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Why Is UFP Industries (UFPI) Up 12.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for UFP Industries (UFPI - Free Report) . Shares have added about 12.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UFP Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
UFP Industries (UFPI - Free Report) Q2 Earnings Top Estimates
UFP Industries, Inc. reported impressive earnings for second-quarter 2020. Earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis, given greater-than-expected demand for home improvement products, as well as lower costs.
Recently, the company acquired T&R Lumber, a manufacturer and distributer of products primarily used by nurseries, including tree boxes, plastic containers, stakes as well as trellises.
Earnings & Net Sales Discussion
During the reported quarter, UFP Industries reported earnings of $1.08 per share, comfortably surpassing the consensus mark of 63 cents by 71.4% and increasing 22.7% from the year-ago period.
Net sales of $1.24 billion topped the consensus mark of $1.09 billion by 13.8% and inched up 0.2% on a year-over-year basis. Higher lumber prices resulted in 3% year-over-year growth, offset by a 3% decline in unit sales. Retail sales contributed to overall sales growth, with 3% improvement in April and 47% in June.
New product sales grew 6% year over year, driven by a 16% rise in retail sales.
End-Market Sales Discussion
UFP Retail: The segment reported sales of $609.2 million during the quarter, up 26.4% year over year. Retail unit sales were also up 22% from the year-ago quarter, backed by 72% growth in Home and Decor, 27% rise in ProWood, 23% improvement in Fence, Lawn and Garden, along with 9% increase in UFP-Edge. Selling prices drove the same by 4%.
UFP Industrial: The Industrial segment’s sales totaled $224.4 million, reflecting a decline of 23% from the year-ago period. During the quarter, unit sales fell 27% year over year, partially offset by 4% higher selling prices.
UFP Construction: Sales in the segment were $359.2 million, down 13.4% year over year. A 16% decline in unit sales was partially offset by a 3% increase in selling prices. Unit sales fell in all the segments: 5% in Concrete Forming, 20% in Factory Built, 19% in Commercial and 15% in Site Built.
Notably, both Industrial and Construction showed a steady improvement from April to June.
Operating Highlights
Gross margin of 16.5% improved 140 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 9.2% of net sales — increased 10 bps year over year. EBITDA of $110.4 million increased 22% year over year.
Balance Sheet & Cash Flow
At quarter-end, cash and cash equivalents were $200.5 million, significantly up from $20.5 million in the comparable prior-year period. In the past six months, net cash from operating activities totaled $147.2 million compared with $70.9 million in the corresponding period of 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 14.29% due to these changes.
VGM Scores
Currently, UFP Industries has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise UFP Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is UFP Industries (UFPI) Up 12.7% Since Last Earnings Report?
It has been about a month since the last earnings report for UFP Industries (UFPI - Free Report) . Shares have added about 12.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UFP Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
UFP Industries (UFPI - Free Report) Q2 Earnings Top Estimates
UFP Industries, Inc. reported impressive earnings for second-quarter 2020. Earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis, given greater-than-expected demand for home improvement products, as well as lower costs.
Recently, the company acquired T&R Lumber, a manufacturer and distributer of products primarily used by nurseries, including tree boxes, plastic containers, stakes as well as trellises.
Earnings & Net Sales Discussion
During the reported quarter, UFP Industries reported earnings of $1.08 per share, comfortably surpassing the consensus mark of 63 cents by 71.4% and increasing 22.7% from the year-ago period.
Net sales of $1.24 billion topped the consensus mark of $1.09 billion by 13.8% and inched up 0.2% on a year-over-year basis. Higher lumber prices resulted in 3% year-over-year growth, offset by a 3% decline in unit sales. Retail sales contributed to overall sales growth, with 3% improvement in April and 47% in June.
New product sales grew 6% year over year, driven by a 16% rise in retail sales.
End-Market Sales Discussion
UFP Retail: The segment reported sales of $609.2 million during the quarter, up 26.4% year over year. Retail unit sales were also up 22% from the year-ago quarter, backed by 72% growth in Home and Decor, 27% rise in ProWood, 23% improvement in Fence, Lawn and Garden, along with 9% increase in UFP-Edge. Selling prices drove the same by 4%.
UFP Industrial: The Industrial segment’s sales totaled $224.4 million, reflecting a decline of 23% from the year-ago period. During the quarter, unit sales fell 27% year over year, partially offset by 4% higher selling prices.
UFP Construction: Sales in the segment were $359.2 million, down 13.4% year over year. A 16% decline in unit sales was partially offset by a 3% increase in selling prices. Unit sales fell in all the segments: 5% in Concrete Forming, 20% in Factory Built, 19% in Commercial and 15% in Site Built.
Notably, both Industrial and Construction showed a steady improvement from April to June.
Operating Highlights
Gross margin of 16.5% improved 140 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 9.2% of net sales — increased 10 bps year over year. EBITDA of $110.4 million increased 22% year over year.
Balance Sheet & Cash Flow
At quarter-end, cash and cash equivalents were $200.5 million, significantly up from $20.5 million in the comparable prior-year period. In the past six months, net cash from operating activities totaled $147.2 million compared with $70.9 million in the corresponding period of 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 14.29% due to these changes.
VGM Scores
Currently, UFP Industries has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise UFP Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.