Builders FirstSource Profit Roughly Halves as Housing Slump Weighs; Outlook Midpoints Held

Builders FirstSource said Thursday its third-quarter profit roughly halved as a weak housing-starts environment weighed on sales and margins, but the building-materials supplier said results met its expectations and kept the midpoints of its full-year sales and profit outlook.

Net income fell to $60.4 million, or 56 cents a diluted share, from $122.4 million, or $1.10, a year earlier, according to the earnings release it filed with an 8-K on Thursday. Adjusted EPS dropped 24.5% to $1.51 from $2.00.

Single-family slump drives the decline

Net sales slipped 2.2% to $3.9 billion. Core organic net sales fell 3.9%, and commodity deflation shaved off another 0.1%, partly offset by 1.8% growth from acquisitions.

Single Family, the company's biggest end market, declined 6.2%, cutting total net sales by 4.3% on a weighted basis. Multi-Family rose 2.0%, and Repair and Remodel/Other edged up 0.3%.

Gross profit fell 10.6% to $1.1 billion, and gross margin narrowed 260 basis points to 27.8%. Adjusted EBITDA dropped 28.3% to $311.1 million, and adjusted EBITDA margin contracted 290 basis points to 8.1%. Selling, general and administrative expenses rose 0.3% to $973.2 million, lifting SG&A to 25.3% of sales.

"While housing market conditions remain challenging, we are focused on what we can control," CEO Peter Jackson said in the release, pointing to investments in value-added products and technology.

Outlook narrowed, midpoints kept

CFO Pete Beckmann said third-quarter results "met our expectations" and that the company is "narrowing our full-year outlook and maintaining the midpoints for net sales and Adjusted EBITDA."

For 2026, Builders FirstSource now expects:

• Net sales of $14.2 billion to $14.6 billion
• Gross margin of 27.5% to 28.5%
• Adjusted EBITDA of $1.075 billion to $1.125 billion
• Free cash flow of about $400 million to $450 million

The outlook assumes single-family starts in its markets fall by a mid- to high-single-digit percentage, multifamily starts decline by a mid-single-digit percentage and repair and remodel activity slips 1%.

Cash flow and leverage

Free cash flow fell 83.7% to $76.0 million from $464.9 million a year earlier, which the company attributed mainly to lower net income and higher net working capital. Operating cash flow was $146.6 million.

Net debt stood at $4.6 billion at quarter-end, or 4.1 times trailing 12-month adjusted EBITDA, up from 2.3 times a year earlier. Liquidity was $1.5 billion.

The company has $500 million left under its share repurchase authorization. Since its buyback program began in August 2021, it has repurchased 102.6 million shares, or 49.7% of its shares outstanding, for a total of $8.3 billion.

Builders FirstSource said it delivered about $23 million in productivity savings in the quarter and expects $60 million to $70 million for the full year. It plans to host an Investor Day at the New York Stock Exchange on Nov. 17.

Sources

1. Builders FirstSource Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0001193125-26-436795)

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