Griffon (NYSE:GFF) outperformed analyst expectations for its fiscal first quarter on Thursday, reporting $649.1 million in revenue and adjusted earnings of $1.45 per share, even as the company unveiled a massive restructuring of its consumer portfolio.
The New York-based diversified holding company beat Wall Street’s revenue estimate of $619.4 million and adjusted EPS forecast of $1.33.
While top-line revenue grew 3%, reported net income dipped to $64.4 million ($1.41 per share), down from $70.9 million a year earlier.
This drop was largely due to higher material and labor costs in the Home and Building Products (HBP) segment, which operates through Clopay Corporation.
Despite those cost pressures, HBP revenue grew 3% to $408 million, driven by favorable pricing and a richer product mix in the residential garage door market.
The quarter’s "real" news, however, was a significant strategic shift.
Griffon announced it will form a joint venture with private equity firm ONCAP for its AMES U.S. and Canada businesses, while exploring "strategic alternatives" (likely a sale) for its AMES Australia and UK operations.
As part of this lean-out, the company will merge its Hunter Fan business into the HBP segment.