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UFP INDUSTRIES INC (UFPI)·Q3 2025 Earnings Summary

Executive Summary

  • UFPI reported Q3 2025 revenue of $1.56B and diluted EPS of $1.29; both declined year over year as demand and pricing remained soft, especially in Site Built .
  • Results missed S&P Global consensus: revenue $1.56B vs $1.61B* and EPS $1.29 vs $1.385*; this marks a third straight quarter of misses as macro headwinds persisted (see Estimates Context).
  • Adjusted EBITDA was $140.0M (9.0% margin), down from $164.9M (10.0%) in Q3 2024; margins remain ~200 bps above 2019 per management, reflecting structural improvements .
  • Management reaffirmed a cautious 2025 outlook (low single‑digit unit declines) and trimmed 2025 capex to $275–$300M (from $300–$325M in Q2), while raising the dividend to $0.35 and repurchasing ~$350M of shares YTD through October .
  • Near‑term stock catalysts: Q4 pricing pressure trajectory in Site Built; execution on cost‑out ($60M by 2026); 2026 ramp of Deckorators/SureStone; and signals of stabilization in Packaging and non‑residential Construction .

What Went Well and What Went Wrong

What Went Well

  • Deckorators growth: +5% organic units; SureStone decking +31% and WPC decking +9% YoY within retail, with capacity expansions to support 2026 shelf rollout at ~1,500 stores .
  • Protective Packaging strength: +15% units with segment adjusted EBITDA flat YoY despite price competition elsewhere; sequential stabilization supports cautious optimism for 2026 .
  • Liquidity/capital returns: $2.3B total liquidity with >$1B cash; ~$350M (~6–6.5% market cap) repurchases through October; dividend up 6% YoY to $0.35 .

What Went Wrong

  • Site Built drag: ~75% of the consolidated gross profit decline was tied to lower volume/pricing in Site Built; management expects pressure to extend into Q4 .
  • Retail margin pressure: falling lumber prices, start‑up costs for SureStone, Edge restructuring inefficiencies, and higher marketing spend compressed Retail gross profit (-14%) and adj. EBITDA (-22%) YoY .
  • Consolidated profitability lower YoY: Gross margin 16.8% (vs 18.1%), adj. EBITDA margin 9.0% (vs 10.0%), reflecting competitive pricing and demand softness across end markets .

Financial Results

Consolidated actuals (chronological, YoY and QoQ context)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Billions)$1.649 $1.835 $1.560
Diluted EPS ($)$1.64 $1.70 $1.29
Gross Margin (%)18.1% 17.0% 16.8%
Adjusted EBITDA ($USD Millions)$164.9 $174.1 $140.0
Adjusted EBITDA Margin (%)10.0% 9.5% 9.0%
Net Earnings ($USD Millions)$101.6 $100.9 $75.5

Q3 2025 vs S&P Global consensus

MetricConsensusActualBeat/Miss
Revenue ($USD Billions)$1.610*$1.560 Miss
Diluted EPS ($)$1.385*$1.29 Miss

Values marked with * retrieved from S&P Global.

Segment performance (Q3 2025 vs Q3 2024)

SegmentNet Sales Q3’24 ($MM)Net Sales Q3’25 ($MM)Adj. EBITDA Q3’24 ($MM)Adj. EBITDA Q3’25 ($MM)Notes
Retail$635.6 $594.0 $51.2 $40.0 Deckorators +5% units; ProWood -5%; margin hit from lumber prices, SureStone start‑up, Edge inefficiencies, higher marketing .
Packaging$401.6 $394.9 $34.3 $34.3 Protective Packaging +15% units; PalletOne price competition; EBITDA flat on SG&A cuts .
Construction$534.6 $496.5 $50.9 $41.9 Site Built -15% units; Factory Built +4%; Concrete Forming +12%; Commercial +13% .

KPIs and other financial items

KPIQ3 2025
New product sales (% of total)7.6%
Organic unit sales (consolidated)-4% (Q3 YoY)
Liquidity~$2.3B; cash ~$1.0B
Cash from operations (YTD)$399.1M
Share repurchases2.8M shares YTD for $291M; +615k in Oct for $56M
Dividend$0.35 approved Oct 23, payable Dec 15

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Volume outlook (units)FY2025Low single‑digit declines across segments Reaffirmed low single‑digit declines across segments Maintained
CapexFY2025$300–$325M $275–$300M Lowered
SG&A (ex highly variable)Q4 2025—~$137M target; ~$553M for 2025 New detail
Cost‑out programThrough 2026~$60M by YE 2026 ~$60M by YE 2026 Maintained
DividendQuarterly$0.35 (Q2 board approval) $0.35 (approved Oct 23) Maintained
Share repurchase authorizationThrough Jul 2026$300M (authorized Jul 23, 2025) $300M (active; $347M bought in 2025 through Oct) Maintained/active

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Deckorators/SureStone expansionQ1: Deckorators volume temporarily down; SureStone growth focus; invest $300–$350M capex 2025; mix shift planned . Q2: SureStone +45% QoQ context, retail shelf loss in railing offset by new major retailer; targeting ~1,500 stores by 2026 .SureStone +31%; WPC +9%; on‑shelf for 2026; both Selma and Buffalo lines fully operational in Q1’26; $30M brand investment; internal ProWood distribution seen as margin driver .Improving; execution focus into 2026
Site Built housingQ1: Pricing competition pressured margins; demand soft . Q2: Site Built volume -7%; pricing pressure; large share of segment GP decline .Site Built units -15%; 75% of consolidated GP decline tied to Site Built; pressure likely extends into Q4 .Worsened near‑term
PackagingQ1: Structural/Pallet pricing and demand pressured margins; Protective +13% . Q2: Protective +8%, Pallet +5%; pricing competitive; GP down; work on SG&A .Protective +15% units; EBITDA flat YoY on SG&A cuts; sequential stabilization .Stabilizing
Automation/CapexQ1: Up to $1B through 2028; 2025 $300–$350M . Q2: $300–$325M; $200M earmarked for automation .2025 capex trimmed to $275–$300M; automation remains a priority to drive cost‑out .Capital discipline; same priorities
Tariffs/macroQ1: Tariff commentary; expect to adapt with minimal long‑term impact . Q2: Tariffs could tighten domestic capacity; company positioned with domestic mix .Lumber tariffs a watch item; majority domestic sourcing; ready to pivot; pricing at low points currently .Ongoing watch
Non‑residential (Concrete Forming)Q1: Concrete Forming up 3% units . Q2: Concrete Forming +11% units .Concrete Forming +12% units; potential benefit from data center builds in 2026 .Positive momentum

Management Commentary

  • “Our third quarter played out largely as anticipated… Visibility remains limited… trends across the majority of our business units have shown signs of stabilizing… adjusted EBITDA margin approximately 200 basis points higher than 2019 levels” .
  • “75% of the decline in our consolidated gross profit was due to lower volume and pricing in our site‑built business… trailing twelve‑month ROIC stands at 14.5%… repurchasing nearly 6% of our total outstanding shares through October” .
  • “We remain on track to be fully stocked for the 2026 selling season… both expansion efforts [Selma and Buffalo] are progressing well and will be fully operational in Q1 2026” .
  • “Based on the actions we've taken… confident in our ability to meet or exceed our goal of $60 million in cost out by the end of 2026” .

Q&A Highlights

  • SureStone rollout and margins: On‑shelf for 2026; capacity expansions kick in late Q4/Q1; 2026 expected to see the most meaningful sales and contribution margin uplift as new lines run optimally and high‑cost inventory works down .
  • Site Built pricing: Additional sequential pricing pressure from Q2→Q3; costs coming down but pricing declined more than materials; headwinds likely into Q4 .
  • Capital allocation: Strong cash generation; bias to buybacks near‑term while preserving capacity for disciplined M&A aligned to core segments .
  • Tariffs and lumber: Majority domestic purchases; prepared to adjust sourcing; expect market pricing to reflect any tariff changes; balanced model mitigates risk .
  • Packaging outlook: Stabilization observed; focus on national accounts, near‑shoring opportunities, and patented U‑Loc 200 innovation to drive share as demand recovers .

Estimates Context

  • Q3 2025: EPS $1.29 vs $1.385* (miss); Revenue $1.560B vs $1.610B* (miss).
  • Q2 2025: EPS $1.70 vs $1.844* (miss); Revenue $1.835B vs $1.854B* (miss).
  • Q1 2025: EPS $1.30 vs $1.565* (miss); Revenue $1.596B vs $1.601B* (slight miss).
  • Implications: Street models likely need lower Site Built volume/price assumptions, reduced consolidated gross margin trajectory near‑term, and a push‑out of Retail margin expansion into 2026 tied to SureStone capacity/throughput ramp and Edge restructuring benefits .
    Values marked with * retrieved from S&P Global.

S&P Global consensus trend detail

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($MM)1,601.0*1,854.1*1,610.3*
Revenue Actual ($MM)1,595.5 1,835.4 1,559.6
Primary EPS Consensus Mean ($)1.565*1.844*1.385*
Diluted EPS Actual ($)1.30 1.70 1.29

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near‑term pressure persists in Site Built; model lower Q4 pricing and volumes with gradual normalization into 2026; management sees stabilization in other units and structural margin improvements vs 2019 .
  • Retail margin recovery hinges on SureStone capacity ramp and Edge closures; expect more visible mix and margin benefits starting 1H26; 2026 should see the most meaningful contribution margin uplift .
  • Packaging is bottoming: protective packaging strong and U‑Loc 200 innovation can drive share; modest recovery should leverage SG&A reductions to support EBITDA stability .
  • Capital allocation is supportive: ~$350M 2025 buybacks through Oct and dividend up 6%; capex trimmed without sacrificing automation priorities; ample liquidity ($2.3B) positions UFPI for opportunistic M&A .
  • Watch catalysts: Q4 pricing trajectory in Site Built; execution on $60M cost‑out by 2026; SureStone production milestones; additional retail placements/stocking orders; and non‑residential demand (e.g., data centers) driving Concrete Forming .
  • Valuation sensitivity: Continued estimate revisions likely skew lower near‑term (three straight quarterly misses), but medium‑term margin expansion case rests on mix (value‑added products), automation, and cost‑outs (12.5% EBITDA margin LT target) .

Additional Relevant Press Releases (Q3 timeframe)

  • ProWood launched TrueFrame Joist, a precision, factory‑planed, treated joist system (“KDAT”) targeting pro builders; rollout supports brand and margin narrative in Retail ahead of 2026 season .
  • UFP Packaging introduced the U‑Loc 200 tool‑free, reusable crate system to enhance safety and efficiency; underscores innovation pipeline in packaging .