GMS reported a net loss of $21.4 million, or $0.55 per diluted share, for the third quarter of fiscal 2025, a significant decrease from net income of $51.9 million in the prior year. This loss included a $42.5 million non-cash goodwill impairment charge related to its Ames business. Net sales were $1.3 billion, a marginal 0.2% increase, but organic net sales declined by 6.7% due to soft end market demand and adverse winter weather.
Gross profit decreased by $21.6 million to $393.1 million, with gross margin contracting by 180 basis points to 31.2% due to weak demand, negative price and cost dynamics, and lower vendor incentive income. Adjusted EBITDA saw a substantial decrease of 27.3% to $93.0 million, with the Adjusted EBITDA margin falling to 7.4%. The company also announced an additional $20 million in annualized cost reductions, bringing the total annualized run rate to $50 million since the start of the fiscal year.
GMS generated $94.1 million in cash from operating activities and $83.1 million in free cash flow during the quarter. The company also completed the sale of a non-core installed insulation contracting business, generating a $7.4 million gain and $12.5 million in cash flow. Share repurchases totaled 445,163 shares for $39.3 million, with $218.4 million of authorization remaining.
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