Reece Shares Slide as Weak Housing Markets Dent Profits

Highlights:

• Reece Limited (ASX: REH) posted a 24% drop in FY25 net profit to $317 million, with earnings per share falling to 49 cents.
• Weak housing markets in Australia, New Zealand, and the US weighed heavily on demand, pushing shares down 15.4% and trading at $11.05 at the time of writing.
• Despite headwinds, Reece expanded its branch network with 39 new locations and three acquisitions, while declaring a reduced final dividend of 11.86 cents per share.

Profit Decline Hits Bottom Line

Reece Limited (ASX: REH) shares tumbled 15.4% after the plumbing and bathroom supplier reported a sharp 24% drop in net profit after tax (NPAT) to $317 million for FY25. At the time of writing, the stock was trading at $11.05, down 6.04%. Earnings per share slipped to 49 cents from 65 cents a year earlier, reflecting weaker demand across key markets.

Housing Market Pressures

The company pointed to soft housing activity in Australia, New Zealand, and the United States as the primary driver of the earnings decline. Elevated mortgage rates and affordability constraints weighed on residential construction, limiting sales volumes. While sales revenue remained relatively stable at $8.98 billion, profitability was squeezed by lower demand and margin pressure.

Regional Performance

In Australia and New Zealand, revenue rose 1% to $3.88 billion, supported by acquisitions. However, EBIT dropped 17% to $339 million. In the US, sales fell 5% to US$3.3 billion, as housing market weakness and commodity-linked deflation impacted demand. EBIT in the region declined 23% to US$136 million.

Expansion and Outlook

Despite the slowdown, Reece continued its long-term growth strategy, adding 39 new branches globally and completing three acquisitions. The board declared a final dividend of 11.86 cents per share, bringing the total payout to 18.36 cents, down from 25.75 cents in FY24. Looking ahead, management expects housing markets to remain under pressure over the next 12–18 months but remains confident in long-term growth opportunities tied to population expansion and housing demand.

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