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UFP Industries, Inc. UFPI 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.
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-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.
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%.
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%.
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.
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.
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%.
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.
D.R. Horton, Inc. DHI reported dismal second-quarter fiscal 2025 (ended March 31, 2025) results, with earnings and total revenues missing the Zacks Consensus Estimate and decreasing on a year-over-year basis.
D.R. Horton now expects consolidated revenues to be in the range of $33.3-$34.8 billion, down from the previously expected band of $36-$37.5 billion. This compares with $36.8 billion in fiscal 2024. Homes closed are anticipated to be within 85,000-87,000 units, down from the previously expected range of 90,000-92,000 units. This compares with 89,690 homes closed in fiscal 2024.
KB Home KBH reported lackluster fiscal first-quarter 2025 results. The quarter’s earnings and total revenues missed the Zacks Consensus Estimate and tumbled year over year.
KB Home’s results reflect the softness in the housing market as homebuyers are still navigating through affordability concerns due to high mortgage rates. Besides, the ongoing macroeconomic uncertainties and other regulatory changes in the country are adding to the instability of the housing market. Owing to these market uncertainties and a lower net order level at the end of the quarter, KB Home lowered its fiscal 2025 guidance.
Lennar Corporation LEN reported first-quarter fiscal 2025 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top line increased, but the bottom line declined.
Lennar’s performance was impacted by a challenging macroeconomic environment. Although demand remained strong, higher interest rates, inflation and weak consumer confidence made homeownership less accessible. A limited supply of affordable homes added to the difficulties, leading to a decline in the company's average sales price. Moving forward to fiscal 2025, to counter the market uncertainties, Lennar aims to focus on its volume-based strategy to drive sales and implement an asset-light, land-light business model.
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This article originally published on Zacks Investment Research (zacks.com).
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