Masonite Reports Net Sales Increase While Labor and Logistical Challenges RemainNovember 15th, 2021 by Tara Taffera
Masonite International Corp. reported net sales increased 11% to $652 million for the third quarter of 2021, versus $588 million for the previous year. Net income attributable to Masonite increased to $38 million from a $22 million loss.
“We delivered another quarter of year-on-year net sales growth as a result of favorable pricing actions across all three of our reporting segments and base volume growth in our residential businesses,” said Howard Heckes, president and CEO. “Inflationary pressures continued to weigh on our results as expected, as did labor availability and absenteeism in the quarter. I am extremely pleased with the organization’s ability to navigate these challenges while making continued progress on our long-term growth initiatives.”
North American residential net sales were $489 million, a 16% increase compared to the third quarter of 2020, driven by a 9% increase in AUP, a 4% increase in base volume, a 2% increase due to favorable foreign exchange and a 1% increase in the sale of components and other products, according to the company.
Architectural net sales were $75 million, a 13% decrease compared to the third quarter of 2020, driven by a 15% decrease in base volume and a 3% decrease in the sale of components and other products.
Total company gross profit was $154 million in the third quarter of 2021, a decrease of 4% compared to $160 million in the third quarter of 2020. Gross profit margin decreased 370 basis points to 23.6%, due to the impact of higher inflation and tariffs on raw materials, rising logistics costs, and higher manufacturing wages and benefits, partially offset by higher AUP.
Net income attributable to Masonite was $38 million in the third quarter of 2021 compared to a loss of $22 million in the third quarter of 2020.
The company also provided an update on full-year financial results. North American residential net sales were $1,458 million, a 23% increase compared to the first nine months of 2020.
Total company gross profit was $477 million in the first nine months of 2021, an increase of 11% compared to $431 million in the first nine months of 2020. Gross profit margin decreased 200 basis points to 24.3%, due to the impact of higher inflation and tariffs on raw materials, rising logistics costs, higher manufacturing wages and benefits and increased investment in the business, partially offset by higher AUP.
The company now expects full-year 2021 net sales growth in the range of 15 to 17 percent, reflecting the negative impact that labor and logistics constraints are having on both our operations and end markets. Current foreign exchange tailwinds are expected to continue through the fourth quarter.
“While our team has worked extremely hard to deliver continued growth in the face of a difficult operating environment, we expect the fourth quarter will continue to be affected by a tight labor market and logistics challenges and have updated our outlook to reflect their impact,” Heckes added.