Sign in

You're signed outSign in or to get full access.

BH

BlueLinx Holdings Inc. (BXC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue declined 2% year over year to $709.226M with gross profit of $111.129M and gross margin of 15.7%; GAAP diluted EPS was $0.33 and adjusted diluted EPS was $0.27 .
  • Versus S&P Global consensus, BXC slightly missed revenue ($709.226M vs $713.879M*) and slightly beat EPS ($0.27 vs $0.265*); adjusted EBITDA was roughly in line with S&P’s EBITDA consensus ($19.6M reported vs $19.9M*) .
  • Early Q2 quarter-to-date indicators: specialty margins 17–18%, structural margins 9–10%, with average daily sales volumes improved vs both Q1 2025 and Q2 2024, positioning the stock for volume-driven recovery headlines if sustained .
  • Management emphasized resilient specialty and structural margins despite price deflation/volume headwinds, reiterated strong liquidity ($795M) and continued buybacks ($15M in Q1; $31M remaining authorization) as capital return catalysts .

Note: Asterisked estimate figures are Values retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Maintained solid specialty (18.7%) and structural (9.3%) gross margins despite price deflation and weather-driven volume pressure; CEO: “continued ability to drive profitable sales… despite challenging weather and market conditions” .
    • Volume gains in engineered wood products (EWP), lumber and panels; structural revenue rose 3% YoY on higher lumber prices and volumes; management believes it is gaining share in multifamily and EWP .
    • Strong balance sheet/liquidity ($449M cash; $795M liquidity) and active capital returns ($15M repurchases in Q1; $31M remaining), preserving flexibility into recovery .

  • What Went Wrong

    • Gross margin contracted 190 bps YoY to 15.7%; specialty margins fell 200 bps YoY (20.7% → 18.7%), partly due to smaller duty-related benefits ($6.5M in 1Q24 vs $2.4M in 1Q25) and deflation/volume pressure .
    • SG&A increased $2.8M YoY to $94.1M on digital transformation and higher logistics, pressuring operating leverage in a softer demand environment .
    • Seasonally weak cash flow: operating cash flow -$33.9M and free cash flow -$39.8M in Q1; inventories and receivables used cash as weather slowed activity early in the quarter .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$747.288 $710.637 $709.226
Gross Profit ($USD Millions)$125.669 $113.345 $111.129
Gross Margin %16.8% 15.9% 15.7%
Diluted EPS ($)$1.87 $0.62 $0.33
Adjusted Diluted EPS ($)$1.95 $0.61 $0.27
Adjusted EBITDA ($USD Millions)$36.645 $21.535 $19.558
Adjusted EBITDA Margin %4.9% 3.0% 2.8%

Segment performance and mix

Segment KPIQ3 2024Q4 2024Q1 2025
Specialty Net Sales ($USD Millions)$519.000 $483.610 $479.387
Specialty Gross Margin %19.4% 18.4% 18.7%
Structural Net Sales ($USD Millions)$228.288 $227.027 $229.839
Structural Gross Margin %11.0% 10.8% 9.3%

Key balance sheet and cash flow KPIs

KPIQ3 2024Q4 2024Q1 2025
Cash & Cash Equivalents ($USD Millions)$526.281 $505.622 $449.020
Available Liquidity ($USD Millions)$873 $852 $795
Net Debt ex. Real Property Finance Leases ($USD Millions)$(175.529) $(155.837) $(74.655)
Net Leverage Ratio ex. Real Property Leases (x)(1.2x) (1.2x) (0.7x)
Free Cash Flow ($USD Millions, quarterly)$53.837 $(1.535) $(39.840)
Capex/Disbursements for PPE ($USD Millions)$7.929 $20.279 $5.932

Results vs. S&P Global consensus (Q1 2025)

MetricConsensus*ActualBeat/Miss
Revenue ($USD Millions)$713.879*$709.226 Miss
EPS (Primary/Adjusted) ($)$0.265*$0.27 Beat
EBITDA ($USD Millions)$19.906*$19.558 (Adj. EBITDA) In line/slight miss

Note: Asterisked estimate figures are Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Specialty product gross marginQ2 2025 (first 4 weeks)N/A17%–18% New update
Structural product gross marginQ2 2025 (first 4 weeks)N/A9%–10% New update
Average daily sales volumesQ2 2025 (first 4 weeks)N/AImproved vs Q1 2025 and Q2 2024 New update
Tax rateQ2 2025N/A29%–33% New update
Digital transformation opexFY 2025N/A~$5M opex impact in 2025 New update
Q1 specialty margin early-quarter outlook vs actualQ1 202518%–19% (first 7 weeks) Actual 18.7% for full quarter In line with outlook range

BXC does not provide formal revenue/EPS guidance; updates are directional/operational.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Digital transformationContinued investment; SG&A elevated partly due to tech spend Phase 1 on track for completion by Q3 2025; opex impact ~$5M in 2025 Execution progressing; near-term cost, longer-term leverage
Macro/housing demandChallenging market; deflation pressure; solid margins Weather and macro softened volumes; builder sentiment down; multifamily improving YoY Mixed: near-term soft, multi-family support
TariffsRisk disclosed in filings/outlooks Expect pass-through to pricing, but pressure on percentage margins; low-teens COGS impact if implemented Margin headwind watch
Product mix focusSpecialty margin within expected range; volume growth in key categories EWP and multifamily volumes up; share gains targeted Mix shift toward specialty/multifamily
Inventory/supply chain2Q24 write-down benefited Q3 structural margins Strategic inventory management; early Q2 volumes up as weather abates Normalizing through Q2
Capital allocationActive buybacks; strong liquidity $15M repurchased in Q1; $31M remaining; leverage target ≤2x ex real estate leases Consistent; flexibility maintained
Geographic expansionPortland greenfield opened (Nov-2024 press) [17]Portland performing better than expected; expanding product set Early success; template for more

Management Commentary

  • CEO Shyam Reddy: “Our first quarter results were highlighted by gross margins of over 18% for specialty products and just over 9% for structural products, despite the impact of continued price deflation… and lower volumes… due to weather and macroeconomic forces.”
  • On strategy and market share: “We partially offset this deflation by driving volume growth in engineered wood products, lumber and panels… gaining market share… in the strategically important [EWP] category… and multifamily.”
  • On tariffs: “We absolutely plan to pass along the impact of tariffs… The question will be, will the market be able to… maintain historical margins?... we would generate the same gross profit dollars… but the margin would come down to some degree depending on the magnitude of the tariff.”
  • Liquidity and capital returns: “Available liquidity was $795 million… and we once again returned capital to shareholders by repurchasing $15 million… with $31 million remaining.”

Q&A Highlights

  • Specialty margins and tariffs: Management expects to pass tariff costs through pricing but cautioned percentage margins may compress given competitive dynamics; current competitive pricing pressure reflects unconstrained supply and softer demand in some specialty categories .
  • Pricing adjustments and COGS: No major pricing strategy changes; any implemented tariffs would flow through COGS with pass-through; estimated single-digit COGS impact if announced tariffs proceed .
  • Inventory/seasonality: Inventory build tied to prolonged adverse weather; Q2 daily volume up materially as activity normalizes; disciplined cadence on turns and targets remains in place .
  • Greenfield/multifamily: Portland greenfield performing better than expected; dedicated multifamily focus driving share gains; margin dynamics still subject to local competition .
  • Leverage and capital allocation: Long-term net leverage target ≤2x (ex real property leases) with active review of capex/M&A/buybacks based on conditions .
  • Sourcing and tariff exposure: <20% lumber sourced from Canada; confident in real-time pass-through on Canadian lumber and web stock used in EWP if tariffs implemented .

Estimates Context

  • Q1 2025: Revenue modest miss ($709.226M vs $713.879M*), EPS slight beat ($0.27 vs $0.265*), EBITDA roughly in line/slight miss ($19.6M vs $19.9M*) . Given stable Q2-to-date margins and improved daily volumes, Street models may tilt toward higher volumes but watch for margin rate compression risk from tariffs/competition, particularly in specialty .
  • Near-term revisions: Expect fine-tuning rather than wholesale changes—mix tailwinds (EWP/multifamily) offset by pricing/margin pressures and elevated SG&A from digital investments .

Note: Asterisked estimate figures are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Resilient profitability in a soft backdrop; margins held better than feared, aided by disciplined pricing and inventory management, but remain below prior-year levels .
  • Mixed print vs consensus (small EPS beat, small revenue miss*); early Q2 run-rate (margins and volumes up) is the near-term catalyst to watch .
  • Specialty deflation easing sequentially (Q3→Q4→Q1), but competitive pressures and potential tariffs could cap margin rate expansion even if dollars are passed through .
  • Structural benefited from higher lumber prices/volumes; panel price declines continue; early Q2 structural margins slightly better on lumber strength .
  • Balance sheet strength (net cash ex. real estate leases, large liquidity) underpins optionality for buybacks, greenfields, and M&A; $31M buyback capacity remains .
  • Execution on digital transformation remains a 2H 2025 efficiency lever (Phase 1 by Q3), but carries ~$5M opex in 2025; monitor SG&A leverage as volumes recover .
  • Watch regional dynamics (West/Texas weakness) and multifamily ramp; sustained EWP share gains would be a positive mix driver into 2H .

Asterisked estimate figures are Values retrieved from S&P Global.