UFP Industries' Q3 Earnings Fall Short of Expectations Amid Softening Demand

GRAND RAPIDS, Mich. - UFP Industries, Inc. (NASDAQ:UFPI) reported third-quarter earnings that fell below analyst expectations as it faces softening demand and pricing pressures across its business segments.

The wood products manufacturer posted earnings of $1.64 per share, or $100 million in net income. This compares to $2.10 per share, or $134 million, in the same quarter last year. Analysts had anticipated earnings of $1.89 per share.

Revenue declined by 10% year-over-year to $1.65 billion, falling short of the consensus estimate of $1.77 billion. The company attributed the decline to a 3% decrease in organic unit sales and a 7% decrease in selling prices.

CEO Matthew J. Missad stated, "Our third-quarter results were impacted by soft demand and broad-based pricing pressure, which lowered our revenue and profit margins. We are addressing these ongoing challenges by working more efficiently, aligning our overhead costs with lower demand levels, and eliminating unnecessary expenses."

On a segment basis, UFP Retail Solutions’ sales fell 13% to $636 million, while UFP Packaging revenue dropped 11% to $402 million. The UFP Construction segment reported revenues of $535 million, marking an 8% decrease in sales.

Looking ahead, the company expects challenging conditions to persist through the remainder of 2024 and into 2025, resulting in softer year-over-year comparisons. However, Missad noted that UFP is "well-positioned to capitalize on opportunities when markets recover" and is making progress toward its long-term profitability goals.

The company finished the quarter with $1.19 billion in cash, compared to $957 million a year ago. UFP's board approved a 10% increase in its quarterly dividend to $0.33 per share.