UFP Industries (UFPI) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales were $1.60 billion, down 2.7%-3% year-over-year, with volumes down 2% and prices down 1%, and net earnings attributable to controlling interests of $78.8 million; diluted EPS was $1.30, a 35% decrease from last year.

• Sequential business improvement was noted through the quarter and into April, despite ongoing macro uncertainty and limited visibility for the rest of the year.

• The company remains focused on cost-out programs, margin expansion, and investing in value-added products and innovation, targeting $60 million in structural cost savings by year-end 2026.

• UFP Industries operates through Retail, Packaging, and Construction segments, serving diverse end markets with a global footprint of 215 facilities in 8 countries.

• Strategic initiatives include organic growth, M&A, product innovation, and operational improvements for above-market growth and compounding margins.

Financial highlights

• Adjusted EBITDA for Q1 2025 was $142.2 million (8.9% margin), down from $180.8 million (11.0%) in Q1 2024; TTM adjusted EBITDA was $643.6 million (9.7% margin).

• Net earnings for Q1 2025 were $78.8 million, with diluted EPS of $1.30; TTM net earnings were $551 million.

• Return on invested capital was 15.5% for Q1 and 18.3% for TTM, both above the 15% hurdle rate.

• Operating cash flow was a use of $109 million in Q1, with TTM operating cash flow at $643 million; cash and cash equivalents at quarter-end were about $904–905 million, with total liquidity of $2.2 billion.

• SG&A expenses declined $16 million year-over-year, with cost reductions offsetting increased advertising for Surestone.

Outlook and guidance

• Business conditions impacting Q1 are expected to persist through 2025, with demand and pricing remaining soft and competitive across all segments.

• Management expects end-market demand to be slightly down for the remainder of 2025, with factory-built housing slightly up and plans to reduce SG&A and capacity to improve operating profits by $60 million by year-end 2026.

• Long-term targets remain: 7%-10% annual unit sales growth (including acquisitions), 12.5% EBITDA margins, and strong return on capital, though the timeline is extended.

• Expectation for improved retail segment performance in the second half as new product placements and capacity come online.

• The company is monitoring potential lumber tariffs but expects to adapt quickly with minimal long-term impact.