Caesarstone: $18M Net Loss in 2Q 2025
MP MENASHE, Israel – Surfaces manufacturer Caesarstone Ltd. faced a tough road in the first half of 2025, and it isn’t going to get any smoother down the line this year.
New U.S. tariffs present a challenge to a company already dealing with weakening market demand and increasing injury claims related to worker silicosis. A net loss of $18.5 million in this year’s second quarter – double the loss of the same quarter in 2024 – is tough news to bring to the company’s mid-year earnings report.
However, Caesarstone CEO Yos Shiran also noted a strong net cash position of $72.4 million and company-wide strategic initiatives, along with its rollout of low-silica surfaces and its porcelain-panel business, to keep the company moving forward.
“Our second quarter results reflect persistent softness, mainly in repair and remodel activity across the industry,” he said on the company’s quarterly earnings call last week. “We are taking decisive actions to align our cost structure and improve profitability.”
Key to that effort is a doubling-down on cost reductions from 2024 levels throughout the company, going from a previously announced $10 million to $20 million by year’s end.
Caesarstone also continues its efforts to outsource manufacturing of its quartz surfaces.
“We have shifted over 70% of our production to our global manufacturing network,” Shiran said, “which provides us with enhanced operational flexibility.”
Shiran also noted the launch of new products coming during the rest of this year and into 2026. The company announced the availability of its new ICON low-silica “fusion” surfaces last month.
Caesarstone experienced a tough second quarter in the United States, the company’s largest market. 2Q 2025 sales of $49.6 million represented a 17% year-over-year loss from a company that provides half of Caesarstone’s worldwide sales.
Company CFO Nahum Trost said the decline came due to “softer market conditions in the residential channel, including business for stone suppliers, as well as challenges in the commercial segment.”
One bright spot in the U.S. market, Trost noted, came with Caesarstone’s sales through Lowe’s big-box stores, with “double-digit percentage” increases from the same time last year.
Sales in Canada declined by 12.5% from 2Q 2024, with “softer performance in our core business, due mainly to market conditions, partially offset by higher levels of big-box activity,” Trost added.
U.S. sales for the rest of the year will also be affected by new tariffs finally going into effect this month. The global distribution of Caesarstone’s production likely means different levels of duties based on the manufacturing countries.
“Based on our mix of sources, we estimate the tariff impact in the range of 15 to 25% on products sold in the United States,” Trost said. “The U.S, represents approximately half of our total revenues based on our current inventory levels; we expect the impact of these tariffs to be more pronounced as we move through the year.
“We are evaluating pricing actions in the US to balance market competitiveness with margin protection,” he added.
Caesarstone also stated in its earnings release that, as of the end of June, it’s involved with “lawsuits involving 423 individuals alleging injuries related to exposure to respirable crystalline silica dust.” The United States is the largest source, with 233 claims, followed by Australia with 141 and Israel with 49.
Trost said Caesarstone won a California jury trial in one case during this year’s second quarter; the company lost one case last year (which is now on appeal) and settled one earlier this year.
Caesarstone recorded a $44.9 million provision, along with $25.6 million in insurance receiveables, at the end of this year’s second quarter in what it called its “best estimate of probable and reasonably estimable losses associated with pending claims.”
“For accounting purposes, we estimate the loss for 25 of the remaining U.S. cases as only reasonably possible, with a range between $0.5 million to $13 million per claim,” Trost added. “The other claims are at an early stage in which the amount of the possible loss cannot be reasonably estimated.”
Trost added that Caesarstone and some U.S. insurance companies began last month for “declaratory relief” from U.S. courts on Caesarstone’s product-liability policies and available limits.
“f there is a change in the assessment for the outcome of the claims or the insurance coverage limits through the course of the trial processes, such changes could lead to a material and adverse impact on our business, financial position, results of operations or cash flows,” according to the company in its release of earnings.
Trost also noted that there’s significant movement in selling Caesarstone’s former quartz-surface production facility in Richmond Hill, Ga.
“We have granted the potential buyer the right to acquire the site at a price approximating its book’s value,” he said. “The potential buyer has commenced the due diligence.”
Caesarstone is traded on the NASDAQ under the symbol CSTE.