Reece Limited Q1 FY25 Update

Reece Limited (ASX: REH) released its Q1 FY25 sales update, reporting sales revenue of AU$2,232 million for the first quarter. This marks a 5% decrease compared to last year's period and a 4% decrease on a constant currency basis. The challenging trading environment persists due to ongoing softness in housing activity in both regions. Sales revenue in Australia and New Zealand remained flat, with underlying volumes softening compared to last year's period. However, recent bolt-on M&A activity in the region supported the sales. In the United States, sales revenue decreased by 6.5% in USD, reflecting lower volumes and ongoing deflation in select categories. Adverse weather conditions also impacted US sales in Q1.

Despite these challenges, Peter Wilson, CEO of Reece Group, expressed confidence in the company's ability to weather the storm. The lead indicators continue to be challenging in both regions as it looks ahead. The company has a track record of investing through the cycle to build a more substantial business in the long term. Despite the recent softness, it continues investing in growth and remains focused on strengthening its core capabilities and delivering its customer promise. Reece expects Adjusted EBIT for the first half of FY25 to be within the range of AU$300 million – AU$320 million.

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