UFP Industries, Inc. (UFPI Quick QuoteUFPI - Free Report) reported tepid results for the first quarter of 2025. Both earnings and net sales missed the Zacks Consensus Estimate and declined year over year.

The quarterly results were affected by softer demand and broad-based pricing pressures. While economic challenges are expected to persist in 2025, the company noted sequential improvement in business activity throughout the quarter, which continued into April.

Despite limited visibility, UFPI remains focused on actions within its control, including cost management and profitability initiatives. The company is on track to achieve $60 million in structural cost savings by the end of 2026 and continues to prioritize investments in higher-growth and higher-margin areas aligned with return on capital goals.

UFPI’s Earnings & Revenue Discussion

UFP Industries reported earnings per share of $1.30, which missed the Zacks Consensus Estimate of $1.59 by 18.2% and declined 33.7% from the year-ago quarter. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

UFP Industries, Inc. Price, Consensus and EPS Surprise

UFP Industries, Inc. price-consensus-eps-surprise-chart | UFP Industries, Inc. Quote

Net sales of $1.60 billion also lagged the consensus mark of $1.63 billion and declined 2.7% year over year. This downside was mainly due to a decrease of 0.7% and 2% in selling prices and organic unit sales, respectively. New product sales of $106 million contributed 6.7% to total net sales compared with 7.2% in the prior-year quarter.

Segmental Discussion of UFPI

UFP Retail Solutions: The segment reported net sales of $607 million (down from our projection of $641.3 million), down 3% year over year. Organic unit sales decreased 4% year over year, but this decline was offset by 1% increase in selling prices. Within specific product lines, Deckorators and ProWood experienced a decrease of 11% and 3%, respectively.

Adjusted EBITDA margin contracted 290 basis points (bps) from the prior year to 5.9%.

UFP Packaging: The segment’s net sales totaled $410 million, down 3% from the year-ago period’s level (up from our expectation of $407.4 million). Selling prices declined 1% and organic unit sales were down 3% year over year. This was partially offset by a 1% increase from an acquisition.

Adjusted EBITDA margin contracted 190 bps from the prior year to 8.5%.

UFP Construction: Net sales in the segment were $516 million (up from our expectation of $509.4 million), flat year over year. Organic unit sales grew 3%, but this gain was offset by 3% selling prices. Factory Built saw a 13% rise in organic unit sales, driven by higher industry production and market share expansion. Organic unit sales increased 4% in the Commercial segment and 3% in Concrete Forming. In contrast, organic unit sales declined 9% in Site Built, due to softer demand.

Adjusted EBITDA margin contracted 320 bps from the prior year to 7.2%.

UFPI’s Operating Highlights

Selling, general and administrative expenses, accounting for 11% of net sales, decreased 70 bps year over year.

Adjusted EBITDA of $142.2 million declined year over year from $180.8 million. Adjusted EBITDA margin also contracted 210 bps from the prior year to 8.9%.

Balance Sheet & Cash Flow of UFPI

As of March 29, 2025, the company had nearly $2.2 billion in liquidity. Cash and cash equivalents were $903.6 million at the first-quarter end compared with $1.17 billion at the end of 2024. Long-term debt and finance lease obligations were $229.9 million, up from $229.8 million at 2024-end.

At the first-quarter end, net cash used in operating activities was $108.8 million compared with $16.8 million cash used in the corresponding year-ago period.

On April 23, 2025, UFPI’s board of directors approved a quarterly dividend payment of 35 cents per share, a 6% increase from the quarterly dividend of 33 cents. The dividend is payable on June 16 to its shareholders of record as of June 2.

UFPI's board of directors also approved an amendment to the share repurchase program. The company increased the authorization from $200 million to $300 million, with no change to the end date of July 31, 2025.

In the quarter, UFPI purchased approximately 649,060 shares at an average price of $108 under the repurchase plan. Again, in April, the company repurchased 1,022,493 shares at an average price of $104.65. As of April 28, 2025, the company had $122 million remaining under its authorized repurchase program.

Short-Term Outlook of UFPI

UFPI is actively working with its domestic and international suppliers to manage the potential impact of proposed tariffs on several raw materials, which are currently on hold in Mexico and Canada. If implemented, tariffs could drive higher demand for domestic products, likely increasing costs due to capacity constraints. However, with strong relationships across the supply chain and no ownership of foreign sawmills, the company believes it is well-positioned to adapt with minimal financial disruption after a short adjustment period. UFPI continues to monitor the evolving trade landscape and remains prepared to act quickly to minimize disruption.

In terms of market conditions, the company expects demand to remain subdued through the remainder of 2025, alongside a competitive pricing environment. All segments are expected to see a slight decline in overall demand, with a decline in Site Built likely to be partially offset by growth in Factory Built.

UFPI Reaffirms Long-Term Outlook

Despite near-term challenges, UFPI remains committed to its long-term growth strategy. The company still aims to achieve annual unit sales growth of 7-10%, including contributions from bolt-on acquisitions, while driving at least 10% of total sales from new products. Additionally, UFPI targets EBITDA margins of 12.5%.

UFPI’s Zacks Rank & Recent Construction Releases

UFP Industries currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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