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    UFP INDUSTRIES (UFPI)

    UFPI Q2 2024: Deckorators Tech Fuels Volume Growth Amid Retail Slump

    Reported on Jul 29, 2025 (Before Market Open)
    Pre-Earnings Price$127.06Last close (Jul 29, 2024)
    Post-Earnings Price$127.05Open (Jul 30, 2024)
    Price Change
    $-0.01(-0.01%)
    • Strong Differentiation through Proprietary Products: The executives highlighted that the Deckorators brand, powered by their patented Surestone technology, offers a unique, non-price competitive advantage. They believe this innovation will drive volume growth and margin expansion even in a challenging retail environment.
    • Strategic Geographic Expansion: Management is actively targeting growth in underpenetrated regions, focusing on areas benefiting from favorable demographic trends. This approach in the construction segment could increase market share and support improved sales and margins.
    • Focused Operational and Margin Enhancements: The discussion pointed to efforts in tightening SG&A expenses and ensuring new products meet higher margin targets. These initiatives, coupled with cost rationalization and operational efficiencies, bolster the case for future profitability.
    • Persistent Retail Weakness: Despite the expansion in the Deckorators segment, management emphasized that retail overall continues to see negative sales trends and subdued demand, suggesting that isolated strength in one area may not offset broader retail challenges.
    • Margin Pressure in Packaging: Discussions highlighted soft demand, competitive pricing pressures, and unfavorable cost variances in the packaging segment, which could continue to squeeze margins and impact profitability.
    • Economic and Input Cost Headwinds: Analysts questioned the slower pace of adjustments in the lumber market and potential delays in curtailing operations at older, less efficient facilities, exposing the company to extended pressures on earnings in a challenging economic environment.
    1. Investment Timeline
      Q: Investment timeline and expected returns?
      A: Management anticipates deploying about $1 billion over the next 24 months as part of a broader 5-year growth plan focused on organic growth and M&A opportunities.

    2. Packaging Margins
      Q: How will packaging margins recover?
      A: They expect to improve EBITDA margins by consolidating capacity and driving efficiency amid current market challenges.

    3. Cost Efficiency
      Q: What’s the SG&A cost reduction target?
      A: Management is targeting roughly $20 million in savings to return SG&A costs to pre-pandemic levels.

    4. Deckorators Positioning
      Q: Retail positioning for Deckorators next year?
      A: Despite softer retail trends, Deckorators’ unique, patented technology is expected to drive volume growth and shift customer composition favorably.

    5. Market Share Gains
      Q: What are key market share strategies?
      A: The focus is on expanding share in construction and packaging by introducing new products and streamlining operations.

    6. Competitive Pricing Adjustments
      Q: Are pricing pressures affecting retail and construction?
      A: Management noted that pricing adjustments, primarily influenced by lumber market trends, occur periodically and remain manageable.

    7. New Products Margins
      Q: How do new products perform margin-wise?
      A: New products are being developed to meet elevated margin targets and enhance overall profitability.

    8. Construction Expansion
      Q: Which regions are targeted for expansion?
      A: The strategy focuses on non-urban markets in the Northeast, Southeast, Mid-Atlantic, as well as Texas and Colorado to capture favorable demographic trends.

    9. Lumber Curtailments
      Q: When will older facilities face curtailments?
      A: Curtailments are expected to be gradual, primarily affecting older, less efficient plants if demand does not improve.

    10. Single vs Multifamily Dynamics
      Q: What drives single and multifamily pricing pressures?
      A: Pricing pressures stem from capacity dynamics: the stable single-family market contrasts with multifamily declines that free up capacity.

    Research analysts covering UFP INDUSTRIES.