UFP INDUSTRIES INC
For the period ended Mar 28, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 28, 2026 · Filed May 6, 2026
UFPI$79.92-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-27; filed 2025-11-05.
0001104659-25-106860
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-28; filed 2026-05-06.
0001104659-26-056076
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 86 current paragraphs.
46 unchanged; 30 reworded; 9 added; 18 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 67 previous and 60 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Lumber prices in 2026 remain lower due to overall weak demand in the end markets that primarily consume softwood lumber – new housing, housing repair and remodel activity, and industrial (including packaging). Recent sequential increases are primarily due to recent mill capacity curtailments as they attempt to better align supply with demand. Weak overall demand has been impacted by a variety of factors, including higher inflation and interest rates as well as lower consumer sentiment and greater economic uncertainty.
Current report
In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”), which the U.S. administration relied on to impose certain tariffs, does not authorize the administration to impose tariffs. As a result of this ruling, the U.S. Court of International Trade (“CIT”) issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to begin formalizing a process for refunds. The CBP recently opened an online portal allowing importers of record to submit refund requests related to tariffs issued under the IEEPA. The Company has submitted refund requests for tariffs paid to CBP under the IEEPA totaling approximately $20 million, and the request has been acknowledged by the CBP. Acknowledgment of a request by CBP does not indicate approval of the request or that a refund will be paid, and we have not accrued any receivable relating to these potential refunds. It is anticipated that the administration will file appeals or take other action with respect to orders issued by CIT concerning the refund process. As a result, there is uncertainty as to the timing and extent of refund payments.
Current report
IMPACT OF HIGHER TRANSPORTATION COSTS ON OUR OPERATING RESULTS
Current report
Recent geopolitical events have contributed to an increase in our costs across the enterprise, primarily related to fuel and transportation. In the first quarter of 2026, we estimate that we absorbed an additional $3 million of these costs which adversely impacted our profitability in March. These costs continued to increase in April. We are taking actions intended to recover these costs through pricing to our customers. However, there are factors beyond our control, including contract terms and market conditions, that may impact our ability to be successful in these efforts. Please see “Risk Factors” below for more information.
Current report
Net sales in the first quarter of 2026 decreased by 12% compared to the same period of 2025 due to a 13% decrease in units and a 1% increase in selling prices. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 15%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 8%. The 15% decline in ProWood volume is primarily due to unfavorable winter weather across the Midwest and Northeast, the absence of storm-related demand which carried over from the fall of 2024 into early 2025, the loss of low margin commodity sales which commenced in the second quarter of 2025, and generally weaker consumer sentiment. UFP Edge unit sales declined 20% due to the closure of the Bonner, MT facilities at the end of 2025 and rationalizing product portfolio to those that can achieve profitability targets. Deckorators’ unit sales increased 2% compared to the same period of 2025. Within that business unit, sales of wood-plastic composite decking and Surestone™ mineral-based composite decking increased 27% and 4% from the prior year, respectively. The increases were offset by railings, which declined 6% from the prior year.
Current report
Earnings from operations decreased in the first quarter of 2026 compared to 2025 by $2 million, or 7%, as a result of the factors mentioned above.
Current report
SG&A decreased by approximately $3 million, or 5%, in the first quarter of 2026 compared to the same period of 2025. Accrued bonus expense decreased approximately $2 million relative to the same period of 2025 and totaled $6 million for the quarter. We also achieved $2 million of savings from our cost reduction efforts. These reductions were offset by a $1 million increase in healthcare costs.
Current report
SG&A decreased by approximately $1 million, or 2%, in the first quarter of 2026 compared to the same period of 2025. Accrued bonus expense decreased by $4 million and totaled $6 million for the quarter. This decrease was partially offset by an increase in legal fees and settlements of $2 million and an increase in healthcare costs of $1 million.
Current report
Earnings from operations decreased in the first quarter of 2026 compared to 2025 by $13 million, or 45%, due to the factors mentioned above.
Removed paragraphs (18)
Previous report
Lumber prices in 2025 have declined since the Spring peak and September prices are lower year over year. The decline in overall lumber prices, in spite of higher duties on Canadian lumber imported to the United States, reflects the overall weak demand environment in the end markets that primarily consume softwood lumber – new housing, housing repair and remodel activity, and industrial (including packaging).
Previous report
Net sales in the third quarter of 2025 decreased by 7% compared to the same period of 2024 due to a 6% decrease in units and a 1% decrease in selling prices. Unit changes within this segment consisted of a 5% decrease in ProWood and 31% decrease in Edge as we complete the closure of our Bonner, Montana plants and transition production to other facilities, partially offset by a 5% increase in Deckorators. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 6%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, also decreased approximately 6%. Of the 6% increase in net sales for our Deckorators business unit compared to the same period of 2024, wood-plastic composite decking and mineral-based-composite decking (sold under our new Surestone tradename) increased 9% and 31% from the prior year, respectively, partially offset by railings which declined 13% from the prior year. The decline in our railing sales is due to lost market share with a big box customer which began impacting sales at the beginning of the year. However, we gained market share with another big box customer which began to more favorably impact our sales beginning in July as initial stocking orders were received for one of our mineral-based composite decking products. Overall, for the remainder of this year, we believe our Deckorators business unit will benefit from a modest net gain in market share as we continue stocking additional stores and as the new capacity we’ve added to produce our mineral-based composite decking reaches our throughput targets. We expect to realize the full benefit of our net market share gain in 2026. Our long-term goal is to double our market share of composite decking and railing over the next 5 years. The decline in ProWood volume is primarily due to higher interest rates and weaker consumer sentiment resulting in a softening of demand to complete repair and remodel projects.
Previous report
Earnings from operations decreased in the third quarter of 2025 compared to 2024 by $21 million, or 50%, as a result of the factors mentioned above, as well as a foreign exchange loss totaling $1 million in 2025 compared to a gain of $3 million in 2024, and an increase in the net loss on disposition and impairment of assets, which was comprised of machinery and equipment impairment charges of $11 million, lease impairment charges of $2 million and intangible asset impairment charges of $2 million, partially offset by a gain on the sale of machinery and equipment totaling $5 million.
Previous report
Net sales in the first nine months of 2025 decreased by 4% compared to the same period of 2024, due to a 5% decrease in units, partially offset by a 1% increase in selling prices. Unit changes within this segment consisted of decreases of 3% in Deckorators, 5% in ProWood, and 15% in Edge as we complete the closure of our Bonner, Montana plants and transition production to other facilities. Unit sales to big box customers decreased approximately 5%, while unit sales to independent retailers decreased approximately 6%. Within our Deckorators business unit, our sales of railings decreased by 26% due to the lost market share described above. These decreases were partially offset by a 34% increase in our mineral-based-composite decking as consumers continue to see the benefits of its superior product attributes and a 1% increase in wood-plastic composite decking.
Previous report
Gross profits decreased by $46 million, or 14% to $275 million for the first nine months of 2025 compared to the same period in 2024. The change in gross profit was attributable to the following:
Previous report
SG&A decreased by approximately $12 million, or 7%, in the first nine months of 2025 compared to the same period of 2024. The overall decrease was due to a decline in accrued bonus expense of $13 million, which totaled $32 million for the first nine months of 2025, as well as a $4 million decrease in wages and benefits, and many smaller decreases in several accounts totaling $12 million. These decreases were partially offset by an increase in advertising of $17 million primarily related to Deckorators.
Previous report
Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $47 million, or 32%, as a result of the factors mentioned above as well as a foreign exchange loss totaling $1 million in 2025 compared to a gain of $3 million in 2024, and an increase in the net loss on disposition and impairment of assets, which was comprised of machinery and equipment impairment charges of $11 million, lease impairment charges of $2 million and intangible asset impairment charges of $2 million, partially offset by a gain on the sale of machinery and equipment totaling $5 million.
Previous report
SG&A decreased by approximately $4 million, or 7%, in the third quarter of 2025 compared to the same period of 2024. The decrease is attributable to a decrease in wages and benefits of $1 million and many smaller decreases in several accounts totaling $4 million. Accrued bonus expense increased approximately $1 million relative to the same period of 2024 and totaled $9 million for the quarter.
Previous report
Earnings from operations increased in the third quarter of 2025 compared to 2024 by $6 million, or 26%, due to the factors discussed above, as well as an increase in the net gain on disposition and impairment of assets, which was comprised of a gain on the sale of machinery and equipment totaling $6 million.
Previous report
Net sales in the first nine months of 2025 decreased 2% compared to the same period of 2024, due to a 2% decrease in selling prices, due to competitive price pressure, and a 1% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 4% decrease in structural packaging, primarily due to a decline in demand, partially offset by 12% unit growth in Protective Packaging due to geographic expansion and market share gains. Unit sales at PalletOne increased 5% due to acquisitions; there was no change in organic unit sales.
Previous report
Gross profits decreased by $33 million, or 14%, for the first nine months of 2025 compared to the same period in 2024. The change in gross profits was attributable to the following.
Previous report
SG&A decreased by approximately $20 million, or 13%, in the first nine months of 2025 compared to the same period of 2024. Accrued bonus expense decreased $5 million, and totaled $25 million for the nine months of 2025. The remaining decrease is attributable to a $3 million decrease in insurance costs, a $2 million decrease in sales incentive compensation, a $2 million decrease in travel and entertainment expenses, $1 million decrease in wages and benefits, and many smaller decreases in several accounts totaling $7 million.
Previous report
SG&A decreased by approximately $10 million, or 15%, in the third quarter of 2025 compared to the same period of 2024. Accrued bonus expense decreased by $3 million and totaled $10 million for the quarter. The decrease in SG&A was also attributable to a decrease in wages and benefits of $2 million, bad debts of $2 million, and many smaller decreases in several accounts totaling $3 million.
Previous report
Earnings from operations decreased in the third quarter of 2025 compared to 2024 by $10 million, or 24%, due to the factors mentioned above.
Previous report
Net sales in the first nine months of 2025 decreased 4% compared to the same period of 2024 and consisted of a 5% decrease in selling prices, partially offset by a 1% increase in unit sales. Unit changes within this segment consist of increases of 8% in factory-built, primarily due to an increase in industry production, 8% in concrete forming, and 8% in commercial construction. These increases were offset by a unit decline of 9% in site-built housing due to lower demand.
Previous report
Gross profits decreased by $69 million, or 20% for the first nine months of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:
Previous report
SG&A decreased by approximately $26 million, or 12%, in the first nine months of 2025 compared to the same period of 2024. Accrued bonus expenses decreased $13 million and totaled $30 million for the first nine months of 2025. The decrease in SG&A was also attributable to a decrease in our sales incentive compensation totaling $4 million, wages and benefits totaling $3 million, travel expense totaling $2 million, and many smaller decreases in several accounts totaling $4 million.
Previous report
Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $44 million, or 31%, due to the factors mentioned above.
Reworded paragraphs (30)
Previous wording
UFP Industries, Inc. is a holding company with subsidiaries in North America, Europe, Asia, and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. Our business segments are functionally interdependent and are supported by common corporate services, such as accounting and finance, information technology, human resources, marketing, purchasing, transportation, legal and compliance, among others. We regularly invest in automation and implement best practices to improve the efficiency of our manufacturing facilities across each of the segments. The results and improvements from these investments are shared among the segments. This exchange of ideas drives faster innovation for new products, processes, and product improvements. While the majority of our facilities serve only one business segment, many of our larger facilities serve two or more segments.
Current wording
UFP Industries, Inc. is a holding company with subsidiaries in North America, Europe, Asia, and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. We are headquartered in Grand Rapids, Michigan. Our business segments are functionally interdependent and are supported by common corporate services, such as accounting and finance, information technology, human resources, marketing, purchasing, transportation, legal and compliance, among others. We regularly invest in automation and implement best practices to improve the efficiency of our manufacturing facilities across each of the segments. The results and improvements from these investments are shared among the segments. This exchange of ideas drives faster innovation for new products, processes, and product improvements.
Previous wording
We believe that our operating structure allows us to better evaluate market conditions and opportunities and more effectively allocate capital and resources to the appropriate segments and business units. Also, we believe our diversification and manner in which we operate our business provide an inherent hedge against the business cycles our end markets experience and over which we have limited control. Accordingly, we have the ability to provide more stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact that more volatile lumber market conditions have on traditional lumber companies. We are headquartered in Grand Rapids, Michigan.
Current wording
Importantly, our structure allows us to evaluate market conditions and opportunities, while effectively allocating capital and resources to the appropriate segments and business units. We believe that the diversification and manner in which we operate our business segments provides an inherent hedge against the inevitable business cycles that our markets experience and over which we have little control. Accordingly, our goal is to provide stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact of volatile lumber market conditions experienced by traditional lumber companies.
Previous wording
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; changes in tariffs, import/export regulations, and other trade policies; concentration of sales to customers; the success of vertical integration strategies; excess capacity or supply chain challenges; our ability to make successful business acquisitions; government regulations, particularly involving environmental and safety regulations; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
Current wording
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; changes in tariffs, import/export regulations, and other trade policies; concentration of sales to customers; the success of vertical integration strategies; excess capacity or supply chain challenges; our ability to make successful business acquisitions; government regulations, particularly involving environmental and safety regulations; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; artificial intelligence; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
Previous wording
Our results for the third quarter of 2025 include the following highlights:
Current wording
Our results for the first quarter of 2026 include the following highlights:
Previous wording
In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise almost two-thirds of our total lumber purchases.
Current wording
In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 73% of our total lumber purchases.
Previous wording
We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 41.4% and 38.6% of our sales in the first nine months of 2025 and 2024, respectively.
Current wording
We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 43.3% and 43.8% of our sales in the first three months of 2026 and 2025, respectively.
Previous wording
The proposed tariffs in Canada continue to be paused. If they are activated, the demand for domestic lumber products may increase, which will likely result in higher costs if capacity gets challenged. Although the trade landscape continues to evolve, since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of September 27, 2025, 77% of our lumber purchases are from domestic suppliers and 16% are imported from Canada, and 7% are imported from other international suppliers.
Current wording
The trade landscape continues to evolve. Since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of March 28, 2026, 82% of our lumber purchases are from domestic suppliers, 10% are imported from Canada, and 8% are imported from other international suppliers.
Previous wording
We completed two business acquisitions in fiscal 2025 and one in fiscal 2024. The annual historical sales attributable to these acquisitions are approximately $49 million. These business combinations are not significant to our quarterly results and thus proforma results for 2025 and 2024 are not presented.
Current wording
We did not complete any business combinations in the first quarter of 2026 and completed two in fiscal 2025. The annual historical sales attributable to these acquisitions are approximately $24 million in aggregate. These business combinations are not significant to our quarterly results and thus proforma results for 2026 and 2025 are not presented.
Previous wording
The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of competitive pricing and higher material costs for most of the year, which has reduced our gross profits.
Current wording
The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of weak consumer demand and selling at lower prices, which has reduced our gross profits.
Previous wording
Our business segments consist of UFP Retail Solutions (“Retail”), UFP Packaging (“Packaging”) and UFP Construction (“Construction”), and align with the end markets we serve. Among other advantages, this structure allows for a more specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in the “All Other” column of the table below. The “Corporate” column includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns, leases, and operates transportation equipment, are also included in the Corporate column. Inter-company lease and services charges are assessed to our operating segments for the use of these assets and services at fair market value rates.
Current wording
Our business segments consist of Retail, Packaging and Construction, and align with the end markets we serve. Among other advantages, this structure allows for a specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in the “All Other” column of the table below. The “Corporate” column includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates.
Previous wording
Our overall unit sales of value-added products were down 6% in the third quarter and 3% in the first nine months of 2025 compared to the prior year. Our overall unit sales of commodity-based products decreased approximately 5% in the third quarter and 4% in the first nine months of 2025 compared to the prior year.
Current wording
Our overall unit sales of value-added products were down 6% in the first quarter of 2026 compared to the prior year. Our overall unit sales of commodity-based products decreased approximately 12% in the first quarter of 2026 compared to the prior year.
Previous wording
Gross profits decreased by $13 million, or 14% to $80 million for the third quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:
Current wording
Gross profits decreased by $1 million, or 1% to $81 million for the first quarter of 2026 compared to the same period last year. The change in gross profit was attributable to the following:
Previous wording
SG&A decreased by $5 million, or 9%, in the third quarter of 2025 compared to the same period of 2024. Accrued bonus expense, which varies with overall profitability and return on investment of the segment, decreased $4 million from the third quarter of 2024 and totaled $8 million for the quarter. This decrease, along with a decrease in wages and benefits of $2 million and many other small decreases totaling $6 million, was partially offset by an increase in advertising of $7 million related to our efforts to build brand awareness of our Deckorators Surestone decking.
Current wording
SG&A increased by $1 million, or 1%, in the first quarter of 2026 compared to the same period of 2025 primarily due to an increase in advertising costs related to our efforts to build brand awareness of our Deckorators Surestone™ decking. Accrued bonus expense, which varies primarily with the overall profitability and return on investment of the segment, remained flat from the first quarter of 2025 and totaled $9 million for the quarter.
Previous wording
Net sales in the third quarter of 2025 decreased 2% compared to the same period of 2024, due to a 3% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 5% decrease in Structural Packaging and 4% in PalletOne, partially offset by a 15% increase in Protective Packaging due to geographic expansion and market share gains.
Current wording
Net sales in the first quarter of 2026 decreased 4% compared to the same period of 2025, due to a 3% decrease in organic unit sales, and a 2% decrease in pricing, partially offset by an acquired business by PalletOne that contributed 1% to unit growth. Organic unit changes consist of an 11% decrease in PalletOne, partially offset by a 5% increase in Protective Packaging, while Structural Packaging remained flat.
Previous wording
Gross profits decreased by $4 million, or 5%, for the third quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:
Current wording
Gross profits decreased by $9 million, or 13%, for the first quarter of 2026 compared to the same period last year. The change in gross profit was attributable to the following:
Previous wording
Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $7 million, or 9%, due to the factors discussed above, partially offset by an increase in the net gain on disposition and impairment of assets, which comprised of a gain on the sale of machinery and equipment totaling $5 million in 2025 compared to a $1 million loss in 2024.
Current wording
Earnings from operations decreased in the first quarter of 2026 compared to 2025 by $7 million, or 30%, due to the factors discussed above.
Previous wording
Net sales in the third quarter of 2025 decreased 7% compared to the same period of 2024 due to a 5% decrease in selling prices, due to competitive price pressure in our site-built business unit, and a 2% decrease in unit sales. We experienced a unit sales decrease in site-built of 15% due to weaker demand for housing, which was partially offset by increases of 4% in factory-built, 13% in commercial construction, and 12% in concrete forming. Our growth in factory-built is primarily due to an increase in industry production. As of September 27, 2025 and September 28, 2024, we estimate that our backlog of orders in our site-built housing business unit were $53 million and $80 million, respectively.
Current wording
Net sales in the first quarter of 2026 decreased 10% compared to the same period of 2025 due to a 5% decrease in selling prices resulting from competitive price pressure in our Site-Built business unit, and a 5% decrease in unit sales. We experienced a unit sales decrease in Site-Built of 14%, due to weaker demand for housing, and a unit sales decrease of 7% in Factory Built, primarily due to lost market of certain low margin commodity products. These decreases were partially offset by 14% unit growth in Concrete Forming and 15% unit growth in Commercial. As of March 28, 2026 and March 29, 2025, we estimate that our backlog of orders in our site-built housing business unit were $80 million and $65 million, respectively.
Previous wording
Gross profits decreased by $21 million, or 18%, in the third quarter of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:
Current wording
Gross profits decreased by $13 million, or 15%, in the first quarter of 2026 compared to the same period of 2025. The change in our gross profit was comprised of the following:
Previous wording
The corporate segment consists of over (under) allocated costs that are not significant.
Current wording
The corporate segment consists of over (under) allocated costs that are not significant and net sales to external customers initiated by UFP Purchasing, UFP Transportation, and UFP Real Estate. In 2026, we modified our cost allocation methods to more closely approximate actual.
Previous wording
Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.8% in the third quarter of 2025 compared to 24.2% in the same period of 2024 and was 22.9% in the first nine months of 2025 compared to 22.3% for the same period in 2024. The decrease in our effective tax rate for the third quarter was primarily due to an increase in our tax deduction from stock-based compensation accounted for as a permanent difference. The increase in our effective tax rate for the first nine months of 2025 was primarily due to an increase in foreign subsidiary income taxed in the US and a decrease in our tax deduction from stock-based compensation for the year. A significant amount of stock-based compensation vested in the first quarter of 2024, which decreased the prior year effective tax rate in comparison to 2025.
Current wording
Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.7% in the first quarter of 2026 compared to 21.1% in the same period of 2025. The increase in our effective tax rate for the first quarter was primarily due to a decrease in our tax deduction from stock-based compensation accounted for as a permanent difference.
Previous wording
Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 64 days from 59 days during the third quarter of 2025 and increased to 61 days from 59 days during the first nine months of 2025 compared to the same periods of the prior year.
Current wording
Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 68 days from 62 days during the first quarter of 2026 compared to the same period of the prior year.
Previous wording
The increase in our days supply of inventory for the quarter and first nine months of 2025 is due to slower inventory turns in our Retail and Packaging segments primarily due to an increase in safety stock as we planned for supply chain disruption in certain items resulting from tariffs. Our days of sales outstanding remained flat compared to the prior year. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 94% and 93% at the end of the third quarter of 2025 and 2024, respectively.
Current wording
The increase in our days supply of inventory for the first quarter of 2026 is due to slower inventory turns in our Retail segment due to an increase in safety stock and as we work to normalize inventory as a result of weaker than anticipated demand in the first quarter of 2026. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 95% and 94% at the end of the first quarter of 2026 and 2025, respectively.
Previous wording
In the first nine months of 2025, our cash flows from operations were $399 million and were comprised of net earnings of $256 million and $148 million of non-cash expenses, offset by a $5 million increase in working capital since the end of December 2024 due to seasonal demand. Our cash flows from operations decreased by $99 million compared to the same period of last year primarily due to the decline in our net earnings as well as the increase in our investment in net working capital since year end, which was $19 million higher in 2025 compared to 2024. We anticipate the seasonal increase in net working capital in 2025 will be converted to cash by the end of the year.
Current wording
In the first three months of 2026, our cash flows used in operations were $104 million and were comprised of net earnings of $51 million and $48 million of non-cash expenses, offset by a $203 million increase in working capital since the end of December 2025 due to seasonal demand. Our cash flows used in operations decreased by $5 million compared to the same period of the prior year primarily due to the increase in our investment in net working capital since year end, which was $36 million lower in 2026 compared to 2025, partially offset by a $31 million decline in our net earnings and non-cash expenses. We anticipate the seasonal increase in net working capital in 2026 will be converted to cash by early in the fourth quarter.
Previous wording
Purchases of property, plant, and equipment of $206 million comprised most of our cash used in investing activities during the first nine months of 2025. Outstanding purchase commitments on existing capital projects totaled approximately $109 million on September 27, 2025. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and our Site-Built and Deckorators business units, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year. Cash used for acquisitions during the first nine months of 2025 amounted to $18 million (refer to footnote F to our condensed consolidated financial statements).
Current wording
Purchases of property, plant, and equipment of $48 million comprised most of our cash used in investing activities during the first three months of 2026. Outstanding purchase commitments on existing capital projects totaled approximately $108 million on March 28, 2026. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and our Deckorators business unit, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year.
Previous wording
Cash flows used in financing activities during the first nine months of 2025 primarily consisted of the following:
Current wording
Cash flows used in financing activities during the first three months of 2026 primarily consisted of the following:
Previous wording
At the end of the third quarter of 2025, we had approximately $2.3 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.
Current wording
At the end of the first quarter of 2026, we had approximately $2.0 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.
Previous wording
See Notes to Unaudited Consolidated Condensed Financial Statements, Note E, “Commitments, Contingencies, and Guarantees.”
Current wording
See Notes to Unaudited Interim Condensed Consolidated Financial Statements, Note E, “Commitments, Contingencies, and Guarantees.”
Previous wording
We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans for reducing costs, eliminating excess capacity, divesting under-performing assets, and exiting business that does not meet our profitability targets. Our goal through these actions is to lower our cost structure and improve our operating profits by $60 million by year-end 2026. We anticipate benefits of approximately $44 million by the end of 2025, including $14 million from planned capacity reductions and approximately $30 million from planned SG&A cost reductions. The planned decreases will be partially offset by an anticipated $20 million increase in advertising costs in our Deckorators business unit to build our Surestone brand. In 2026, we believe the closure of our Bonner, MT facilities and shift of production to other facilities will increase our operating profits by approximately $16 million.
Current wording
We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of macro-economic and geopolitical factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans to reduce or eliminate capacity at locations that are not meeting our profitability targets and reduce our SG&A costs. At the beginning of 2025, we announced that our goal through these actions was to improve our operating profits by $60 million by the end of 2026. We are on track to deliver the remaining $25 million or more from this cost out program by year end. Additionally, we anticipate:
Previous wording
The following factors should be considered when evaluating our future prospects:
Current wording
The following factors should be considered when evaluating our future sales and gross profits:
Previous wording
We believe the strength of our cash flow generation and conservative capital structure provide us with sufficient resources to grow our business and also fund returns to our shareholders. We plan to continue to pursue a balanced and return-driven approach to capital allocation across dividends, share buybacks, capital investments and acquisitions. Specifically:
Current wording
We believe the strength of our cash flow generation and conservative capital structure provide us with sufficient resources to grow our business and also fund returns to our shareholders. We plan to continue to pursue a balanced and return-driven approach to capital allocation across dividends, share buybacks, capital investments and acquisitions.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Finally, a Spruce Pine Fir (“SPF”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 12% of our total lumber purchases.