JELD-WEN Holding, Inc. (JELD) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals a challenging market outlook with declining revenue and EBITDA, increased net debt leverage, and weak financial guidance. Despite some operational improvements and strategic actions, the negative sentiment from analysts, particularly on margin declines and inflationary pressures, outweighs the positives. The company’s strategic review and potential asset sales also add uncertainty, leading to a negative sentiment prediction for the stock price over the next two weeks.
Key Financial Performance
Net Revenue $722 million, down 7% year-over-year. The decline was driven by lower volume/mix, with mix slightly down and most of the decline attributed to lower volume.
Adjusted EBITDA $6 million, down 72% year-over-year. Adjusted EBITDA margin was 0.9%, down 190 basis points year-over-year. The decline was primarily due to volume/mix and negative price/cost dynamics, partially offset by improved productivity.
Operating Cash Flow $91 million use of cash in the first quarter, driven by lower EBITDA and a $43 million use of working capital. The first quarter is typically the highest working capital quarter of the year.
Net Debt Leverage Increased to 11.3x at the end of the first quarter due to lower EBITDA and seasonal working capital use. $40 million was drawn on the revolver to manage liquidity.
North America Revenue $453 million, down from $531 million in the prior year. The decline was driven by lower volumes and the Towanda Divestiture. Adjusted EBITDA was $4 million, down from $16 million, with margin declining to 0.8% from 2.9% due to inflation and lower volumes, partially offset by productivity and SG&A improvements.
Europe Revenue $269 million, up from $245 million in the prior year, an increase of 10% year-over-year. The improvement was driven by foreign exchange and slightly better pricing, partially offset by volume decline. Adjusted EBITDA was $7 million, down from $11 million, with margin declining to 2.6% from 4.3% due to lower volume/mix and higher SG&A expense.
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Operating Highlights
Market Outlook: The company expects the North American windows and doors market to decline by low to mid-single digits in 2026. New single-family construction is expected to decrease by low single digits, repair and remodel by mid-single digits, while U.S. multifamily is expected to grow significantly. Canada is projected to face high single-digit declines due to economic softness and weak housing activity. In Europe, volumes are expected to remain flat year-over-year, with no further deterioration in demand.
Operational Improvements: The company has focused on improving service and customer experience, achieving over 90% On-Time, In-Full (OTIF) delivery rates. Investments in transportation and staffing have been made to prioritize service and rebuild customer trust.
Cost Management: Deliberate actions were taken to align labor with market conditions and adapt the cost structure. Productivity improvements contributed $22 million year-over-year, and SG&A expenses were reduced by $6 million.
Financial Performance: First quarter revenue was $722 million, down 7% year-over-year, primarily due to lower volumes. Adjusted EBITDA was $6 million, a 72% decline year-over-year. Operating cash flow was a $91 million use of cash, driven by lower EBITDA and working capital use.
European Business Review: The company is conducting a strategic review of its European business to potentially provide liquidity and strengthen the balance sheet.
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Risk or Challenges
Market Conditions: The macro environment remains soft, with continued market pressure and a challenging and uncertain environment. North America windows and doors market is expected to decline, with specific pressure in Canada due to economic softness and weak housing activity.
Volume Decline: Lower volumes and volume/mix declines are impacting revenue and profitability. This includes a 7% year-over-year revenue decline in Q1 2026 and a significant headwind from market volume/mix.
Cost Pressures: Higher cost pressures, particularly in freight, glass, metals, and transportation, are negatively impacting margins. Price/cost dynamics remain unfavorable as inflation is not fully offset by pricing.
Competitive Pricing Environment: Pricing remains competitive in certain areas, leading to incremental price/cost headwinds and targeted promotional activity to regain traction with customers.
European Business Uncertainty: The strategic review of the European business is ongoing, creating uncertainty. While it could provide liquidity, no decisions have been finalized.
Debt and Cash Flow Challenges: Net debt leverage increased to 11.3x, and operating cash flow was negative in Q1 2026. The company drew $40 million on its revolver to manage liquidity.
Customer Trust and Service Recovery: While service levels are improving, the company is still working to rebuild customer trust and achieve consistent operational performance. Investments in service, such as higher transportation spend, are adding to costs.
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Guidance & Outlook
Revenue Outlook: The company has increased its revenue outlook for 2026 to a range of $3.05 billion to $3.2 billion, up from the prior range of $2.95 billion to $3.1 billion. This reflects a modest benefit from improving service levels and aligns company volume assumptions with the underlying market.
Core Revenue Decline: Core revenue is expected to decline between 3% and 6% year-over-year, compared to the previous expectation of a 5% to 10% decline.
Adjusted EBITDA: The adjusted EBITDA range remains unchanged at $100 million to $150 million. Incremental price/cost headwinds are expected to offset the benefits of improved volumes.
Cash Flow Expectations: Operating cash flow is expected to be approximately $40 million, with a free cash flow use of approximately $60 million. Capital expenditures are anticipated to be around $100 million, primarily for maintenance.
Market Outlook - North America: The overall windows and doors market in North America is expected to decline by low to mid-single digits. New single-family construction is projected to decline by low single digits, repair and remodel by mid-single digits, and U.S. multifamily is expected to grow significantly year-over-year. Canada is anticipated to face high single-digit declines due to economic softness and weak housing activity.
Market Outlook - Europe: European market conditions are stabilizing, with volumes expected to remain flat year-over-year. Demand remains subdued, but no further deterioration is anticipated.
Strategic Review of European Business: The company is progressing with the strategic review of its European business, which could provide meaningful liquidity and strengthen the balance sheet. No specific announcements have been made yet.
Operational Focus: The company is prioritizing service improvements, operational execution, and pricing discipline. Investments in service and operational improvements are expected to support volume recovery and share gains over time.
Cost Pressures: Higher-than-expected cost pressures, particularly in freight, are anticipated. The company is managing these dynamics while maintaining a focus on customer service and operational execution.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q: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 bridge the ramp from first quarter to second quarter?
A:The ramp is primarily driven by normal seasonality, with the second quarter benefiting from higher sales volume and better labor absorption. Additionally, pricing actions implemented in Q1 will flow more meaningfully in Q2. The company is already seeing an uptick in April and feels confident about Q2.
Q:How sustainable is the North American decremental margin of around 15%, and how are you thinking about incrementals in an improving volume environment?
A:The company plans to hold the line on costs in the short term, with transformational actions and cost takeouts continuing. Improved volumes and seasonality should result in normal incrementals of 25% to 30%. The CEO highlighted removing $100 million of headwind and gaining traction in reducing the rate of decline.
Q:Can you talk more about the improved service levels and the specific programs supporting that? Where are you in the process of standardizing operating systems and processes?
A:Standard work across sites in Europe and North America is progressing well, with improvements in OTIF metrics. The company is focusing on flexibility in a choppy demand environment and incurring additional costs to meet customer expectations. Teams are also working to regain lost market share, which is showing positive signs for the back half of the year.
Q:Can you give more color on the magnitude of inflation and the balance between volume versus price in this environment?
A:The biggest inflationary pressures are from freight and energy prices in North America and Europe, with slightly less tariff exposure than expected. Inflation and competitive pricing are offsetting each other materially. Price/cost negativity is higher than initially expected, with an EBITDA bridge impact now above the previously estimated negative 10%.
Q:For Europe, does the stabilization in demand suggest pricing strength can continue? How have recent geopolitical dynamics impacted the review of the European business?
A:Demand in Europe has stabilized, and pricing strength continues to offset inflation and headwinds. The company is feeling balanced in Europe despite macro challenges. No specific updates were provided on the strategic review of the European business, as the process is ongoing.
Q:What is the status of the $110 million productivity initiatives?
A:The $35 million transformation carryover is 100% complete. Over 80% of the base productivity and rightsizing initiatives are done, with the remaining smaller initiatives expected to be completed by Q2 through Q4.
Q:Can you talk about the improvement in on-time deliveries and its correlation with stabilization in your share position?
A:Improvements in on-time deliveries have helped regain share in certain areas, reducing the headwind from share loss. The company has made significant progress in partnering with customers to meet expectations, with a $30 million improvement in share loss volume/mix EBITDA impact from last quarter.
Q:Are there still opportunities for divestitures of smaller non-core assets, such as the North American distribution business?
A:The company continues to evaluate options to improve liquidity, including potential asset sales and sale-leaseback transactions. No further details were provided, but the company expects to address near-term maturities before December and is actively managing cash in the current macro environment.
Q:Review of Unclear Management Responses
A:The management avoided providing specific details on the strategic review of the European business and the potential divestitures of smaller non-core assets, stating that the process is ongoing and no further details are available at this time.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
OTIF
Productivity benefit
SGA expense
Service
benefit service
condition Slide
condition cost
control
cost headwind
cost structure
customer experience
decline volume
element
engagement
exchange
expectation reminder
feedback
flow cash
focus cash
improvement remainder
investment
item
labor market
level progress
level volume
liquidity flexibility
mix headwind
opportunity liquidity
pressure freight
pricing discipline
progress service
reminder capital
review
service customer
service improvement
service trust
transportation
use capital
use cash
volume assumption
JELD Transcript
JELD-WEN Holding, Inc. (JELD) Q1 2026 Earnings Call Transcript
Unknown5-5
The earnings call reveals a challenging market outlook with declining revenue and EBITDA, increased net debt leverage, and weak financial guidance. Despite some operational improvements and strategic actions, the negative sentiment from analysts, particularly on margin declines and inflationary pressures, outweighs the positives. The company’s strategic review and potential asset sales also add uncertainty, leading to a negative sentiment prediction for the stock price over the next two weeks.
JELD-WEN Holding, Inc. (JELD) Q4 2025 Earnings Call Transcript
Unknown2-18
The earnings call revealed several negative aspects: declining financial performance, high debt leverage, reduced revenue and EBITDA guidance, and strategic uncertainties in Europe. Despite some productivity improvements, the overall outlook is weak, with market conditions remaining soft and financial pressures persisting. The Q&A session highlighted ongoing price/cost headwinds and execution risks in operational projects. Given the company's small market cap, these factors suggest a likely negative stock price reaction in the range of -2% to -8% over the next two weeks.
JELD-WEN Holding, Inc. (JELD) Q3 2025 Earnings Call Transcript
Unknown11-4
The earnings call reveals significant challenges: declining volumes, aggressive competitor pricing, and reduced EBITDA expectations. Although there are transformation initiatives and cost-saving measures, the market conditions remain weak, and guidance indicates ongoing struggles. The potential business sale is uncertain, and management's vague responses further amplify concerns. Given the market cap of $1.12 billion, the stock is likely to experience a negative reaction, falling between -2% to -8% over the next two weeks.
JELD-WEN Holding, Inc. (JELD) Q2 2025 Earnings Call Transcript
Unknown8-6
The earnings call reveals a challenging financial situation with declining revenues, high leverage, and negligible free cash flow. Despite plans for improvement, the immediate outlook remains weak. The Q&A section highlights concerns about financial leverage and lack of clarity on strategic actions. The company's market cap suggests moderate stock price sensitivity, but the overall sentiment is negative due to financial underperformance and uncertainties.
JELD Report
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