Commodity price declines sting BlueLinx in Q2

Building products distributor BlueLinx reported second quarter sales fell 34% to $816,000 from sales of $1.124 billion in the second quarter 2022.

Earnings fell significantly as the company posted a net income of $24 million for the quarter in comparison to a net income of $71 million for the same period last year.

Sales of specialty products, which include engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, declined 28% to $571 million.

The Marietta, Georgia-based company said the decline was due to a combination of deflation and lower volume, primarily related to engineered wood products.  

Sales of structural products, including lumber, plywood, oriented strand board, rebar, and remesh, fell 46% to $245 million in the second quarter. 

The decrease in structural sales was attributed to year-over-year declines in the average composite price of framing lumber and structural panels, which were 49% and 39% respectively. 

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The Bottom Line: Big declines in the prices of lumber and structural panels lead to a 34% decline in sales and a 66% falloff in profits.

What the CEO said: “During the second quarter, we maintained both our price and cost discipline to deliver solid results in a market that continues to be soft when compared to last year,” stated Shyam Reddy, president, and CEO of BlueLinx. 

“The building products market is improving, and two-step distribution will continue to play a meaningful role given our product mix and value proposition,” Reddy added. “We remain focused on the execution of our growth strategy and consistent in our approach to capital allocation to drive long-term value creation.” 

Company Info: Click here to read the full second quarter 2023 financial report from BlueLinx.