UFP Industries, Inc. recently released its 10-Q report. The company designs, manufactures, and supplies wood and non-wood composite products and related materials in the United States and abroad through three segments: Retail, Construction, and Packaging. Its Retail segment sells treated lumber, fencing, decking, siding, and landscaping products; Construction makes trusses, lumber packages, wall panels, and millwork; and Packaging produces pallets, custom packaging, and related materials.
In management’s discussion, the company said its businesses are supported by shared corporate functions including accounting, finance, IT, human resources, marketing, purchasing, transportation, legal, and compliance. It said it continues to invest in automation and manufacturing efficiency across segments, and that the operating structure is intended to help allocate capital and resources while reducing exposure to market cycles. UFP also said its diversification is meant to offset volatility in lumber markets, which remain a major driver of pricing and margins.
For the first quarter of 2026, net sales fell 8% from a year earlier, reflecting a 1% drop in selling prices and a 7% decline in unit sales. Organic unit sales were down 13% in Retail, 5% in Construction, and 3% in Packaging, while an acquired business added 1% to Packaging unit sales. The company said weak consumer demand for new residential housing weighed on pricing in its Site Built business, and ProWood sales were hurt by soft housing demand, unfavorable weather, the absence of storm-related demand, and weaker consumer sentiment.
Gross profit declined by $32 million, or 12%, from the prior-year quarter. By segment, gross profit fell $13 million in Construction, $9 million in Packaging, $1 million in Retail, and $10 million in Corporate, while All Other rose $1 million. UFP said the decline was driven by weaker demand and pricing in Site-Built, lower ProWood volumes, higher material costs in PalletOne, and higher transportation and healthcare costs across the business.
Operating profit dropped $28 million, or 31%, year over year. That decline was partly offset by a $3 million reduction in SG&A expenses and a $1 million increase in other gains, mainly from real estate sales. The SG&A decrease came from lower incentive compensation tied to profitability and return on investment.
Cash used in operations was $104 million in the first three months of 2026, compared with $109 million in the same period of 2025. UFP said the $5 million improvement came from a $36 million lower investment in net working capital, partly offset by a $31 million drop in net earnings and non-cash expenses. Cash and cash equivalents stood at $714 million at March 2026, down from $904 million a year earlier, mainly because of share repurchases. Total liquidity, including unused borrowing capacity and a shelf agreement with lenders, was about $2.0 billion.
Lumber prices were lower in the quarter. The Random Lengths framing lumber composite averaged $426 per MBF, down 5.8% from $452 a year earlier. UFP’s Southern Yellow Pine composite averaged $410 per MBF, up 1.5% from $404, while its Spruce Pine Fir composite averaged $450 per MBF, down 9.1% from $495. Lumber costs represented 43.3% of sales in the quarter, compared with 43.8% a year earlier.
The company said 82% of its lumber purchases were domestic as of March 28, 2026, with 10% imported from Canada and 8% from other international suppliers. It also said it has submitted refund requests totaling about $20 million for tariffs paid under IEEPA-related measures, though no receivable has been recorded. Higher transportation costs also pressured results, with UFP estimating an additional $3 million of costs in the first quarter, and those costs continued rising in April. Today the company's shares have moved 2.52% to a price of $84.62. For the full picture, make sure to review UFP INDUSTRIES INC's 10-Q report.
