James Hardie stock collapses nearly 35% as US housing slump hits building materials
The stock, listed in the US and Australia, saw its biggest one-day drop since 1973, according to Bloomberg data. The company's profit declined 28% year over year during its fiscal first quarter. Net sales tumbled 9% over the same period.
"Uncertainty is a common thread throughout conversations with customer and contractor partners," CEO Aaron Erter said during the company's earnings call.
James Hardie pointed to "softer demand," citing a slowdown in single-family construction activity, especially in the southern part of the US.
Read more about James Hardie's stock moves and today's market action.
High interest rates have hit virtually every corner of the housing market, resulting in stagnant sales and home starts, and weakness in big projects requiring home equity lines of credit or other loans.
"Homeowners are deferring large-ticket remodeling projects like re-siding, and affordability remains the key impediment to improvement in single-family new construction," Erter said.
Home improvement retailers Lowe's (LOW) and Home Depot (HD) echoed a similar sentiment, though shares of both companies fared far better following their results this week.
"Our customers still tell us that the rate environment is giving them pause on larger remodeling projects that would typically require debt financing," Home Depot CFO Richard McPhail told analysts during the company's earnings call on Tuesday.
Lowe's said Wednesday it expects the overall home improvement market to remain flat for the full year.
"We're still working through some short-term challenges, including elevated mortgage rates, cautious consumer affordability remains a pressure point that results in the lock-in effect that we've been seeing and also a depressed housing market," Lowe's CFO Brandon Sink said during the company's earnings call.
Tariffs have been a central concern for retailers under President Trump's trade policy, but both home improvement retailers have struck an optimistic tone about managing higher costs.
Home Depot noted that more than half of its products are sourced domestically and won't be affected by tariffs.
Lowe's said about 60% of its goods are US-sourced, with 20% coming from China, representing a significant shift from seven years ago.
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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