Builders FirstSource sales and profits fall in Q4
quarter 2022 sales of $4.4 billion.
The Dallas, Texas-based prodealer giant and building solutions provider said the drop was caused by a decline in core organic net sales of 1.3% and commodity deflation of 5%, partially offset by growth from acquisitions of 1.6%.
During the quarter, sales to single-family builders slipped by 3.5%, while multifamily and repair and remodel sales saw a 4.3% increase.
Lower sales resulted in the company’s fourth quarter net income declining 8.8% to $350.7 million compared to a fourth quarter 2022 net income of $384.5 million.
Net sales for the full year declined 24.8% to $17.1 billion in comparison to 2022 net sales of $22.7 billion.
Sales in 2023 were the result of a decline in core organic net sales of 17.3% and commodity deflation of 11.1%, partially offset by growth from acquisitions of 3.6%, the company said.
Single-family builder sales decreased 24.1%, while multifamily and repair and remodel sales increased 20.3% and 0.7%, for the year. On a weighted basis, the decline in single-family reduced overall sales by 18.9%, Builders FirstSource reported.
Builders FirstSource posted a net income of $1.5 billion for the year, down 44% from a net income of $2.7 billion in 2022.
For 2024, Builders FirstSource said it expects sales to be in the range of $17.5 billion to $18.5 billion.
Additionally, the company said that within its geographies, single-family starts are projected to be up mid-single digits, multifamily starts down 20% to 30%, and repair and remodel is projected to be up low single digits.
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The Bottom Line: Commodity deflation of 5% and lower single-family builder sales result in 4.7% decline in net sales for the fourth quarter and a 44% plunge in net income.
What the CEO said: “I'm proud of our fourth quarter and full-year results, which demonstrated the strength of our broad product portfolio and continued execution by our resilient team members,” said Builders FirstSource CEO Dave Rush. Despite a challenging operating environment in 2023, which saw a significant reduction in single-family starts, we delivered a high-teens EBITDA margin. We accomplished this through operational rigor and by closely partnering with our customers to help address their pain points through use of our value-added solutions, solidifying our position as the easiest to do business with across the industry.”
Looking ahead, Rush added, “As we turn to 2024, we are excited about the opportunities in front of us. As we outlined at our recent Investor Day in December, we remain focused on our consistent strategy of growing our value-added products and services, investing in digital innovations, operating efficiently, and compounding long-term shareholder value.”
Company info: Click here for the full fourth quarter 2023 financial report from Builders FirstSource.
