Cashbuild, a building retailer, anticipates a significant decrease in headline earnings per share (HEPS) when it announces its annual results. The projected drop is expected to be as much as 40%.
- Building retailers, including Builders Warehouse and Italtile, have observed a decline in sales following the 2021 home improvement boom. This boom occurred during the Covid-19 pandemic when people focused on enhancing their homes while working and socializing from home.
- The construction industry is experiencing a downturn due to weakened consumer demand and insufficient investment in infrastructure.
- Cashbuild is impairing goodwill in its investment in the lower-end hardware chain P&L. Cashbuild acquired P&L in 2016, but it has consistently underperformed. As a result, Cashbuild expects P&L stores to perform worse than previously anticipated, and the value of the investment is lower than recorded in their books. This impairment will lead to a decrease in earnings per share by 75% to 80%.
- Cashbuild is scheduled to release its annual results on August 30th.