UFP Industries Sales Rise 11% but Freight and Lumber Costs Cut Earnings

UFP Industries grew third-quarter sales 11% on Wednesday, but soaring trucking costs and pricier lumber pushed earnings down 22%, as the wood products maker leaned on new products and cost cuts to offset a weak housing market.

The Grand Rapids, Michigan-based company reported net sales of $1.73 billion, up from $1.56 billion a year earlier, according to the earnings release it filed with an 8-K on Wednesday. Diluted EPS fell to $1.05 from $1.29, and net earnings attributable to controlling interests dropped to $58 million from $75 million.

Adjusted EBITDA declined 14.8% to $119.3 million, and adjusted EBITDA margin narrowed to 6.9% of sales from 9.0%.

Freight is the problem

The company said transportation costs, net of fuel surcharges and price adjustments, rose $19 million, or 1.3% of net sales, from a year ago. Freight spot rates excluding fuel jumped 30% during the quarter before stabilizing at an elevated level near the end, as smaller carriers exited the market and constrained capacity.

"Profitability continued to be affected by elevated transportation and material costs, which limited the earnings benefit from higher volumes and an improved earnings profile," President and CEO Will Schwartz said in the release.

Volumes and new products grow

Sales growth came from a 4% increase in organic units, 2% from acquisitions and 5% from higher selling prices. New products rose to 8.7% of net sales from 6.8% a year earlier.

In UFP Retail, sales rose 6.8% to $634.5 million. Deckorators organic unit sales grew 21%, with Surestone decking sales up 70%, while ProWood organic units fell 4% on weaker consumer sentiment. Segment adjusted EBITDA fell 14.7%, mainly on an $8 million rise in transportation costs.

UFP Packaging sales jumped 18.0% to $465.8 million, led by 14% organic unit growth in Structural Packaging, but adjusted EBITDA fell 20.5% on higher freight and material costs. UFP Construction sales rose 11.3% to $552.4 million, with Site Built organic units up 12% and Commercial up 20%, while adjusted EBITDA slipped 10.0%.

Cost cuts and capital

Schwartz said the company now expects to meet or exceed its initial $60 million cost-savings goal by year-end. UFP's full-year 2026 outlook is unchanged, and it is not assuming a meaningful improvement in underlying demand through year-end, with new residential construction expected to remain challenging.

The company repurchased 2,169,224 shares for $182.7 million in the first nine months at an average price of $84.24, and about $198 million remained under its authorization as of Oct. 28. On Oct. 21, the board declared a quarterly dividend of $0.36 per share, payable Dec. 15, a 3% increase from the 2025 rate of $0.35.

UFP also announced plans on Oct. 26 to acquire wood pallet maker Apache Products in November for an estimated $27 million in cash, and on Oct. 23 it extended its $750 million revolving credit facility to Oct. 23, 2031.

The company ended the quarter with about $2.0 billion of liquidity, including more than $677 million in cash. Operating cash flow for the first nine months was $235 million.

Sources

1. UFP Industries Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0000912767-26-000058)

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