UFP Industries Reports Q4 2025 Financial Results: Sales Down, Cost Controls, Shareholder Returns & 2026 Outlook

UFP Industries Reports Challenging Q4 2025 Results, Outlines Strategic Direction for 2026

Key Financial Highlights

Q4 2025 Net Sales: \$1.33 billion, a decrease of 9% year-over-year (YoY).
Full-Year 2025 Net Sales: \$6.32 billion, down 5% YoY.
Diluted Earnings Per Share: \$0.70 for Q4 2025 vs. \$1.12 in Q4 2024.
Net Earnings Attributable to Controlling Interests: \$40 million in Q4 2025 vs. \$68 million a year ago.
Adjusted EBITDA: \$107.2 million for Q4 2025 (8.1% of net sales), down 19.2% YoY. Adjusted EBITDA margin for the year was 8.9%, 170bps higher than 2019 but lower than 2024.
Cash Flows from Operating Activities: \$546 million for 2025.
Free Cash Flow: \$451 million, of which nearly \$450 million was used for share repurchases.
New Product Sales: 7.6% of total net sales.

Segment Performance

Retail Segment

Net Sales: \$443.96 million in Q4 2025, down 15.4% YoY; \$2.43 billion for 2025, down 6.3% YoY.
Net Earnings: \$9.15 million in Q4 2025, down 62.4% YoY; \$86.68 million for 2025, down 37.7% YoY.
Adjusted EBITDA Margin: 5.5% in Q4 2025 vs. 8.4% in Q4 2024.
Organic Unit Sales: Declined 13% in Q4, driven by tough comps from storm-related demand in 2024.
Deckorators Business: Organic unit sales grew 17% in Q4; Surestone decking up 44%, traditional wood plastic composite decking up 35%.

Packaging Segment

Net Sales: \$370.1 million in Q4 2025, down 1.4% YoY; \$1.60 billion for 2025, down 2% YoY.
Net Earnings: \$7.5 million in Q4 2025, down 54.7% YoY; \$66.4 million for 2025, down 17% YoY.
Adjusted EBITDA Margin: 7.4% in Q4 2025 vs. 10% in Q4 2024.
Structural Packaging: Organic unit sales grew 1% in Q4.
PalletOne: Organic unit sales declined 8% in Q4, partially offset by 4% acquisition contribution.
Protective Packaging: Organic unit sales declined 2% in Q4, citing challenging market conditions.

Construction Segment

Net Sales: \$439.8 million in Q4 2025, down 9.7% YoY; \$2.0 billion for 2025, down 5.2% YoY.
Net Earnings: \$15.4 million in Q4 2025, down 44.1% YoY; \$89.6 million for 2025, down 34.2% YoY.
Adjusted EBITDA Margin: 7.5% in Q4 2025 vs. 9.2% in Q4 2024.
Site Built: Organic unit sales declined 17% in Q4, reflecting weaker single-family residential activity in western markets.
Factory Built & Concrete Forming Solutions: Organic unit sales grew 1% and 3% respectively; Commercial segment organic sales grew 3%.

Capital Structure, Shareholder Returns, and Liquidity

Liquidity: \$2.2 billion as of December 27, 2025, including over \$900 million in cash and \$1.3 billion in credit facility/shelf agreement availability.
Cost Reduction: \$60 million in cost reduction initiatives completed in 2025.
Shareholder Returns: \$515 million returned to shareholders in 2025.
Share Repurchases: 4.5 million shares repurchased for \$443 million at an average price of \$98.39, ~7% of shares outstanding at start of year.
Dividend Increase: Quarterly dividend increased to \$0.36 per share (3% YoY increase), payable March 16, 2026.

Strategic Outlook and Guidance for 2026

Market Environment: Management expects flat to slightly down demand in 2026 across segments, with residential construction markets remaining more challenged.
Growth Drivers: Market share gains, execution of cost-out programs, stocking orders, upgraded manufacturing, and expanded distribution expected to drive Deckorators and Surestone businesses.
M&A Focus: Continued pursuit of bolt-on acquisitions and growth investments, leveraging strong balance sheet.
Capital Expenditures: \$300-325 million planned for 2026.
Long-Term Targets:
- 7-10% unit sales growth annually (including acquisitions), with ≥10% of sales from new products.
- 12.5% adjusted EBITDA margin target.
- Incremental returns over hurdle rate on new investments.
- Maintain conservative capital structure.
Management Commentary: CEO Will Schwartz highlights stabilization, normalization of markets, and cautious optimism for 2026, citing improved cost discipline and strategic portfolio management.

Other Notable Items

Balance Sheet Highlights:
- Total assets: \$4.02 billion at year-end 2025.
- Cash and cash equivalents: \$914.2 million.
- Shareholders’ equity: \$3.08 billion.
Cash Flow: Free cash flow of \$451.5 million in 2025, maintenance capex of \$105.7 million, expansionary capex of \$163.7 million.
Adjusted EBITDA Reconciliation: Details provided on adjustments including share-based compensation, asset impairments, and transaction-related gains/losses.

Potential Share Price Drivers and Risks

Negative Earnings and Sales Trends: Significant YoY declines in sales, earnings, and margins across segments could pressure share price.
Large Share Repurchases: Aggressive buyback program (~7% of shares) could support share price, but also signals excess capital and a lack of organic growth opportunities.
Dividend Increase: Higher dividend may attract income-oriented investors.
M&A Activity: Stated intent for meaningful acquisitions could drive future growth, but may introduce execution risk.
Cost Reduction and Margin Expansion: \$60 million in cost savings could improve profitability if end-market demand recovers.
Forward-Looking Statements: Management’s cautious optimism and unchanged long-term targets could influence market sentiment.
Risks: Company highlights risks including currency/inflation, lumber prices, weather, tariffs/trade, supply chain, regulatory changes, cybersecurity, and potential pandemics.

Conference Call Reminder

UFP Industries will host a conference call on February 24, 2026, at 9:30 a.m. ET to discuss results and outlook, accessible via the investor relations website.

Conclusion

UFP Industries’ Q4 and full-year 2025 results reflect challenging market conditions, with declines across all segments. However, the company’s strong liquidity, cost discipline, increased dividend, and significant share repurchases provide some support for the share price. The outlook for 2026 is cautiously optimistic, with strategic investments and acquisitions expected to drive future growth, though continued market softness and execution risks remain.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Investors should review official filings and consult professional advisors before making any investment decisions.