Builders FirstSource, Inc. BLDR is slated to report second-quarter 2026 results on July 30, before market open.
In the last reported quarter, the company’s adjusted earnings per share (EPS) missed the Zacks Consensus Estimate by 30.8%, while net sales beat the same by 4.5%. On a year-over-year basis, both top and bottom lines tumbled 10.1% and 82.1%, respectively.
BLDR’s earnings topped the consensus mark in two of the trailing four quarters and missed on two occasions, the average surprise being negative 8%.
Trend in Estimate Revision of BLDR
The Zacks Consensus Estimate for Builders FirstSource’s second-quarter EPS has moved south to $1.29 from $1.32 in the past 30 days. The estimated figure indicates a 45.8% year-over-year decline from EPS of $2.38 reported in the year-ago quarter.
Builders FirstSource, Inc. Price and EPS Surprise
Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote
The consensus estimate for net sales is pegged at $3.91 billion, indicating a decline of 7.6% from $4.23 billion reported in the year-ago quarter.
Factors Likely to Shape Builders FirstSource’s Q2 Results
Net Sales
Builders FirstSource's second-quarter revenues are likely to remain under pressure as elevated mortgage rates, affordability constraints and cautious consumer sentiment continue to weigh on residential construction activity. Single-family revenues may remain soft as lower starts and the ongoing shift toward smaller, less complex homes reduce sales dollars per start. Multifamily activity is also expected to stay muted, with management not anticipating a meaningful improvement before 2027.
Value-added products, which comprised 48.3% of first-quarter sales, likely remained pressured by weak single-family construction and lower structural content per home. Specialty products, representing 26% of sales, may have provided some support, though pricing pressure and volatility likely persisted. Lumber and sheet goods, at 25.7% of sales, likely benefited from bundling and share gains, but lower margins and commodity-price movements may have limited the revenue contribution.
Despite these industry headwinds, the company continues to benefit from its broad product portfolio, bundled offerings and expanding value-added solutions. Acquisitions are expected to provide incremental revenue support. Since the BMC merger, Builders FirstSource has completed 41 acquisitions representing more than $2.3 billion in annual sales, while the Premium Building Components deal expanded its manufactured products presence into New York. Digital initiatives may also support growth, with the company preparing to launch its next generation of AI-enabled solutions later this year to strengthen customer engagement and capture additional market share.
Margins
Margins are likely to remain under pressure in the second quarter despite ongoing cost-control efforts. Competitive pricing, an unfavorable product mix with higher lumber and sheet goods sales, and elevated fuel and input costs are expected to weigh on profitability. While BLDR's $100 million cost-reduction program should provide some relief, weak housing demand, affordability challenges and pricing pressure are likely to keep second-quarter margins constrained.
What the Zacks Model Predicts for BLDR
Our proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.
BLDR’s Earnings ESP: BLDR has an Earnings ESP of -8.74%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank of BLDR: The company currently carries a Zacks Rank of #4 (Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Retail-Wholesale sector, which, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
BJ's Restaurants, Inc. BJRI currently has an Earnings ESP of +7.51% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the to-be-reported quarter, BJRI's earnings are expected to decline 10.3%. BJRI's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 136%.
CAVA Group, Inc. CAVA currently has an Earnings ESP of +20.30% and a Zacks Rank of 3.
In the to-be-reported quarter, CAVA’s earnings are expected to increase 6.3%. CAVA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 16.6%.
The Cheesecake Factory Incorporated CAKE currently has an Earnings ESP of +2.76% and a Zacks Rank of 3.
In the to-be-reported quarter, Cheesecake Factory’s earnings are expected to register a 0.9% year-over-year rise. Cheesecake Factory’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 6.7%.
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Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report
BJ's Restaurants, Inc. (BJRI): Free Stock Analysis Report
The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis Report
CAVA Group, Inc. (CAVA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).