UFP Industries Q4 Earnings Miss, Sales Surpass Estimates

Core Viewpoint - UFP Industries, Inc. reported mixed fourth-quarter 2024 results, with earnings missing estimates while revenues exceeded expectations, both metrics showing year-over-year declines [1][3]. Financial Performance - Earnings per share were $1.20, missing the Zacks Consensus Estimate of $1.23 by 2.4% and declining 25.9% year over year [3]. - Net sales reached $1.46 billion, surpassing the consensus mark of $1.44 billion but down 4.1% from the previous year, primarily due to a 4% decrease in selling prices [3]. Segment Performance - UFP Retail Solutions: Reported net sales of $525 million, flat year over year, with organic unit sales growing 1% offset by a 1% decline from product transfers to the Packaging segment [4]. - UFP Packaging: Net sales totaled $375 million, down 9% year over year, with an 8% decline in selling prices and a 2% drop in organic unit sales [5]. - UFP Construction: Net sales were $487 million, a 5% decline from the previous year, driven by a 7% decrease in selling prices, although organic unit sales increased by 2% [6]. Profitability Metrics - Adjusted EBITDA margin rose 180 basis points to 8.4% in the Retail segment, while it contracted 280 basis points to 10% in the Packaging segment and 360 basis points to 9.2% in the Construction segment [5][7]. - Overall adjusted EBITDA was $132.7 million, down from $165.6 million year over year, with the adjusted EBITDA margin contracting 180 basis points to 9.1% [8]. Balance Sheet and Cash Flow - As of December 28, 2024, the company had nearly $2.5 billion in liquidity, with cash and cash equivalents at $1.17 billion, an increase from $1.1 billion at the end of 2023 [10]. - Long-term debt decreased to $229.8 million from $233.5 million at the end of 2023, while net cash from operating activities was $642.6 million, down from $959.9 million in the prior year [10]. Dividend Announcement - On February 13, 2025, the board approved a quarterly dividend payment of 35 cents per share, a 6% increase from the previous dividend of 33 cents, payable on March 17 [11]. Market Outlook - The company anticipates continued economic challenges in 2025, with subdued demand expected in the first half across Retail, Packaging, and Construction segments [12][13]. - Despite near-term challenges, UFP aims for annual unit sales growth of 7-10% and targets EBITDA margins of 12.5% in the long term [14].