Builders FirstSource battles weak housing market in Q3
Declines in new home construction impacted Builders FirstSource in its third quarter.
The nation’s largest prodealer reported third quarter sales declined 21.3% to $4.5 billion compared to third quarter 2022 net sales of $5.8 billion.
Along with a weak housing market, commodity deflation also contributed to the decline, Builders FirstSource said.
Core organic sales at Builders FirstSource fell 13.5% during the period as the Dallas, Texas-based company battled commodity deflation of 9.1%. Builders FirstSource also had one less selling day in the third quarter of 2023 compared to the third quarter last year.
Sales to single-family builders fell 19.2% for the quarter while multifamily sales moved ahead 6.4% with repair and remodel sales seeing a 1.4% improvement. Growth from acquisitions also contributed a 2.9% increase to overall sales for the quarter.
Lower sales also drove down the company’s net income by 38.8%. Builders FirstSource posted a third quarter net income of $451.5 million compared to a net income of $738 million in the prior third quarter.
Looking ahead, Builders First Source is now forecasting full-year 2023 sales from $16.8 billion to $17.1 billion. The prodealer expects its adjusted EBITDA to reach $2.7 billion to $2.8 billion.
Builders FirstSource operates 570 locations in 42 states.
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The Bottom Line: A soft housing market and sagging commodity prices result in profits falling by 38.8% to $451.5 million.
What the CEO said: “Despite industry volatility and macroeconomic headwinds, our resilient third quarter results reflect the strength of our value-added portfolio, broad footprint, and operational initiatives,” said Dave Rush, CEO of Builders FirstSource. “We remain confident in our 2023 outlook as we focus on being the best partner for our customers and executing our strategy to drive long-term growth.”
What the CFO said: “Our third quarter results demonstrate the effectiveness of our operating model in the face of macro volatility,” said CFO Peter Jackson. We are maintaining a healthy balance sheet and prudently deploying capital to the highest return opportunities, which included acquisitions and share repurchases during the third quarter.
Company Info: Click here for the full third quarter 2023 financial report from Builders FirstSource.
