UFP Industries’ first quarter results drew a negative market reaction as both revenue and non-GAAP profit fell short of Wall Street expectations. Management attributed the underperformance to sluggish demand, persistent pricing competition, and unfavorable product mix, particularly in the construction and packaging segments. CEO Will Schwartz noted, “Margins remain pressured from unfavorable manufacturing variances, competitive pricing, higher input and transportation costs, and unfavorable mixed shifts.” Despite these headwinds, the company cited sequential improvement in business activity through the quarter, especially in March, and pointed to strong cash reserves as support for continued investment.
Is now the time to buy UFPI? Find out in our full research report (it’s free).
UFP Industries (UFPI) Q1 CY2025 Highlights:
- Revenue: $1.6 billion vs analyst estimates of $1.63 billion (2.7% year-on-year decline, 1.9% miss)
- Adjusted EBITDA: $142.2 million vs analyst estimates of $159.3 million (8.9% margin, 10.8% miss)
- Operating Margin: 5.8%, down from 8.2% in the same quarter last year
- Sales Volumes fell 2% year on year (-13% in the same quarter last year)
- Market Capitalization: $5.71 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions UFP Industries’s Q1 Earnings Call
- Kurt Yinger (D.A. Davidson) asked if competitive pricing and cost pressures are expected to worsen or remain stable. CFO Mike Cole replied that current challenges are likely to persist, with some margin stabilization in packaging but continued pricing pressure in construction.
- Yinger (D.A. Davidson) also inquired about balancing market share retention with passing through lumber cost increases. CEO Will Schwartz stated, “We do not want to give up market share,” emphasizing efforts to mitigate cost increases while maintaining volume.
- Yinger (D.A. Davidson) questioned the timing of Deckorators’ customer transition impact. Schwartz explained that most of the negative effects would be behind the company after Q2, with expectations for volume gains later in the year.
- Reuben Garner (Benchmark) followed up on Deckorators’ capacity expansion and its implications for revenue growth. Cole detailed three phases of expansion, indicating sufficient capacity to support plans for doubling market share over five years.
- Ketan Mamtora (BMO Capital Markets) sought clarification on the EBITDA impact from Deckorators’ customer shift. Cole attributed an 11% unit decline and $2 million in negative manufacturing variances to the transition, but expects recovery as volumes normalize.
Catalysts in Upcoming Quarters
In the quarters ahead, our analysts will closely watch (1) the pace of Deckorators’ volume recovery and execution of expanded manufacturing capacity, (2) whether cost-reduction efforts translate into improved margins in packaging and construction, and (3) the conversion of the active M&A pipeline into deals that enhance scale and profitability. The impact of tariff developments and input cost trends will also be important signposts.
UFP Industries currently trades at $96.33, down from $106.49 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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