Builders FirstSource, Inc. (NASDAQ:BLDR) Q2 2020 Earnings Conference Call - Final Transcript
Jul 31, 2020 • 10:00 am ET
[Operator Instructions] Thank you. We can now go to our first question that comes from Matthew Bouley of Barclays.
Good morning everyone. Thanks for taking the question. Congrats on the results. Start off with a question on the guide for Q3. You're saying, I guess, core organic growth in the mid-single-digit range. And I think you mentioned, Peter, that June was up low single digit. Just any color I got from how July organic has trended? And sort of just what are the underlying housing start expectations that are informing that guide?
Yes. So I can start off and I'll let Chad finish up. The performance in June, July is obviously not done yet, but looking like it will be right in that same range, maybe a little bit better. We had talked earlier about the potential for an air pocket, wondering what the recovery might look like if there was some pent-up demand from the sort of that time frame, when everything was pretty much shutdown. Things have been I'm not telling you anything you don't already know, surprisingly resilient. And we're very pleased with the sort of the overall sustainability of the trend that things have come back. And as you've heard as we've heard from many of the builders around the country, there is a tremendous amount of optimism. There's no strength in that homebuilding market. So that's really the rationale that we're giving ourselves for that mid-single-digits third quarter growth number in that single-family space. It's still a little bit open in terms of where it will land could be better. As always, there's enough volatility in COVID land where it could be worse. But we're feeling pretty good about it on balance and the orders rates of what we're seeing.
Yes. And I'll just add, you've seen the commentary from the builders in recent weeks, very, very positive. The traffic is up, new orders are up. Just a little bit surprisingly, it's been so resilient, and there still seems to be a lot of tailwinds. Rates are low. I think with everything going on in our country right now, people desire more space. In many cases, commute to becoming less of a factor for people, which allows them to move further from downtown areas. I think there's probably a lot of people of aging parents looking to create space for them as opposed to looking to put them in long-term care facilities. So there's just a lot of tailwinds right now. People aren't traveling as much. A lot of I think they've given more thought to their living conditions with the dynamics that are going on right. So as Peter said, with any guide or forecast, there's potential for upside or downside. We always try to be pretty measured about our guidance and leave ourselves a little legroom, and this quarter is no different. And but we're feeling really good about how things are shaping up right now.
Perfect. And then I guess on the gross