Lumber prices impact UFP Industries in Q2
UFP Industries (UFPI) is one of the latest companies to report that they felt the sting of sagging lumber and material prices.
The Livonia, Michigan-based building products distributor and manufacturer reported second quarter 2023 sales fell 30% to $2.04 billion compared to second quarter 2022 sales of $2.9 billion.
The company attributed the decrease to a 22% decline in prices and an 8% percent drop in organic unit sales.
UFPI noted that new product sales of $184 million decreased 9%, primarily due to lower lumber prices that the company passed on to customers. New product sales as a percent of total sales rose to 9% from 7% in the second quarter of 2022.
The company’s retail division posted net sales of $920 million, down 18% compared to the second quarter of 2022. This dropoff was also attributed to an 18% decline in selling prices due to the pricing decreases in the lumber market.
UFPI construction sales reached $550 million but plummeted 44% compared to the second quarter of 2022. The company said the decline was due to a 26% decrease in selling prices and an 18% decrease in organic unit sales.
Additionally, UFPI posted second quarter net earnings of $150,788 million — a 27% decline from net earnings of $207,853 million for the same period last year.
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The Bottom Line: As sales net sales drop 30%, largely due to a decrease in lumber prices, UFPI’s net earnings slide 27% to $150,788 million in the second quarter.
What the CEO said: “I want to thank the hard-working employees of UFP Industries for delivering another strong quarter. Their focus on innovation, efficiencies, and value-added solutions has helped us improve our gross margins, even as lower pricing and volume resulted in decreases in our top- and bottom-line results,” said UFPI Chairman and CEO Matt Missad. “The positive changes in our business mix and operating structure are producing better performance when compared to previous downward cycles in our business.”
Company Info: Read the full second quarter 2023 UFP Industries’ financial report here.
