It has been about a month since the last earnings report for UFP Industries (UFPI). Shares have lost about 8.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is UFP Industries due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for UFP Industries, Inc. before we dive into how investors and analysts have reacted as of late.
UFP Industries Q1 Earnings & Sales Miss Estimates, Both Down Y/Y
UFP Industries reported weaker-than-expected first-quarter 2026 results, with adjusted earnings and net sales missing the Zacks Consensus Estimate and also declining year over year.
Earnings & Sales Performance in Q1
Adjusted EPS of 89 cents missed the Zacks Consensus Estimate of $1.15 by 22.6%. In the year-ago quarter, it had reported adjusted EPS of $1.30.
Quarterly net sales of $1.46 billion missed the consensus mark of $1.54 billion by 4.8% and declined 8.4% year over year from $1.60 billion. Lower organic unit sales, adverse weather conditions and weaker residential construction demand hurt quarterly performance.
UFPI’s Margins & Profitability
Gross profit totaled $235.9 million, down from $268.2 million in the year-ago quarter, with gross margin contracting to 16.1% from 16.8% a year earlier. Higher healthcare and fuel costs, along with lower fixed-cost absorption, weighed on profitability during the quarter.
Adjusted EBITDA came in at $111.4 million, down from $142.2 million. Adjusted EBITDA margin contracted to 7.6% from 8.9% year over year. Net earnings attributable to controlling interest declined to $50.8 million from $78.8 million in the year-ago quarter.
Q1 Segment Highlights
UFP Retail: Net sales of $531.2 million, down 12.5% from last year. Segment adjusted EBITDA declined 2.8% to $34.8 million year over year. ProWood organic unit sales declined 15% due to unfavorable winter weather, weaker consumer sentiment and lower storm-related demand.
Deckorators organic unit sales increased 2% year over year. Surestone decking sales climbed 27%, while traditional wood plastic composite decking sales increased 4% from the prior-year quarter. UFP Edge organic unit sales declined 20% due to facility closures and portfolio rationalization efforts.
UFP Packaging: Sales declined 3.9% to $394.1 million due to weaker industrial demand and lower selling prices. Adjusted EBITDA contracted 20.7% to $27.8 million compared with the year-ago quarter. Structural Packaging organic unit sales remained flat, while PalletOne organic unit sales declined 11%.
Protective Packaging organic unit sales increased 5% year over year, aided by contributions from the Jeffersonville, IN, facility that became fully operational in third-quarter 2025.
UFP Construction: Net sales of $465.5 million, down 9.8% year over year due to housing affordability challenges, economic uncertainty and unfavorable weather conditions. Adjusted EBITDA tumbled 31.2% year over year to $25.7 million.
Site Built organic unit sales declined 14% during the quarter. Factory Built organic unit sales fell 8% due to the loss of low-margin commodity sales. Meanwhile, Concrete Forming Solutions’ organic unit sales grew 14% and Commercial’s organic sales rose 15% year over year.
Balance Sheet & Liquidity
Cash and cash equivalents were $714.5 million as of first-quarter 2026-end, down from $914.2 million at 2025-end. The current liquidity level remains strong, with total liquidity of nearly $2 billion, including $1.3 billion available under its revolving credit facility and shelf agreement.
The long-term debt and finance lease obligations were $228.3 million as of first-quarter 2026-end compared with $229.8 million at 2025-end. During the quarter, the company repurchased 334,541 shares for nearly $30 million at an average share price of $89.76.
UFPI’s 2026 Outlook & Long-Term Targets
Management expects the challenging market environment to continue in 2026, with overall demand likely trending toward the lower end of prior guidance for flat to slightly down unit expectations across segments. Residential construction-related markets are expected to remain weak, while other end markets may stabilize gradually.
The company expects market share gains, execution of its cost-out initiatives and growth in its Deckorators and Surestone businesses to support performance. UFP Industries reiterated its long-term targets of achieving 7-10% annual unit sales growth, generating at least 10% of total sales from new products and maintaining adjusted EBITDA margins of 12.5%.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -7.3% due to these changes.
VGM Scores
At this time, UFP Industries has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise UFP Industries has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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UFP Industries, Inc. (UFPI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).