UFP Industries Inc.
08/05/2026 | Press release | Distributed by Public on 08/05/2026 09:43
Quarterly Report for Quarter Ending June 27, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
UFP Industries, Inc. is a holding company with subsidiaries in North America, Europe, Asia, and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. We are headquartered in Grand Rapids, Michigan. Our business segments are functionally interdependent and are supported by common corporate services, such as accounting and finance, information technology, human resources, marketing, purchasing, transportation, legal and compliance, among others. We regularly invest in automation and implement best practices to improve the efficiency of our manufacturing facilities across each of the segments. The results and improvements from these investments are shared among the segments. This exchange of ideas drives faster innovation for new products, processes, and product improvements.
Importantly, our structure allows us to evaluate market conditions and opportunities, while effectively allocating capital and resources to the appropriate segments and business units. We believe that the diversification and manner in which we operate our business segments provides an inherent hedge against the inevitable business cycles that our markets experience and over which we have little control. Accordingly, our goal is to provide stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact of volatile lumber market conditions experienced by traditional lumber companies.
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management's beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like "anticipates," "believes," "confident," "estimates," "expects," "forecasts," "likely," "plans," "projects," "should," variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; changes in tariffs, import/export regulations, and other trade policies; concentration of sales to customers; the success of vertical integration strategies; excess capacity or supply chain challenges; our ability to make successful business acquisitions; government regulations, particularly involving environmental and safety regulations; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; artificial intelligence; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
OVERVIEW
Our results for the second quarter of 2026 include the following highlights:
| ● | Our net sales increased 3% compared to the second quarter of 2025, consisting of a 1% increase in organic unit sales (excluding growth from acquisitions within the last 12 months) and a 2% increase attributable to acquisitions. Organic unit sales increased 4% in our packaging segment, partially offset by a 2% decrease in our construction segment and a 1% decrease in our retail segment. Acquired businesses contributed 4%, 2%, and 1% unit increases in our packaging, retail, and construction segments, respectively. Overall selling prices were flat as higher selling prices in our ProWood business unit, driven by the pass-through of higher commodity lumber costs to customers, were offset by competitive pricing pressure in our Site Built business unit. |
UFP INDUSTRIES, INC.
| ● | Our gross profit decreased by $23 million, or 7%, compared to the same period of the prior year. By segment, gross profit decreased by $10 million in Construction, $10 million in Packaging, and $3 million in Corporate, while Retail increased by $1 million and All Other remained flat. The overall decrease in our gross profit is primarily due to higher transportation costs across all of the business units. The impact of weaker demand on volumes and pricing in our Site Built and Pallet One was more than offset by improvements in our other business units. |
| ● | Our operating profits decreased $20 million, or 16%, compared to the second quarter of 2025. The overall decrease is a result of the decrease in gross profit mentioned above and a $1 million increase in selling, general, and administrative ("SG&A") expenses, partially offset by a $4 million decrease in net losses on the disposition and impairment of assets. The increase in SG&A is due to acquired business and professional and legal fees associated with acquisitions. |
| ● | Our cash flows from operations were $61 million in the first six months of 2026 compared to $113 million during the first six months of 2025. The $52 million decline resulted from a decrease in net earnings and non-cash expenses of $50 million and an increase in our investment in net working capital since year end that was $2 million higher in the first six months of 2026 than it was in the first six months of 2025. We anticipate that this increase in net working capital will convert to cash by early in the fourth quarter as we move past the typical seasonal peak in our net working capital. |
| ● | Our Cash and cash equivalents at the end of June 2026 was $597 million compared to $842 million at the end of June 2025. The decline in our cash is primarily due to share repurchase activity and recent business acquisitions. Our unused borrowing capacity under our revolving credit facility and a shelf agreement with certain lenders along with our cash resulted in total liquidity of approximately $1.9 billion at the end of the second quarter of 2026. |
HISTORICAL LUMBER PRICES
We experience significant fluctuations in the cost of commodity lumber products from primary producers ("Lumber Market"). The following table presents the Random Lengths framing lumber composite price:
|
|
|
|
|
|
|
|
|
|
|
Random Lengths Composite |
||||
|
|
|
Average $/MBF |
||||
|
|
|
2026 |
|
2025 |
||
|
January |
|
$ |
400 |
|
$ |
434 |
|
February |
|
436 |
|
442 |
||
|
March |
|
443 |
|
479 |
||
|
April |
|
486 |
|
|
485 |
|
|
May |
|
484 |
|
|
453 |
|
|
June |
|
491 |
|
|
431 |
|
|
|
|
|
|
|
|
|
|
Second quarter average |
|
$ |
487 |
|
$ |
456 |
|
Year-to-date average |
|
$ |
457 |
|
$ |
454 |
|
|
|
|
|
|
|
|
|
Second quarter percentage change |
|
6.8 |
% |
|
||
|
Year-to-date percentage change |
|
0.7 |
% |
|
||
UFP INDUSTRIES, INC.
In addition, a Southern Yellow Pine ("SYP") composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 76% of our total lumber purchases.
|
|
|
|
|
|
|
|
|
|
|
Random Lengths SYP |
||||
|
|
|
Average $/MBF |
||||
|
|
|
2026 |
|
2025 |
||
|
January |
|
$ |
392 |
|
$ |
386 |
|
February |
|
415 |
|
401 |
||
|
March |
|
422 |
|
424 |
||
|
April |
|
484 |
|
|
446 |
|
|
May |
|
445 |
|
|
445 |
|
|
June |
|
453 |
|
|
381 |
|
|
|
|
|
|
|
|
|
|
Second quarter average |
|
$ |
461 |
|
$ |
424 |
|
Year-to-date average |
|
$ |
435 |
|
$ |
414 |
|
|
|
|
|
|
|
|
|
Second quarter percentage change |
|
|
8.7 |
% |
|
|
|
Year-to-date percentage change |
|
|
5.1 |
% |
|
|
Finally, a Spruce Pine Fir ("SPF") composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 11% of our total lumber purchases.
|
|
|
|
|
|
|
|
|
|
|
Random Lengths SPF |
||||
|
|
|
Average $/MBF |
||||
|
|
|
2026 |
|
2025 |
||
|
January |
|
$ |
430 |
|
$ |
480 |
|
February |
|
457 |
|
479 |
||
|
March |
|
464 |
|
526 |
||
|
April |
|
491 |
|
|
504 |
|
|
May |
|
496 |
|
|
446 |
|
|
June |
|
508 |
|
|
444 |
|
|
|
|
|
|
|
|
|
|
Second quarter average |
|
$ |
498 |
|
$ |
465 |
|
Year-to-date average |
|
$ |
474 |
|
$ |
480 |
|
|
|
|
|
|
|
|
|
Second quarter percentage change |
|
|
7.1 |
% |
|
|
|
Year-to-date percentage change |
|
|
(1.3) |
% |
|
|
Lumber prices increased during the second quarter of 2026, after declining during the first quarter. Commodity lumber costs increased due to mill curtailments and higher duties on Canadian lumber, partially offset by weak overall demand resulting from lower consumer sentiment and greater economic uncertainty.
A change in lumber prices impacts profitability of products sold with fixed and variable prices, as discussed below.
UFP INDUSTRIES, INC.
IMPACT OF THE LUMBER MARKET ON OUR OPERATING RESULTS
We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 43.7% and 42.9% of our total net sales in the first six months of 2026 and 2025, respectively.
Our gross margins are impacted by (1) the relative level of the Lumber Market (i.e. whether prices are higher or lower from comparative periods), and (2) the trend in the market price of lumber (i.e. whether the price of lumber is increasing or decreasing within a period or from period to period). Additionally, as explained below, product categories can be priced differently. Some of our products have fixed selling prices, while the selling prices of other products are indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, the level and trend of the Lumber Market impact our products differently.
Below is a general description of the primary ways in which our products are priced.
| ● | Products with fixed selling prices. These products include value-added products, such as manufactured items, sold within all segments. Prices for these products are generally fixed at the time of the sales quotation for a specified period of time. In order to reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers or purchase necessary inventory for these sales commitments. The time period limitation eventually allows us to periodically re-price our products for changes in lumber costs from our suppliers. |
| ● | Products with selling prices indexed to the reported Lumber Market with a fixed dollar "adder" to cover conversion costs and profit. These products primarily include treated lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing industry. For these products, we estimate customers' needs and carry appropriate levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins. We believe our sales of these products are at their highest relative level in our second quarter, primarily due to pressure-treated lumber sold in our retail segment. |
For each of the product pricing categories above, our margins are exposed to changes in the trend of lumber prices. As a result of the balance in our net sales to each of our end markets, we believe our gross profit is more stable compared to our competitors who are less diversified.
The greatest risk associated with changes in the trend of lumber prices is on the following products:
| ● | Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market. In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This includes treated lumber, which comprised approximately 22% of our total net sales in the first six months of 2026. This exposure is less significant with remanufactured lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing market due to the higher rate of inventory turnover. We attempt to mitigate the risk associated with treated lumber through managed inventory programs with our vendors. We estimate that 21% of our total purchases for the first six months of 2026 were transacted under these programs. (Please refer to the "Risk Factors" section of our annual report on form 10-K, filed with the United States Securities and Exchange Commission.) |
| ● | Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects. We attempt to mitigate this risk through our purchasing practices and longer vendor commitments. |
UFP INDUSTRIES, INC.
In addition to the impact of Lumber Market trends on gross margins, changes in the level of the market cause fluctuations in gross margins when comparing operating results from period to period. This is explained in the following example, which assumes the price of lumber has increased from period one to period two, with no changes in the trend within each period.
|
|
|
|
|
|
|
|
|
|
|
|
Period 1 |
|
Period 2 |
|||
|
Lumber cost |
|
$ |
300 |
|
$ |
400 |
|
|
Conversion cost |
|
50 |
|
50 |
|
||
|
= Product cost |
|
350 |
|
450 |
|
||
|
Adder |
|
50 |
|
50 |
|
||
|
= Sell price |
|
$ |
400 |
|
$ |
500 |
|
|
Gross margin |
|
12.5 |
% |
10.0 |
% |
||
As is apparent from the preceding example, the level of lumber prices does not impact our overall profits but does impact our margins. Gross margins and operating margins are negatively impacted during periods of high lumber prices; conversely, we experience margin improvement when lumber prices are relatively low.
IMPACT OF TARIFFS ON OUR OPERATING RESULTS
The trade landscape continues to evolve. Since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of June 27, 2026, 84% of our lumber purchases were from domestic suppliers, 9% were imported from Canada, and 7% were imported from other international suppliers.
In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA"), which the U.S. administration relied on to impose certain tariffs, does not authorize the administration to impose tariffs. As a result of this ruling, the U.S. Court of International Trade ("CIT") issued an order directing the U.S. Customs and Border Protection ("CBP") agency to begin formalizing a process for refunds. As of June 27, 2026, we have received $3 million in tariff refunds and recorded a receivable of $20 million related to the expected refund of tariffs previously paid under the IEEPA, including applicable interest, with the corresponding offsets of $20 million to Cost of goods sold, $1 million to interest income, and $2 million as a reduction to the carrying value of inventory on hand. We have certain contractual obligations that will require us to refund customers certain of the tariff refunds we receive. If we collect the entire $23 million of tariffs paid pursuant to the IEEPA, we will be required to refund approximately $11 million to customers. As a result, we recorded $11 million as a liability as of June 27, 2026, with a corresponding reduction to Net sales. Of the $9 million net increase in Earnings from operations relating to these tariff refunds, $6 million related to products sold in the current quarter and $3 million related to products sold in prior quarters. Subsequent to June 27, 2026, we received approximately $18 million of the tariff refund receivable, including related interest.
IMPACT OF HIGHER TRANSPORTATION COSTS ON OUR OPERATING RESULTS
A combination of macroeconomic and geopolitical events and capacity constraints in the flatbed carrier market have contributed to an increase in our input costs across the enterprise, primarily related to fuel and transportation. In the second quarter of 2026, we estimate that we incurred an additional $31 million of these costs which adversely impacted our profitability reflecting increased fuel costs and flatbed carrier rates as a result of many small carriers exiting the market. This has increased our cost in the "spot" market with market rates up over 30% excluding fuel. These market conditions have resulted in $6 million in additional fuel costs and $25 million in higher flatbed carrier costs. Our efforts to pass through these higher costs to our customers have been concentrated on fuel and through surcharges and increased product pricing, which resulted in an offset totaling approximately $4 million for the quarter. We plan to negotiate with our customers to pass through the remaining increase in our transportation costs, however, there are factors beyond our control, including contract terms and market conditions, that may impact our ability to be successful in these efforts. Please see "Risk Factors" below for more information.
UFP INDUSTRIES, INC.
BUSINESS COMBINATIONS AND ASSET PURCHASES
We completed three business combinations in the second quarter of 2026 and two in fiscal 2025. The annual historical sales attributable to these acquisitions are approximately $183 million in aggregate. These business combinations are not significant to our quarterly results and thus proforma results for 2026 and 2025 are not presented. See Notes to the Unaudited Interim Condensed Consolidated Financial Statements, Note F, "Business Combinations" for additional information.
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the components of our Unaudited Condensed Consolidated Statements of Earnings as a percentage of net sales.
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||
|
|
June 27, |
|
June 28, |
|
|
June 27, |
|
June 28, |
|
|||
|
|
2026 |
2025 |
|
2026 |
2025 |
|||||||
|
Net sales |
100.0 |
% |
100.0 |
% |
|
100.0 |
% |
100.0 |
% |
|||
|
Cost of goods sold |
84.6 |
83.0 |
|
84.3 |
83.1 |
|||||||
|
Gross profit |
15.4 |
17.0 |
|
15.7 |
16.9 |
|||||||
|
Selling, general, and administrative expenses |
9.9 |
10.1 |
|
10.7 |
10.5 |
|||||||
|
Net gain on disposition and impairment of assets |
- |
|
0.2 |
|
|
- |
|
0.1 |
|
|||
|
Other losses (gains), net |
- |
- |
|
- |
- |
|||||||
|
Earnings from operations |
5.5 |
6.7 |
|
5.0 |
6.3 |
|||||||
|
Interest and other |
(0.5) |
(0.5) |
|
(0.4) |
(0.5) |
|||||||
|
Earnings before income taxes |
6.0 |
7.2 |
|
5.4 |
6.8 |
|||||||
|
Income taxes |
1.6 |
1.7 |
|
1.4 |
1.5 |
|||||||
|
Net earnings |
4.4 |
5.5 |
|
4.0 |
5.3 |
|||||||
|
Less net earnings attributable to noncontrolling interest |
- |
- |
|
- |
- |
|||||||
|
Net earnings attributable to controlling interest |
4.4 |
% |
5.5 |
% |
|
4.0 |
% |
5.2 |
% |
|||
Note: Actual percentages are calculated and may not sum to total due to rounding.
As a result of the impact of the level of lumber prices on the percentages displayed in the table above (see Impact of the Lumber Market on Our Operating Results), we believe it is useful to compare our change in units sold with our change in gross profit, selling, general, and administrative expenses, and operating profits as presented in the following table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change |
|
Percentage Change |
||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
|
June 27, |
|
June 28, |
|
June 27, |
|
June 28, |
||||
|
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
||||
|
Units sold |
3.0 |
% |
|
(3.0) |
% |
|
(2.0) |
% |
|
(2.0) |
% |
|
|
Gross profit |
|
(7.2) |
|
|
(13.8) |
|
|
(9.4) |
|
|
(15.7) |
|
|
Selling, general, and administrative expenses |
|
0.4 |
|
|
(8.9) |
|
|
(0.7) |
|
|
(8.6) |
|
|
Earnings from operations |
|
(16.0) |
|
|
(22.6) |
|
|
(22.2) |
|
|
(26.5) |
|
The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of weak consumer demand reflecting lower selling prices as well as higher transportation costs, which have reduced our gross profit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
|
June 27, |
|
|
June 28, |
|
|
June 27, |
|
|
June 28, |
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
||||
|
Gross profit |
$ |
290,235 |
|
$ |
312,734 |
|
$ |
526,124 |
|
$ |
580,930 |
|
Selling, general, and administrative expenses |
$ |
185,720 |
|
$ |
184,995 |
|
$ |
358,603 |
|
$ |
361,249 |
|
SG&A as percentage of gross profit |
64.0% |
|
59.2% |
|
68.2% |
|
62.2% |
||||
UFP INDUSTRIES, INC.
Operating Results by Segment:
Our business segments consist of Retail, Packaging and Construction, and align with the end markets we serve. Among other advantages, this structure allows for a specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in "All Other" in the table below. The "Corporate" segment includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates.
The following tables present our operating results, for the periods indicated, by segment (in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 27, 2026 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
818,743 |
|
$ |
458,245 |
|
$ |
526,777 |
|
$ |
76,927 |
|
$ |
2,245 |
|
$ |
1,882,937 |
|
Cost of goods sold |
|
704,096 |
|
397,886 |
|
436,449 |
|
64,058 |
|
|
(9,787) |
|
|
1,592,702 |
||||
|
Gross profit |
|
|
114,647 |
|
|
60,359 |
|
|
90,328 |
|
|
12,869 |
|
|
12,032 |
|
|
290,235 |
|
Selling, general, administrative expenses |
|
|
62,717 |
|
|
45,580 |
|
|
63,930 |
|
|
10,088 |
|
|
3,405 |
|
|
185,720 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
1,780 |
|
|
106 |
|
|
37 |
|
|
74 |
|
|
(1,695) |
|
|
302 |
|
Other losses, net |
|
404 |
|
|
- |
|
|
129 |
|
|
243 |
|
|
21 |
|
|
797 |
|
|
Earnings from operations |
|
$ |
49,746 |
|
$ |
14,673 |
|
$ |
26,232 |
|
$ |
2,464 |
|
$ |
10,301 |
|
$ |
103,416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 28, 2025 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
788,224 |
|
$ |
428,669 |
|
$ |
551,590 |
|
$ |
65,026 |
|
$ |
1,865 |
|
$ |
1,835,374 |
|
Cost of goods sold |
|
674,484 |
|
358,087 |
|
451,401 |
|
51,789 |
|
|
(13,121) |
|
|
1,522,640 |
||||
|
Gross profit |
|
|
113,740 |
|
|
70,582 |
|
|
100,189 |
|
|
13,237 |
|
|
14,986 |
|
|
312,734 |
|
Selling, general, administrative expenses |
|
|
58,642 |
|
|
43,148 |
|
|
63,727 |
|
|
10,398 |
|
|
9,080 |
|
|
184,995 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
1,083 |
|
|
1,225 |
|
|
211 |
|
|
2,616 |
|
|
(1,305) |
|
|
3,830 |
|
Other losses (gains), net |
|
536 |
|
|
- |
|
|
191 |
|
|
302 |
|
|
(211) |
|
|
818 |
|
|
Earnings (loss) from operations |
|
$ |
53,479 |
|
$ |
26,209 |
|
$ |
36,060 |
|
$ |
(79) |
|
$ |
7,422 |
|
$ |
123,091 |
UFP INDUSTRIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 27, 2026 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
1,349,919 |
|
$ |
852,338 |
|
$ |
992,290 |
|
$ |
145,432 |
|
$ |
4,225 |
|
$ |
3,344,204 |
|
Cost of goods sold |
|
1,154,710 |
|
731,631 |
|
824,345 |
|
120,840 |
|
|
(13,446) |
|
|
2,818,080 |
||||
|
Gross profit |
|
|
195,209 |
|
|
120,707 |
|
|
167,945 |
|
|
24,592 |
|
|
17,671 |
|
|
526,124 |
|
Selling, general, administrative expenses |
|
|
118,763 |
|
|
90,783 |
|
|
125,756 |
|
|
19,066 |
|
|
4,235 |
|
|
358,603 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
1,848 |
|
|
(64) |
|
|
50 |
|
|
75 |
|
|
(3,259) |
|
|
(1,350) |
|
Other losses, net |
|
|
459 |
|
|
- |
|
|
552 |
|
|
349 |
|
|
14 |
|
|
1,374 |
|
Earnings from operations |
|
$ |
74,139 |
|
$ |
29,988 |
|
$ |
41,587 |
|
$ |
5,102 |
|
$ |
16,681 |
|
$ |
167,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 28, 2025 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
1,395,607 |
|
$ |
838,677 |
|
$ |
1,067,530 |
|
$ |
125,324 |
|
$ |
3,755 |
|
$ |
3,430,893 |
|
Cost of goods sold |
|
1,200,572 |
|
698,521 |
|
876,541 |
|
101,455 |
|
|
(27,126) |
|
|
2,849,963 |
||||
|
Gross profit |
|
|
195,035 |
|
|
140,156 |
|
|
190,989 |
|
|
23,869 |
|
|
30,881 |
|
|
580,930 |
|
Selling, general, administrative expenses |
|
|
113,997 |
|
|
90,917 |
|
|
126,511 |
|
|
18,860 |
|
|
10,964 |
|
|
361,249 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
1,107 |
|
|
1,257 |
|
|
331 |
|
|
2,616 |
|
|
(1,557) |
|
|
3,754 |
|
Other losses (gains), net |
|
|
318 |
|
|
- |
|
|
271 |
|
|
248 |
|
|
(253) |
|
|
584 |
|
Earnings from operations |
|
$ |
79,613 |
|
$ |
47,982 |
|
$ |
63,876 |
|
$ |
2,145 |
|
$ |
21,727 |
|
$ |
215,343 |
The following tables present the components of our operating results, for the periods indicated, as a percentage of net sales by segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 27, 2026 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
86.0 |
|
86.8 |
|
82.9 |
|
83.3 |
|
- |
|
84.6 |
|
|
Gross profit |
|
14.0 |
|
13.2 |
|
17.1 |
|
16.7 |
|
- |
|
15.4 |
|
|
Selling, general, administrative expenses |
|
7.7 |
|
9.9 |
|
12.1 |
|
13.1 |
|
- |
|
9.9 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
0.2 |
|
- |
|
- |
|
0.1 |
|
- |
|
- |
|
|
Other losses, net |
|
- |
|
- |
|
- |
|
0.3 |
|
- |
|
- |
|
|
Earnings from operations |
|
6.1 |
% |
3.2 |
% |
5.0 |
% |
3.2 |
% |
- |
|
5.5 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
UFP INDUSTRIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 28, 2025 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
85.6 |
|
83.5 |
|
81.8 |
|
79.6 |
|
- |
|
83.0 |
|
|
Gross profit |
|
14.4 |
|
16.5 |
|
18.2 |
|
20.4 |
|
- |
|
17.0 |
|
|
Selling, general, administrative expenses |
|
7.4 |
|
10.1 |
|
11.6 |
|
16.0 |
|
- |
|
10.1 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
0.1 |
|
0.3 |
|
- |
|
4.0 |
|
- |
|
0.2 |
|
|
Other losses (gains), net |
|
0.1 |
|
- |
|
- |
|
0.5 |
|
- |
|
- |
|
|
Earnings (loss) from operations |
|
6.8 |
% |
6.1 |
% |
6.5 |
% |
(0.1) |
% |
- |
|
6.7 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 27, 2026 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
85.5 |
|
85.8 |
|
83.1 |
|
83.1 |
|
- |
|
84.3 |
|
|
Gross profit |
|
14.5 |
|
14.2 |
|
16.9 |
|
16.9 |
|
- |
|
15.7 |
|
|
Selling, general, administrative expenses |
|
8.8 |
|
10.7 |
|
12.7 |
|
13.1 |
|
- |
|
10.7 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
0.1 |
|
- |
|
- |
|
0.1 |
|
- |
|
- |
|
|
Other losses, net |
|
- |
|
- |
|
0.1 |
|
0.2 |
|
- |
|
- |
|
|
Earnings from operations |
|
5.5 |
% |
3.5 |
% |
4.2 |
% |
3.5 |
% |
- |
|
5.0 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 28, 2025 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
86.0 |
|
83.3 |
|
82.1 |
|
81.0 |
|
- |
|
83.1 |
|
|
Gross profit |
|
14.0 |
|
16.7 |
|
17.9 |
|
19.0 |
|
- |
|
16.9 |
|
|
Selling, general, administrative expenses |
|
8.2 |
|
10.8 |
|
11.9 |
|
15.0 |
|
- |
|
10.5 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
0.1 |
|
0.1 |
|
- |
|
2.1 |
|
- |
|
0.1 |
|
|
Other losses (gains), net |
|
- |
|
- |
|
- |
|
0.2 |
|
- |
|
- |
|
|
Earnings from operations |
|
5.7 |
% |
5.7 |
% |
6.0 |
% |
1.7 |
% |
- |
|
6.3 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
UFP INDUSTRIES, INC.
NET SALES
We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments; for national home centers and other retailers; for engineered wood components, structural lumber, and other products for factory-built and site-built residential and commercial construction; customized interior fixtures used in a variety of retail stores, commercial, and other structures; and structural wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:
| ● | Maximizing unit sales growth while achieving return on investment goals. The following table presents estimates, for the periods indicated, of our percentage change in net sales attributable to changes in overall selling prices versus changes in units shipped by segment. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change |
||||||||||
|
|
|
Second Quarter 2026 versus Second Quarter 2025 |
||||||||||
|
|
|
in Sales |
|
in Selling |
|
in Units |
|
Acquisition Unit Change |
|
Organic Unit Change |
|
|
|
Retail |
|
3.9 |
% |
2.9 |
% |
1.0 |
% |
2.0 |
% |
(1.0) |
% |
|
|
Packaging |
|
6.9 |
% |
(1.1) |
% |
8.0 |
% |
4.0 |
% |
4.0 |
% |
|
|
Construction |
|
(4.5) |
% |
(3.5) |
% |
(1.0) |
% |
1.0 |
% |
(2.0) |
% |
|
|
All Other |
|
18.3 |
% |
1.3 |
% |
17.0 |
% |
- |
% |
17.0 |
% |
|
|
Corporate |
|
20.4 |
% |
- |
% |
20.4 |
% |
- |
% |
20.4 |
% |
|
|
Total Sales |
|
2.6 |
% |
(0.4) |
% |
3.0 |
% |
2.0 |
% |
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change |
||||||||||
|
|
|
Year-to-Date 2026 versus Year-to-Date 2025 |
||||||||||
|
|
|
in Sales |
|
in Selling |
|
in Units |
|
Acquisition Unit Change |
|
Organic Unit Change |
|
|
|
Retail |
|
(3.3) |
% |
1.7 |
% |
(5.0) |
% |
1.0 |
% |
(6.0) |
% |
|
|
Packaging |
|
1.6 |
% |
(1.4) |
% |
3.0 |
% |
3.0 |
% |
- |
% |
|
|
Construction |
|
(7.0) |
% |
(4.0) |
% |
(3.0) |
% |
1.0 |
% |
(4.0) |
% |
|
|
All Other |
|
16.0 |
% |
(1.0) |
% |
17.0 |
% |
- |
% |
17.0 |
% |
|
|
Corporate |
|
12.5 |
% |
- |
% |
12.5 |
% |
- |
% |
12.5 |
% |
|
|
Total Sales |
|
(2.5) |
% |
(0.5) |
% |
(2.0) |
% |
1.0 |
% |
(3.0) |
% |
|
| ● | Expanding geographically in our higher margin core businesses. |
| ● | Increasing our sales of "value-added" products and enhancing our product offering with new or improved products. Value-added products generally consist of fencing, decking, lattice, and other specialty products sold in the Retail segment; structural and protective packaging and machine-built pallets sold in the Packaging segment; engineered wood components, customized interior fixtures, manufactured and assembled concrete forms sold in the Construction segment; and "wood alternative" products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood-alternative products consist of products manufactured with wood and non-wood composites, metals and plastics sold in each of our segments. Although we consider the treatment of dimensional lumber and panels with certain chemical preservatives a value-added process, treated lumber is not presently included in the value-added sales totals. Remanufactured lumber and panels that are components of finished goods are also generally categorized as "commodity-based" products. We estimate that approximately 80% of our sales consist of products we manufacture at our locations, while 20% of our sales consist of products manufactured by suppliers that we inventory and distribute to customers. |
UFP INDUSTRIES, INC.
The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total sales by our segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Three Months Ended June 27, 2026 |
|
Three Months Ended June 28, 2025 |
|
|||||||||||||
|
|
|
Value-Added |
|
Commodity-Based |
|
Value-Added |
|
Commodity-Based |
|
|||||||||
|
Retail |
51.7 |
% |
|
48.3 |
% |
52.6 |
% |
|
47.4 |
% |
|
|||||||
|
Packaging |
|
76.5 |
% |
|
23.5 |
% |
|
74.8 |
% |
|
25.2 |
% |
|
|||||
|
Construction |
|
82.8 |
% |
|
17.2 |
% |
|
80.7 |
% |
|
19.3 |
% |
|
|||||
|
All Other |
|
76.1 |
% |
|
23.9 |
% |
|
66.4 |
% |
|
33.6 |
% |
|
|||||
|
Corporate |
|
72.6 |
% |
|
27.4 |
% |
|
81.0 |
% |
|
19.0 |
% |
|
|||||
|
Total Sales |
|
67.3 |
% |
|
32.7 |
% |
|
67.0 |
% |
|
33.0 |
% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Six Months Ended June 27, 2026 |
|
Six Months Ended June 28, 2025 |
|
|||||||||||||
|
|
|
Value-Added |
|
Commodity-Based |
|
Value-Added |
|
Commodity-Based |
|
|||||||||
|
Retail |
51.4 |
% |
|
48.6 |
% |
52.1 |
% |
|
47.9 |
% |
|
|||||||
|
Packaging |
|
75.9 |
% |
|
24.1 |
% |
|
75.0 |
% |
|
25.0 |
% |
|
|||||
|
Construction |
|
82.9 |
% |
|
17.1 |
% |
|
80.4 |
% |
|
19.6 |
% |
|
|||||
|
All Other |
|
74.7 |
% |
|
25.3 |
% |
|
77.3 |
% |
|
22.7 |
% |
|
|||||
|
Corporate |
|
78.5 |
% |
|
21.5 |
% |
|
73.5 |
% |
|
26.5 |
% |
|
|||||
|
Total Sales |
|
67.8 |
% |
|
32.2 |
% |
|
67.2 |
% |
|
32.8 |
% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Note: Certain prior year product reclassifications and the change in designation of certain products as "value-added" resulted in a change in prior year's sales. |
||||||||||||||||||
Our overall unit sales of value-added products were up 4% in the second quarter and down 1% in the first six months of 2026 compared to the prior year. Our overall unit sales of commodity-based products were flat in the second quarter and down 3% in the first six months of 2026 compared to the prior year.
| ● | Developing new products. We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market penetration and meet our internal definition of value-added products. New product sales in the second quarter and first six months of 2026 increased 33% and 26%, respectively. The increase in the second quarter was primarily attributable to sales of Venture and Surestone™ decking products in our Retail segment, mixed-material products for a key national customer in our Packaging segment, and exterior siding and cladding products, light-gauge metal components, and concrete forming products in our Construction segment. Approximately $13.8 million of new product sales for the first six months of 2025, while they continue to be sold, were sunset in 2026 and excluded from the table below because they no longer meet the definition above. Our short-term goal is to achieve annual new product sales of at least $560 million in 2026. For the first six months of 2026, new product sales totaled $272 million. Our long-term goal is for new products to comprise at least 10% of our total net sales. |
The table below presents new product sales in thousands:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
New Product Sales by Segment |
|
|
||||||||||||||||||||||||||
|
|
|
Three Months Ended |
|
|
||||||||||||||||||||||||||
|
|
|
June 27, |
|
% of Segment |
|
June 28, |
|
% of Segment |
|
% Change |
|
|||||||||||||||||||
|
|
|
2026 |
|
Net Sales |
|
2025 |
|
Net Sales |
|
in Sales |
|
|||||||||||||||||||
|
Retail |
|
$ |
80,113 |
|
9.8 |
% |
|
|
67,243 |
|
8.5 |
% |
19.1 |
% |
|
|||||||||||||||
|
Packaging |
|
53,036 |
|
11.6 |
% |
|
|
38,522 |
|
9.0 |
% |
37.7 |
% |
|
||||||||||||||||
|
Construction |
|
|
23,962 |
|
4.5 |
% |
|
|
12,297 |
|
2.2 |
% |
|
94.9 |
% |
|
||||||||||||||
|
All Other |
|
|
315 |
|
0.4 |
% |
|
|
27 |
|
0.0 |
% |
|
1,066.7 |
% |
|
||||||||||||||
|
Corporate |
|
572 |
|
25.5 |
% |
|
|
908 |
|
48.7 |
% |
(37.0) |
% |
|
||||||||||||||||
|
Total New Product Sales |
|
157,998 |
|
8.4 |
% |
|
|
118,997 |
|
6.5 |
% |
32.8 |
% |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Note: Certain prior year product reclassifications and the change in designation of certain products as "new" resulted in a change in prior year's sales. |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
UFP INDUSTRIES, INC.
|
|
|
New Product Sales by Segment |
|
|
|||||||||||||||||||||||
|
|
|
Six Months Ended |
|
|
|||||||||||||||||||||||
|
|
|
June 27, |
|
% of Segment |
|
June 28, |
|
% of Segment |
|
% Change |
|
||||||||||||||||
|
|
|
2026 |
|
Net Sales |
|
2025 |
|
Net Sales |
|
in Sales |
|
||||||||||||||||
|
Retail |
|
$ |
127,521 |
|
9.4 |
% |
|
$ |
111,653 |
|
8.0 |
% |
14.2 |
% |
|
||||||||||||
|
Packaging |
|
101,962 |
|
12.0 |
% |
|
|
78,981 |
|
9.4 |
% |
29.1 |
% |
|
|||||||||||||
|
Construction |
|
|
41,224 |
|
4.2 |
% |
|
|
23,727 |
|
2.2 |
% |
|
73.7 |
% |
|
|||||||||||
|
All Other |
|
|
536 |
|
0.4 |
% |
|
|
220 |
|
0.2 |
% |
|
143.6 |
% |
|
|||||||||||
|
Corporate |
|
1,097 |
|
26.0 |
% |
|
|
1,325 |
|
35.3 |
% |
(17.2) |
% |
|
|||||||||||||
|
Total New Product Sales |
|
272,340 |
|
8.1 |
% |
|
|
215,906 |
|
6.3 |
% |
26.1 |
% |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Note: Certain prior year product reclassifications and the change in designation of certain products as "new" resulted in a change in prior year's sales. |
|||||||||||||||||||||||||||
Retail Segment
Net sales in the second quarter of 2026 increased by 4% compared to the same period of 2025 due to a 3% increase in selling prices and a 2% increase due to acquisitions, partially offset by a 1% decrease in organic unit sales. Organic unit changes within this segment consisted of a 17% decrease in Edge and a 1% decrease in ProWood, partially offset by a 9% increase in Deckorators. Of the 25% year over year increase in net sales for our Deckorators business unit, wood-plastic composite decking and mineral-based-composite decking (sold under our new Surestone tradename) increased 85% and 37%, respectively. An acquired business contributed 13% in sales growth to Deckorators and 51% in sales growth to wood-plastic composite decking sales. These increases were partially offset by railings which declined 17%. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, increased approximately 2%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 2%. The decline in ProWood volume is primarily due to weaker consumer sentiment and economic uncertainty resulting in a softening of demand to complete repair and remodel projects.
Gross profit increased by $1 million, or 1% to $115 million for the second quarter of 2026 compared to the same period of 2025. The change in gross profit was attributable to the following:
| ● | The gross profit of our Edge business unit improved by $3 million as a result of cost savings from the closure of the Bonner, MT facility and restructuring of this business unit which led to operational improvements. |
| ● | The gross profit of our Deckorators business unit increased by $1 million despite higher transportation costs. This business unit continues to make progress optimizing new capacity and we anticipate a higher profit contribution on growth in future quarters. |
| ● | The gross profit of our ProWood pressure-treated products decreased by $3 million, due to higher transportation costs. |
SG&A increased by $4 million, or 7%, in the second quarter of 2026 compared to the same period of 2025. The increase was caused by a $1 million increase due to acquired operations, a $1 million increase in professional fees, and a $2 million increase in expenses across several other categories. Accrued bonus expense, which varies with overall profitability and return on investment of the segment remained flat from the second quarter of 2025 and totaled $15 million for the quarter.
Earnings from operations decreased in the second quarter of 2026 compared to the same period of 2025 by $4 million, or 7%, as a result of the factors mentioned above.
Net sales in the first six months of 2026 decreased by 3% compared to the same period of 2025, due to a 6% decrease in organic units, partially offset by a 2% increase in selling prices and a 1% increase due to acquisitions. Organic unit changes within this segment consisted of decreases of 18% in Edge and 7% in ProWood, partially offset by a 5% increase in Deckorators. Within our Deckorators business unit, our mineral-based-composite decking sales increased by 33% as consumers continue to see the benefits of its superior product attributes, and wood-plastic composite decking increased by 51%. An acquired business contributed an additional 9% in sales growth to Deckorators and 30% in sales growth to wood-plastic composite decking sales. These increases were partially offset by a 13% decrease in railing sales. Unit sales to big box customers decreased approximately 5%, while unit sales to independent retailers decreased approximately 4%.
UFP INDUSTRIES, INC.
Gross profit remained flat for the first six months of 2026 compared to the same period in 2025. The components of gross profit were as follows:
| ● | The gross profit of our ProWood business unit decreased $7 million, primarily due to a decline in unit sales in the first quarter and higher transportation costs in the second quarter. |
| ● | The gross profit of our Edge business unit improved by $4 million as a result of cost savings from the closure of the Bonner, MT facility and restructuring of this business unit which led to operational improvements. |
| ● | The gross profit of our Deckorators business unit increased by $3 million despite higher transportation costs. |
SG&A increased by approximately $5 million, or 4%, in the first six months of 2026 compared to the same period of 2025. The overall increase was due to a $1 million increase due to acquired operations, a $2 million increase in professional fees, and a $3 million increase in expenses across several other categories. These increases were partially offset by a decline in accrued bonus expense of $1 million, which totaled $24 million for the first six months of 2026.
Earnings from operations decreased in the first six months of 2026 compared to the same period of 2025 by $6 million, or 7%, as a result of the factors mentioned above.
Packaging Segment
Net sales in the second quarter of 2026 increased 7% compared to the same period of 2025, due to a 4% increase in organic unit sales and a 4% contribution from business acquisitions. These increases were partially offset by a 1% decrease in selling prices. Organic unit changes consist of a 15% increase in Protective Packaging and an 8% increase in Structural Packaging, partially offset by a 3% decrease in PalletOne. Acquisitions contributed an additional 12% in unit sales growth to PalletOne.
Gross profit decreased by $10 million, or 14%, for the second quarter of 2026 compared to the same period of 2025. The change in gross profit was attributable to the following:
| ● | The gross profit of our PalletOne business unit decreased by $6 million primarily due to increased material and transportation costs. |
| ● | The gross profit of our Structural Packaging business unit decreased by $3 million due to an increase in transportation costs, partially offset by organic unit growth. |
| ● | The gross profit of our Protective Packaging business unit decreased by $1 million compared to the same period of 2025, resulting from unabsorbed manufacturing overhead costs associated with two new greenfield locations. |
SG&A increased by approximately $2 million, or 6%, in the second quarter of 2026 compared to the same period of 2025. The increase is attributable to a one-time write-off on an earnout liability in 2025 for $2 million, a $1 million increase due to acquired operations, and a $1 million increase in expenses across several other categories. The increases were offset by accrued bonus expense, which decreased approximately $2 million relative to the same period of 2025 and totaled $6 million for the quarter.
Earnings from operations decreased in the second quarter of 2026 compared to the same period of 2025 by $12 million, or 44%, due to the factors discussed above.
Net sales in the first six months of 2026 increased 2% compared to the same period of 2025, due to acquired businesses which contributed 3% to unit growth, partially offset by a 1% decrease in selling prices. Organic unit changes consist of a 10% increase in Protective Packaging and a 4% increase in Structural Packaging, offset by a 7% decrease in PalletOne. Acquisitions contributed an additional 7% in unit sales growth to PalletOne.
Gross profit decreased by $19 million, or 14%, for the first six months of 2026 compared to the same period in 2025. The change in gross profit was attributable to the following.
UFP INDUSTRIES, INC.
| ● | The gross profit of our PalletOne business unit decreased by $11 million primarily due to weak demand and increased material and transportation costs. |
| ● | The gross profit of our Structural Packaging business unit decreased by $6 million primarily due to higher transportation costs. |
| ● | The gross profit of our Protective Packaging business unit decreased $2 million compared to the same period of 2025, resulting from unabsorbed manufacturing overhead costs associated with two new greenfield locations. |
SG&A remained flat for first six months of 2026 compared to the same period of 2025. Accrued bonus expense decreased $4 million, and totaled $12 million for the six months of 2026. The decrease was offset by a one-time write off on an earnout liability in 2025 for $2 million, a $1 million increase due to acquired businesses, and a $1 million increase in bad debt expense.
Earnings from operations decreased in the first six months of 2026 compared to the same period 2025 by $18 million, or 38%, due to the factors discussed above, partially offset by a decrease in the net loss on disposition and impairment of assets, which primarily related to a $1 million lease impairment in 2025.
Construction Segment
Net sales in the second quarter of 2026 decreased 4% compared to the same period of 2025 due to a 3% decrease in selling prices due to competitive price pressure in our Site-Built business unit and a 2% decrease in organic unit sales, partially offset by a 1% contribution from acquisitions. We experienced organic unit sales decreases of 6% in Factory Built and 3% in Site-Built due to weaker demand for housing, which was partially offset by an 11% increase in Commercial and a 6% increase in Concrete Forming.
Gross profit decreased by $10 million, or 10%, in the second quarter of 2026 compared to the same period of 2025. The change in our gross profit was attributable to the following:
| ● | The gross profit of our Site-Built housing business unit decreased by $15 million, primarily due to weak demand and competitive pricing as housing starts have declined due to affordability challenges and economic uncertainty. |
| ● | The gross profit of our Factory-Built business unit decreased by $2 million primarily due to lost market share of certain low margin commodity products. |
| ● | The gross profit of our Commercial construction business unit increased by $6 million due to an increase in unit sales and productivity improvements. |
| ● | The gross profit of our Concrete-Forming business unit increased by $1 million due to an increase in unit sales. |
SG&A remained flat in the second quarter of 2026 compared to the same period of 2025. Accrued bonus expense decreased by $2 million and totaled $9 million for the quarter. The decrease in accrued bonus expense was offset by increases of $1 million in wages and benefits and $1 million in travel expenses.
Earnings from operations decreased in the second quarter of 2026 compared to the same period of 2025 by $10 million, or 27%, due to the factors mentioned above.
Net sales in the first six months of 2026 decreased 7% compared to the same period of 2025 and consisted of a 4% decrease in selling prices and a 4% decrease in unit organic sales, partially offset by a 1% contribution from acquisitions. Organic unit changes within this segment consist of decreases of 7% in Factory Built and 8% in Site Built, partially offset by increases of 13% in Commercial and 10% in Concrete Forming.
Gross profit decreased by $23 million, or 12%, for the first six months of 2026 compared to the same period of 2025. The change in our gross profit was attributable to the following:
UFP INDUSTRIES, INC.
| ● | The gross profit of our Site-Built housing business unit decreased by $34 million, primarily due to weak demand and competitive pricing as housing starts have declined primarily due to affordability challenges and economic uncertainty. |
| ● | The gross profit of our Commercial construction business unit increased by $10 million due higher volumes and productivity improvements. |
| ● | The gross profit of our Concrete-Forming business unit increased by $1 million due to an increase in unit sales. |
| ● | The gross profit of our Factory-Built business unit remained flat. |
SG&A decreased by approximately $1 million, or 1%, in the first six months of 2026 compared to the same period of 2025. Accrued bonus expenses decreased $5 million and totaled $15 million for the first six months of 2026. The decrease in SG&A was partially offset by increases in wages and benefits totaling $2 million, professional fees totaling $1 million and travel expenses totaling $1 million.
Earnings from operations decreased in the first six months of 2026 compared to the same period of 2025 by $22 million, or 35%, due to the factors mentioned above.
All Other Segment
Our All Other reportable segment consists of our International and Ardellis (our insurance captive) segments that are not significant.
Corporate
The corporate segment consists of over (under) allocated costs that are not significant and net sales to external customers initiated by UFP Purchasing, UFP Transportation, and UFP Real Estate. In 2026 we modified our cost allocation methods to more closely approximate actual.
INCOME TAXES
Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 26.3% in the second quarter of 2026 compared to 23.6% in the same period of 2025 and was 25.3% in the first six months of 2026 compared to 22.5% for the same period in 2025. The increase in our effective tax rate for the second quarter and for the first six months of 2026 was primarily due to $3 million of state income tax benefits recorded as discrete items in the second quarter of 2025 resulting from an approved reduction in our tax rate in Texas and job credits in South Carolina, and a decrease in our tax deduction from stock-based compensation accounted for as a permanent difference.
OFF-BALANCE SHEET TRANSACTIONS
We have no significant off-balance sheet transactions.
UFP INDUSTRIES, INC.
LIQUIDITY AND CAPITAL RESOURCES
The table below presents, for the periods indicated, a summary of our cash flow statement (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
||||
|
|
|
June 27, |
|
June 28, |
||
|
|
|
2026 |
|
2025 |
||
|
Cash from operating activities |
|
$ |
60,645 |
|
$ |
113,138 |
|
Cash used in investing activities |
|
(204,035) |
|
(149,579) |
||
|
Cash used in financing activities |
|
(183,233) |
|
(302,338) |
||
|
Effect of exchange rate changes on cash |
|
419 |
|
2,176 |
||
|
Net change in all cash and cash equivalents |
|
(326,204) |
|
(336,603) |
||
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
925,071 |
|
1,179,594 |
||
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
598,867 |
|
$ |
842,991 |
In general, we fund our growth through a combination of operating cash flows, our revolving credit facility, and issuance of long-term notes payable at times when interest rates are favorable. We have not issued equity to finance growth except in the case of a large acquisition that occurred many years ago. We manage our capital structure by attempting to maintain a targeted ratio of debt to equity and debt to earnings before interest, taxes, depreciation and amortization. We believe this is one of many important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.
Seasonality has a significant impact on our working capital due to our primary selling season which occurs during the period from March to September. Consequently, our working capital typically increases during our first and second quarters resulting in negative or modest cash flows from operations during those periods. Conversely, we tend to experience a substantial decrease in working capital once we move beyond our peak selling season which typically results in significant cash flows from operations in our third and fourth quarters.
Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle remained at 59 days during the second quarter of 2026 and increased to 63 days from 60 days during the first six months of 2026 compared to the same periods of the prior year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
|
June 27, |
|
June 28, |
|
June 27, |
|
June 28, |
|
||||
|
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
|
Days of sales outstanding |
|
|
35 |
|
|
35 |
|
|
35 |
|
|
35 |
|
|
Days supply of inventory |
|
36 |
|
36 |
|
41 |
|
38 |
|
||||
|
Days of payables outstanding |
|
(12) |
|
(12) |
|
(13) |
|
(13) |
|
||||
|
Days in cash cycle |
|
59 |
|
59 |
|
63 |
|
60 |
|
||||
The increase in our days supply of inventory for the first six months of 2026 is due to slower inventory turns in our Retail segment as a result of an increase in safety stock and weaker than anticipated demand in the first quarter. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 94% at the end of the second quarter of 2026 and 2025.
In the first six months of 2026, our cash flows from operations were $61 million which consisted of net earnings of $134 million and $95 million of non-cash expenses, partially offset by a $169 million increase in working capital since the end of December 2025 due to seasonal demand. Our cash flows from operations decreased by $52 million compared to the same period of 2025 primarily due to the decline in our net earnings as well as the increase in our investment in net working capital since year end, which was $2 million higher in the first six months of 2026 compared to the first six months of 2025. We anticipate the seasonal increase in net working capital in 2026 will be converted to cash by early in the fourth quarter.
UFP INDUSTRIES, INC.
Purchases of property, plant, and equipment comprised $87 million of our cash used in investing activities during the first six months of 2026. Outstanding purchase commitments on existing capital projects totaled approximately $108 million on June 27, 2026. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and Deckorators business units, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year. Cash used for acquisitions during the first six months of 2026 totaled $122 million (refer to Note F to our unaudited interim condensed consolidated financial statements).
Cash flows used in financing activities during the first six months of 2026 primarily consisted of the following:
| ● | We repurchased 1,669,770 shares of our common stock for $142 million during the first six months of 2026 at an average price of $84.95 per share. Of this amount, 14,187 shares were repurchased in order to settle tax withholding obligations of long-term stock incentive plan participants' awards which vested in the current year. The shares were purchased at an average price of $98.07 per share, totaling $1.4 million. |
| ● | Dividends paid during the first six months of 2026 were $40 million. The quarterly dividend of $0.36 per share represents a 3% increase from the quarterly dividend of $0.35 per share paid in 2025. |
On June 27, 2026, we had no amount outstanding on our $750 million revolving credit facility, and we had approximately $708 million in remaining availability after considering $42 million in outstanding letters of credit under the revolving credit facility. Financial covenants on the unsecured revolving credit facility and unsecured notes include minimum interest tests and a maximum leverage ratio. The agreements also restrict the amount of additional indebtedness we may incur and the amount of assets that may be sold. We were in compliance with all of our covenant requirements as of June 27, 2026.
At the end of the second quarter of 2026, we had approximately $1.9 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.
ENVIRONMENTAL CONSIDERATIONS AND REGULATIONS
See Notes to Unaudited Interim Condensed Consolidated Financial Statements, Note E, "Commitments, Contingencies, and Guarantees."
CRITICAL ACCOUNTING POLICIES
In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations. We continually review our accounting policies and financial information disclosures. There have been no material changes in our policies or estimates since December 27, 2025.
FORWARD OUTLOOK
Our long-term financial goals include:
| ● | Growing our annual unit sales by 7 to 10 percent (including smaller tuck-in acquisitions) with at least 10 percent of all sales coming from new products; |
| ● | Achieving and sustaining a 12.5 percent adjusted EBITDA margin by continuing to enhance our capabilities and grow our portfolio and sales of value-added products, expanding geographically in our higher margin business units, and achieving operating improvements; |
| ● | Earning an incremental return on new investment over our hurdle rate of 15 percent; and |
| ● | Maintaining a conservative capital structure. |
UFP INDUSTRIES, INC.
We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of macro-economic and geopolitical factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans to reduce or eliminate capacity at locations that are not meeting our profitability targets and reduce our SG&A costs. At the beginning of 2025, we announced that our goal through these actions was to improve our operating profits by $60 million by the end of 2026. We are on track to deliver the remaining $25 million or more from this cost out program by year end, with most to be realized in the third and fourth quarters. Additionally, we anticipate:
| ● | Core SG&A will be approximately $580 million for the year. In addition, we anticipate sales incentives will be 3% of gross profit (3% of gross profit in 2025), bonus expense will range from 17% to 18% of pre-bonus operating profits (17% of pre-bonus operating profits in 2025), and vesting expense associated with incentive shares granted in prior years will total $24 million ($28 million in 2025). |
| ● | Depreciation, amortization and other non-cash expenses will be approximately $211 million for the year. |
| ● | An annual effective tax rate between 25% and 26%. |
The following factors should be considered when evaluating our future sales and gross profit:
| ● | We anticipate lumber prices will remain near current levels, and experience typical seasonal trends, until there is a substantial change in the balance of supply and demand. Transportation constraints may also cause prices to remain elevated, mitigating a typical decline in prices as the peak selling season comes to an end. In the event new tariffs are enacted on imports, we anticipate lumber prices will increase accordingly. We believe we are currently in a strong position to adapt quickly to new tariffs without adverse financial impact after a short adjustment period. Approximately 84% of our purchases of lumber are from domestic sources. |
| ● | A combination of macroeconomic and geopolitical events and capacity constraints in the flatbed carrier market have resulted in an increase in certain of our input and transportation costs. We anticipate that these costs will remain elevated for the foreseeable future. While our intention and operating practices are to pass these costs on to customers in our pricing, there are a variety of factors beyond our control that may impact our ability to be successful in these efforts. |
| ● | Retail sales accounted for 40% of our net sales for the first six months of 2026. When evaluating future demand for the segment, we analyze data such as the same-store sales growth of national home improvement retailers and forecasts of home remodeling activity. Based on this data, we currently anticipate market demand to be down low single digits for the remainder of 2026. We anticipate market growth and share gains in our composite decking and railing products will contribute approximately $100 million of sales growth in our Deckorators business unit in 2026, however our current backlog of ordered but unshipped Surestone™ decking is approximately $30 million as we continue to make progress optimizing capacity. We anticipate recent investments in equipment to improve the manufacturing throughput and lower the cost of our Surestone™ decking products will result in margin improvements in those products in 2026 as the new capacity is effectively brought on-line and once the higher cost inventory is sold. |
| ● | Packaging sales accounted for 25% of our net sales for the first six months of 2026. When evaluating future demand, we consider a number of metrics, including the Purchasing Managers Index (PMI), durable goods manufacturing, and U.S. real GDP. We currently believe overall demand in the markets we serve to be down low single digits for the remainder of 2026, primarily due to softening demand in our PalletOne business unit. We anticipate share gains in each of our business units will help mitigate weaker demand. |
UFP INDUSTRIES, INC.
| ● | Construction sales accounted for 30% of our net sales for the first six months of 2026. |
| - | The Site-Built business unit accounted for approximately 10% of our net sales for the first six months of 2026. Approximately one-third of site-built customers are multifamily builders. The industry consensus estimate of national housing starts for 2026 is 1.35 million, with estimates generally predicting flat to mid-single digit growth in the coming year with multi-family showing slightly weaker performance compared to single-family. We anticipate demand in the regions we operate to be down low to mid-single digits for the remainder of 2026. Despite the softer near-term demand outlook, our backlog has increased as a result of several newly awarded projects for which contracts are in place, with projected margins generally consistent with those of other recent projects. As of June 27, 2026 and June 28, 2025, we estimate that our backlog of orders in our Site-Built housing business unit were $117 million and $59 million, respectively. The increase was primarily related to multi-family projects in the Northeast. |
| - | The Factory-Built housing business unit accounted for 12% of our net sales for the first six months of 2026. When evaluating future demand, we analyze data from production and shipments of manufactured housing. Year to date industry production is down 8%. We currently believe overall demand will be down low to mid-single digits for the remainder of 2026. |
| - | The Commercial construction and Concrete Forming business units accounted for approximately 8% of our net sales for the first six months of 2026. When evaluating future demand, we analyze data from non-residential construction spending. We anticipate modest growth in overall demand of these business units for the remainder of 2026. |
Capital Allocation:
We believe the strength of our cash flow generation and conservative capital structure provide us with sufficient resources to grow our business and also fund returns to our shareholders. We plan to continue to pursue a balanced and return-driven approach to capital allocation across dividends, share buybacks, capital investments and acquisitions.
| ● | On July 22, 2026, our board approved a quarterly cash dividend of $0.36 per share, which represents a 3% increase from the 2025 dividend rate. This dividend is payable on September 15, 2026, to shareholders of record on September 1, 2026. We continue to consider our payout ratio and yield when determining the appropriate dividend rate and have a long-term objective of increasing our dividend in line with our earnings growth. |
| ● | On May 29, 2026, our board authorized the repurchase of up to $300 million worth of our shares through April 30, 2027. This share authorization supersedes and replaces our prior share repurchase authorizations. Our objective is to repurchase our stock at sufficient amounts to offset issuances under our share-based compensation plans. In addition, we will allocate more of our free cash flow to opportunistically buy shares when the price trades at pre-determined levels we believe are at a significant discount to intrinsic value. Through August 4, 2026, we have approximately $273 million of remaining availability under this authorization. |
| ● | Our targeted range for capital expenditures for 2026 is $175 to $200 million and will continue to be impacted by extended lead times required for most equipment and rolling stock as well as the time required for site selection in the case of investments in new locations. Priority continues to be given to projects that enhance the working environments of our plants, take advantage of automation opportunities, and drive strategies that have strong long-term growth potential for new and value-added products. Certain planned capital projects have been canceled as we evaluated acquisition opportunities as an alternative means of adding capacity rather than investing in greenfield operations. |
| ● | We continue to pursue a healthy pipeline of acquisition opportunities of companies that are a strong strategic fit and enhance our capabilities while providing higher margin, return, and growth potential. |
UFP Industries Inc. published this content on August 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 05, 2026 at 15:44 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]