Q1 FY27
Filed Aug 6, 2026James Hardie Reports First Quarter FY27 Results; Raises FY27 Outlook
Net sales, net income, adjusted EBITDA, and Siding & Trim results increased year over year; the Company said sales and adjusted EBITDA exceeded original guidance and raised its FY27 outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net SalesGAAP | $1,474.6 million | – | +64% |
| Operating IncomeGAAP | $217.7 million | – | +57% |
| Operating Income MarginGAAP | 14.8 % | – | (60bps) |
| Net IncomeGAAP | $104.3 million | – | +67% |
| Net Income per common share - DilutedGAAP | $0.18 | – | +23% |
| Net Income MarginGAAP | 7.1 % | – | +10bps |
| Adjusted Net Incomenon-GAAP | $209.3 million | – | +54% |
| Adjusted Diluted Earnings Per Sharenon-GAAP | $0.36 | – | +13% |
| Adjusted EBITDAnon-GAAP | $422.1 million | – | +79% |
| Adjusted EBITDA Marginnon-GAAP | 28.6 % | – | +230bps |
| Siding & Trim Operating IncomeGAAP | $214.9 million | – | +33% |
| Siding & Trim Operating Income MarginGAAP | 25.0 % | – | (10bps) |
| Siding & Trim Adjusted EBITDAnon-GAAP | $287.7 million | – | +40% |
| Siding & Trim Adjusted EBITDA Marginnon-GAAP | 33.5 % | – | +140bps |
| Deck, Rail & Accessories Operating LossGAAP | $(3.3) million | – | – |
| Deck, Rail & Accessories Operating Loss MarginGAAP | (1.1 %) | – | – |
| Deck, Rail & Accessories Adjusted EBITDAnon-GAAP | $82.8 million | – | – |
| Deck, Rail & Accessories Adjusted EBITDA Marginnon-GAAP | 27.1 % | – | – |
| Australia & New Zealand Operating IncomeGAAP | $46.8 million | – | +24% |
| Australia & New Zealand Operating Income MarginGAAP | 30.5 % | – | (60bps) |
| Australia & New Zealand EBITDAother | $53.5 million | – | +24% |
| Australia & New Zealand EBITDA Marginother | 34.9 % | – | (50bps) |
| Europe Operating IncomeGAAP | $20.2 million | – | +34% |
| Europe Operating Income MarginGAAP | 12.9 % | – | +180bps |
| Europe EBITDAother | $30.4 million | – | +39% |
| Europe EBITDA Marginother | 19.4 % | – | +340bps |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Siding & TrimNet sales growth was driven by a low-double-digit volume increase in Fiber Cement, strong price/mix realization, and the contribution from AZEK Exteriors not in the prior period. On an organic basis, net sales increased 20%. | $859.8 million | – | +34% |
| Deck, Rail & AccessoriesThe volume decline reflected the planned reduction in production and shipments to align channel inventory with end-market demand. Total sell-through approached double digit growth and outpaced shipments. | $305.1 million | – | decreased 5% on a pro forma basis |
| Australia & New ZealandNet sales increased 14% in Australian dollars, driven by low double digit volume growth and a FX tailwind. Volume growth reflected gradual improvement in the Australian housing market, share gains, continued conversion and new builder wins. | $153.3 million | – | +26% |
| EuropeNet sales increased 12% in Euros, driven by high-single digit volume growth in Fiber Gypsum, strong price realization, and a favorable FX tailwind. | $156.4 million | – | +15% |
full year FY27 outlook
- RevenuePro Forma Sales Growth of 5.9% to 9.0%
- NotePro Forma Adjusted EBITDA Growth of 7.4% to 13.7%
- NoteFY27 Free Cash Flow Target of $500+ Million Reaffirmed
- NoteOrganic Growth Expected in Siding & Trim for remainder of the year
What drove it
- Siding & Trim organic net sales increased 20%, led by a return to volume growth in North American fiber cement and traction from strategic growth initiatives.
- Siding & Trim exterior product volumes increased mid-double digits, with both Single-Family and Multi-Family growing double digits.
- Siding & Trim adjusted EBITDA margin expansion was driven primarily by favorable net price realization, favorable raw material costs, and continued cost savings from the Hardie Manufacturing Operating System.
- DR&A sell-through accelerated each month and retail sell-through was supported by solid consumer demand and incremental shelf space across the combined platform.
- Europe margin expansion reflected operating leverage on higher volumes, favorable pricing, and continued cost savings from HOS.
- Cost synergies were ahead of schedule and revenue synergies were on track. Commercial synergy momentum included expanded nationwide partnerships with Boise Cascade and major regional distributors.
Concerns
- The Company said its first-quarter performance did not reflect a meaningful improvement in the underlying U.S. housing market and it is not assuming a housing market improvement.
- Siding & Trim year-over-year volume comparisons benefited from an easier prior-year comparison as channel inventory was reduced in the first quarter of fiscal 2026; the Company expects this comparison benefit to moderate over the balance of the year.
- DR&A pro forma net sales decreased 5% because of the planned reduction in production and shipments implemented late in the prior quarter.
- ANZ EBITDA margin decreased 50 basis points because the fuel levy is passed through at cost and certain R&D expenses were allocated to the segment in the current period.
- Europe market conditions, particularly in Germany, remain challenged, with inflationary pressure on raw materials, energy, and freight.
What to watch
- Organic growth in Siding & Trim for the remainder of FY27.
- Whether DR&A production normalization improves manufacturing absorption as channel inventory aligns with demand.
- Delivery of cost and revenue synergies from the AZEK combination.
- Progress toward the FY27 Free Cash Flow Target of $500+ Million and continued deleveraging.
- The moderation of Siding & Trim's favorable comparison benefit over the balance of the year.
Balance sheet and cash flow
- FY27 Free Cash Flow Target of $500+ Million Reaffirmed, Reflecting an Increase of More than $200 Million Year Over Year.
Analysis
James Hardie reported a strong Q1 FY27, with net sales of $1,474.6 million increasing +64%, operating income of $217.7 million increasing +57%, and net income of $104.3 million increasing +67%. Adjusted EBITDA increased +79% to $422.1 million, while adjusted EBITDA margin expanded +230bps to 28.6 %. The Company stated that sales and adjusted EBITDA exceeded original guidance.
Siding & Trim was the largest contributor, with net sales of $859.8 million, up +34%, and organic net sales up 20%. The reported drivers were low-double-digit Fiber Cement volume growth, strong price/mix realization, and AZEK Exteriors. The segment's adjusted EBITDA margin rose +140bps to 33.5 %, while reported operating income margin was approximately flat at 25.0 % as favorable net price and operating leverage were offset by AZEK acquisition-related expenses and amortization of acquired AZEK intangibles.
DR&A reported net sales of $305.1 million and an operating loss of $(3.3) million. Net sales decreased 5% on a pro forma basis because the Company reduced production and shipments to normalize channel inventory. Management described underlying demand as healthy and improving, with total sell-through approaching double digit growth, accelerating each month, and exceeding shipments. ANZ and Europe also posted double-digit reported sales growth, while Europe delivered operating income margin expansion of +180bps and EBITDA margin expansion of +340bps.
The Company raised its full-year FY27 outlook, targeting Pro Forma Sales Growth of 5.9% to 9.0% and Pro Forma Adjusted EBITDA Growth of 7.4% to 13.7%. It reaffirmed a FY27 Free Cash Flow Target of $500+ Million, reflecting an increase of more than $200 Million year over year. Management explicitly said the outlook does not assume a U.S. housing market improvement, making continued fiber-cement share gains, commercial execution, synergy delivery, normalized DR&A production, and cash-flow conversion the central operating items to monitor.
The main qualifications are that Siding & Trim volume comparisons benefited from an easier prior-year inventory reduction and that this benefit is expected to moderate. DR&A still reported lower pro forma sales as inventory was normalized. Europe remains affected by challenging market conditions and inflationary pressure on raw materials, energy, and freight, while ANZ margin was affected by the fuel levy and current-period R&D cost allocation.
Management, verbatim
In the first quarter, we delivered sales and adjusted EBITDA ahead of our original guidance. The above-market performance was driven primarily by strong double-digit sell-through in Siding & Trim, reflecting the success of our growth initiatives, underlying demand for our products, and lapping an inventory reduction from a year ago.
Aaron Erter, CEO of James Hardie
We are encouraged by the traction from our sales initiatives to grow the fiber cement business, continued material conversion in decking, and positive contributions from both sales and cost synergies.
Aaron Erter, CEO of James Hardie
Our strong first-quarter results reflect disciplined execution and continued above-market growth, rather than a meaningful improvement in the underlying U.S. housing market. We are not assuming a housing market improvement, but our performance and growth expectations support raising our full-year outlook.
Aaron Erter, CEO of James Hardie
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, no comparison of actual results with prior guidance is available.
- Consolidated gross profit and gross margin were not reported in the provided filing text.
- Consolidated operating cash flow and actual free cash flow for Q1 FY27 were not reported in the provided filing text.
- Cash balance, debt balance, net debt, liquidity, and leverage metrics were not reported in the provided filing text.
- Share repurchases, dividends, and other capital-return amounts were not reported in the provided filing text.
- Quarter-over-quarter consolidated and segment comparisons were not reported in the provided filing text.
- Prior-year DR&A operating loss, operating loss margin, adjusted EBITDA, and adjusted EBITDA margin were not reported in the provided filing text.
- FY27 guidance for gross margin, operating expenses, and tax rate was not reported in the provided filing text.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.