Shares of diversified conglomerate Griffon (NYSE:GFF) plunged 19% as of noon EST today. The company reported earnings for the fiscal fourth quarter and full year after the close yesterday.
Griffon reported a quarterly revenue increase of 15% and raised its quarterly dividend by 6.7%. So why are investors abandoning the stock today? It may be because they didn't get a boost of confidence from management.
The company operates under three business segments. Its consumer and professional products (CPP) segment consists of The AMES Companies. The maker of hand tools and products for home landscaping and care was founded in Massachusetts in 1774 and is one of the oldest continuously operating U.S. businesses.
The segment grew revenue 32% over the prior-year quarter as home-improvement initiatives increased across the country during the COVID-19 pandemic. But that growth trounced what the company reported in its home and building products and defense electronics segments. It reported quarterly revenue in those areas was up just 6% and flat, respectively.
While the company is receiving what may be short-term tailwinds from pandemic-related trends, management did not boost investor confidence with share buybacks. The company has $58 million remaining under its previously approved share repurchase program but had not used any of it during the entire fiscal year, which ended Sept. 30.
With shares already up more than 60% in the last six months, results weren't overwhelming enough for investors to stick around, especially if the home-improvement trends don't continue to boost the CPP businesses.