp from first quarter to second quarter?
  Response: The increase is driven by normal seasonality, higher sales volume, better labor absorption, and the benefit of pricing actions implemented in Q1 that flow through more meaningfully in Q2, supported by strong April sales.

• Question from John Lovello (UBS): And then on the North American decremental margins, around 15%, which was pretty favorable, and I think it speaks to the cost controls and the cost take that you guys have achieved. I mean, how sustainable do you think this level of decremental is? And maybe more importantly, how are you thinking about incrementals in an improving volume environment?
  Response: Samantha: Short-term cost discipline will be maintained; transformational cost actions will continue. In improved volumes, normal incrementals would be 25% to 30%. Bill: The company has removed about $100 million of headwind from the full-year guide, showing progress in reducing the rate of decline.

• Question from Susan McClary (Goldman Sachs): My first question is on the improved service levels. It's encouraging to hear that you're seeing such a nice lift there. I guess, can you talk more about how you're thinking of the path from here, the specific programs that you are, are working on and putting in place to support that? And I know last quarter we talked about standardizing some of your operating systems and processes to help with that service. Is this part of what's driving that and where you are in that process as well?
  Response: Standard work across sites is progressing well and driving metric improvements. Teams are also engaging customers to regain share. Service improvements are expected to benefit the back half of the year, despite a soft market outlook.

• Question from Susan McClary (Goldman Sachs): And then can you give a bit more color on the magnitude of the inflation? How we should be thinking about that path for price costs this year? I know you mentioned that you're starting to see some of the realization on the first quarter increase. And with that, how you're thinking about that balance between volume versus price in this environment?
  Response: Inflation is primarily in freight and energy, with some offset from lower tariff exposure. Price-cost negativity is higher than initially expected due to competitive pricing pressures and affordability challenges.

• Question from Matthew Gouley (Barclays): So first off, for Europe, you guys mentioned that you're not seeing any further demand pressure from current levels. So I'm curious if this suggests that pricing strains can continue in this region, similar to 1Q. And then just kind of going off of that, how have some of the recent geopolitical dynamics maybe impacted the review of the European business, if at all? And then on the second question, so on the productivity initiatives on the 110 million, I'm curious, I think last quarter you guys said 50% completed, 25% was action but hadn't hit, and then 25% still needed to be action. Is this on track with what you guys expected or any updates to these numbers?
  Response: In Europe, volumes have stabilized, and pricing actions have been implemented to offset inflation; the macro environment remains challenging. On productivity, the $35 million transformation carryover is 100% complete, and base productivity/rightsizing initiatives are greater than 80% done.

• Question from Jeffrey Stevenson (Loop Capital): Can you talk more about the improvement in on-time deliveries you've seen over the last year and whether it's corresponded with the stabilization in your share position over that time period as service levels continue to improve?
  Response: Yes, service improvements have corresponded with a reduction in share loss headwinds, helping to improve the top-line outlook by about $30 million from last quarter.

• Question from Jeffrey Stevenson (Loop Capital): And then, you know, thanks for the update on the Europe Strategic Review. But, you know, previously you talked about divestitures of, you know, smaller non-core assets as well, such as your distribution business in North America. And, you know, just wondered if there are still, you know, opportunities, you know, across your, you know, footprint for, you know, other potential divestitures as well.
  Response: The company continues to evaluate other options to improve liquidity, including sale of assets or sale-leaseback transactions, while managing cash and addressing near-term maturities proactively.

Contradiction Point 1

Financial Headwind from Share Loss

The magnitude of the share loss headwind is presented differently, impacting financial guidance and investor expectations.

John Lovello (UBS) - John Lovello (UBS)

2026Q2: Share loss is now expected to be a $30 million headwind (improved from $60 million previously), showing traction. - Bill Christensen(CEO)

How sustainable are the current 15% decremental margins in North America, and how are you thinking about incrementals in an improving volume environment? - Jeffrey Stevenson (Loop Capital Markets LLC)

2026Q1: The full-year bridge shows that while price-cost has worsened, the headwind from share loss and volume mix has improved by about $30 million from last quarter’s expectations. - Samantha Stoddard(CFO)

Contradiction Point 2

Price/Cost Headwind Expectations

Contradiction on the magnitude and nature of price-cost impact for 2026, affecting EBITDA forecasts.

What question did Susan McClary (Goldman Sachs) ask during the earnings call? - Susan McClary (Goldman Sachs)

2026Q2: The price-cost negativity has increased from the initial expectation (now higher than the previously feared negative $10 million EBITDA impact). - Bill Christensen(CFO)

Can you elaborate on the expected inflation magnitude, the trajectory for price costs this year, and the strategy for balancing volume versus price? - Susan Maklari (Goldman Sachs Group, Inc., Research Division)

2025Q4: While a price/cost headwind of ~$10M is still expected due to residual input cost inflation (e.g., glass), this is seen as a move toward a more reasonable price/cost relationship after years of pressure. - William Christensen(CFO)

Contradiction Point 3

Market Share Outlook and Recovery Timing

Contradiction on the timing and certainty of regaining lost market share.

Jeffrey Stevenson (Loop Capital) - Jeffrey Stevenson (Loop Capital)

2026Q2: Improvements in service (OTIF) have corresponded with regaining share in certain pockets of the North American market... The opportunity is targeted for 2026. - Bill Christensen(CEO) & Samantha Stoddard(CFO)

How has the improvement in on-time deliveries over the past year correlated with the stabilization of your market share? - Steven Ramsey (Thompson Research Group)

2025Q3: Share loss has been more on the volume and mix side... The opportunity is targeted for 2026. - Bill Christensen(CEO) & Samantha Stoddard(CFO)

Contradiction Point 4

Primary Driver of Revenue Guidance Reduction

Contradiction on whether volume or price-cost is the main factor behind lowered EBITDA guidance.

Susan McClary (Goldman Sachs) - Susan McClary (Goldman Sachs)

2026Q2: The reduction is driven by: 1) Softer market conditions in Q3 than anticipated... 3) Selective service issues across the network. - Bill Christensen(CEO)

How are you balancing volume versus price given the magnitude of inflation and the expected path for price costs this year? - Anika Dholakia (Barclays)

2025Q3: The reduction is driven by more than 90% volume and very small mix changes on the edges of product groups. - Samantha Stoddard(CFO)

Contradiction Point 5

Description of Service Level Improvements

The correlation between service improvements and market share is framed differently.

Jeffrey Stevenson (Loop Capital) - Jeffrey Stevenson (Loop Capital)

2026Q2: Yes, **improvements in service (OTIF) have corresponded with regaining share in certain pockets of the North American market. - Bill Christensen(CEO)

Did the improvement in on-time deliveries over the last year contribute to the stabilization in your market share? - Jeffrey Stevenson (Loop Capital Markets LLC)

2026Q1: Yes, **service improvements are corresponding with share stabilization and some regain** in certain pockets of the North American market. - William Christensen(CEO)

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