Reece Shares Rally Almost 4% as Plumbing Giant Rebounds After AGM Update Shows Strong Growth in ANZ Sales

SYDNEY — Shares of plumbing supplies company Reece Ltd. rose almost 4% on Monday, extending a volatile stretch for the stock after the company released a first-quarter sales update at its annual meeting last week.

Reece shares gained 66 cents, or 3.86%, to 17.75 Australian dollars in afternoon trading, after touching A$18.12. About 337,000 shares changed hands, valuing the company at roughly A$11 billion.

The rise stood out on a cautious day for the broader market, with the S&P/ASX 200 index trading slightly lower ahead of Tuesday's Reserve Bank of Australia rate decision.

It was not immediately clear what drove Monday's gain.

First-quarter sales update

At its annual general meeting on Friday, Reece reported first-quarter fiscal 2027 sales of A$2.5 billion. Sales rose 4.3% on a reported basis and 8.7% in constant currency terms.

Sales in Australia and New Zealand were up 12.8%, pointing to continued momentum in the company's home markets.

The update followed a sharp drop earlier in the week. On Wednesday, Reece shares fell 8.7%, making it one of the worst performers on the ASX 200 that day.

A strong year for the stock

Unlike many Australian stocks tied to housing, Reece has rebounded strongly over the past year. The shares are up nearly 52% over 12 months.

That recovery follows a brutal 2025. Shares plunged 22% in a single day in August last year, their biggest drop since 1978, after the company reported a 24% fall in annual profit and warned of a weak U.S. housing market.

Mixed fiscal 2026 results

For the year ended June 30, 2026, Reece reported sales revenue of A$9.38 billion, up 4.5%. Earnings before interest, taxes, depreciation and amortization were flat at A$901 million, while net profit after tax fell 2.8% to A$308 million.

The company lifted its final dividend and continued expanding in the United States, opening 25 new branches during the year.

But conditions remained tougher in the U.S. business. Sales there rose 6.5% in U.S. dollar terms, while EBITDA fell 4.5% as weak residential construction weighed on demand.

Reece shares fell after the results in August, though they later recovered.

Valuation questions

Some analysts have questioned the stock's valuation. At about A$15.61 in August, Reece shares traded at around 32 times fiscal 2026 earnings, a premium for a company reporting lower profit and still contending with a weak U.S. housing market.

The company has also been buying back shares, expanding its buyback program earlier this year.

Rates in focus

Reece's business is closely tied to housing and construction activity, making interest rates a key factor.

The Reserve Bank is widely expected to raise its cash rate by 25 basis points on Tuesday to 4.85%, its fifth increase this year. Higher borrowing costs could weigh on new home construction and renovation activity in Australia, while U.S. housing remains subdued.

What's next

Investors will be watching for signs that strong sales growth in Australia and New Zealand can offset weakness in the U.S., as well as the company's ability to protect margins amid competition and higher costs.

The next major update is expected with Reece's half-year results in February.