MasterBrand's Q4 2024: Contradictions in Pricing, Integration, and Market Dynamics

These are the key contradictions discussed in MasterBrand's latest 2024Q4 earnings call, specifically including: Pricing Trends and ASP Expectations, Integration of Supreme, Choppiness in the Repair and Remodel Business, and Pricing Strategy:



Fourth Quarter Net Sales Decline:
- MasterBrand reported net sales of $668 million in the fourth quarter, a 1% decrease compared to the same period last year.
- The decline was primarily due to increased choppiness in the repair and remodel business during the latter part of the fourth quarter, resulting in a 6% year-over-year volume decline in the legacy business and a 4% year-over-year net ASP decline.

Slowdown in Repair and Remodel Business:
- The repair and remodel business experienced a 6% year-over-year volume decline in the legacy business during the fourth quarter, with the made-to-order offering being disproportionately impacted.
- The volume decline exacerbated existing average selling price headwinds, leading to a mix shift and slower price realization.

Supreme Cabinetry Acquisition Performance:
- The acquisition of Supreme Cabinetry brands contributed a 9% year-over-year increase to net sales in the fourth quarter.
- The performance was in line with expectations, partially offsetting the decline in the legacy business.

Adjusted EBITDA and Margin Decline:
- MasterBrand delivered adjusted EBITDA of $75 million in the fourth quarter, with a related margin of 11.2%, 150 basis points lower than the same period last year.
- The margin contraction was due to pressure on net ASP, volume declines, and continued investments in the business.

2025 Market Outlook:
- MasterBrand anticipates overall end market demand to be down low single digits in 2025, reflecting the impact of soft fourth quarter market conditions.
- The decline is attributed to continued choppiness in the repair and remodel market, with expectations for the single-family new construction market to be flat to down low single digits.