Highlights

  • James Hardie will close its manufacturing sites in Fontana, California, and Summerville, South Carolina, within 60 days.

  • The closures are expected to generate annualised cost savings of around $25 million from Q1 FY27.

  • FY26 earnings guidance remains unchanged despite one-time pre-tax charges of up to USD 44 million.

James Hardie Industries plc (ASX:JHX) has announced plans to close two manufacturing facilities in the United States as part of a broader effort to optimise its production network. The initiative is expected to deliver annualised cost savings of approximately USD 25 million beginning in the first quarter of fiscal year 2027, while the company has reaffirmed its guidance for the third quarter and full year of fiscal year 2026.

Manufacturing Network Optimisation

James Hardie said the decision forms part of its ongoing manufacturing optimisation program under the Hardie™ Operating System. The company will shut its facilities in Fontana, California, and Summerville, South Carolina, with production volumes redistributed across other manufacturing plants in North America.

The affected sites account for around 6% of James Hardie’s year-to-date North American volume. Manufacturing activities previously undertaken at these locations will be absorbed by other facilities within the network. The company confirmed that the Innovation and Research & Development operations located at the Fontana site will continue to operate.

Shift Toward Modern Production Facilities

Management said the closures follow a detailed review of the company’s manufacturing footprint after several years of investment in newer and more advanced facilities. Production volumes will be transferred to plants with higher levels of automation and efficiency, with the objective of improving utilisation across the remaining network.

The company stated that the changes are designed to support operational consistency, productivity improvements and long-term capacity requirements, while aligning manufacturing operations with its broader growth initiatives.

Financial Impact and Cost Savings

James Hardie expects the manufacturing optimisation actions to result in annualised cost savings of approximately USD 25 million, starting from the first quarter of fiscal year 2027. These savings are expected to come from reduced fixed costs and improved plant utilisation and are incremental to any cost synergies associated with the recent AZEK acquisition.

The company also expects to record one-time pre-tax charges in the range of USD 40 million to USD 44 million. These costs will primarily relate to employee severance and benefits, transition activities, contract terminations, facility exit costs, and asset impairments.

Charges Timing and Guidance Reaffirmed

The one-time charges are expected to be recognised mainly in the fourth quarter of fiscal year 2026, with an approximately even split between cash and non-cash items. Additional details are expected to be provided during the company’s upcoming third-quarter earnings call.

Despite the announced closures, James Hardie reaffirmed its previously issued guidance for both the third quarter and the full fiscal year 2026.

JHX shares were trading 2.20% higher at AUD 35.760 per share at the time of writing on 16 January 2026.