UFP Industries’ Earnings Per Share Fall to $1.05 as Freight and Lumber Costs Weigh

Key Facts

UFP Industries reported diluted earnings per share of $1.05 in the third quarter of 2026, down from $1.29 in the same period a year earlier, as higher freight and lumber costs weighed on earnings. The company said freight costs, net of fuel surcharges, increased $19 million, equal to 1.3% of net sales compared with the third quarter of 2025. It said higher freight and material costs limited the impact of increased volumes and an improved earnings mix. Meanwhile, sales growth came from organic unit growth, higher selling prices and contributions from acquisitions. The company left its full-year outlook unchanged, although it expects a slight decline in industrial unit demand in each segment during 2026.

Organic units increased 4%, while acquisitions added 2% to sales growth, and selling prices rose 5% during the quarter. The organic unit increase excludes the effect of acquisitions completed in the previous twelve months, distinguishing internal growth from expansion through company purchases. But improved volumes and pricing did not prevent earnings per share from falling year over year amid higher freight and lumber expenses. The chief executive said freight and material costs limited the impact of increased volumes and an improved earnings mix. The company thus faced a quarterly contrast: sales expanded through several sources, while pressure weighed on what reached shareholders per share.

Freight costs net of fuel surcharges rose $19 million year over year, equivalent to 1.3% of sales. The company attributed the pressure to higher shipping and lumber costs, and linked the increase in freight costs to tight capacity among carriers and higher fuel prices. Calculating freight after fuel surcharges means the reported increase reflects the cost that remained with the company after those charges. The figures in its statement did not specify the amount of the increase in lumber costs separately. At the same time, management said it expects to meet or exceed its initial cost-reduction target by year-end, which it set at $60 million.

New products’ share of total sales rose to 8.7% in the third quarter, compared with 6.8% a year earlier. The measure shows the contribution of recently launched products to the sales mix, alongside unit growth, pricing and acquisition contributions. On liquidity, cash flow from operating activities totaled $235 million in the first nine months of 2026. The company said about $100 million in cash was used for seasonal working capital requirements during the period, and that it expects this to convert to cash in the fourth quarter. The company ended the quarter with nearly $2 billion in liquidity and no borrowings outstanding under its revolving credit facility.

As part of its expansion, the company announced on October 26 an agreement to acquire the assets of Apache Products, a manufacturer of wooden material-handling pallets, for about $27 million in cash, with the deal targeted to close in November 2026. The announcement follows acquisitions’ 2% contribution to sales growth during the quarter, according to the company’s breakdown of growth sources. The board also announced a quarterly cash dividend of $0.36 per share on October 21. The dividend is payable on December 15, 2026, to shareholders of record on December 1. The company’s stock closed at $79.92 on October 27, according to EL7 data.

UFP expects a continued slight decline in industrial unit demand during 2026 in each segment, and also pointed to continued challenges in demand tied to new residential construction. It said its annual outlook was unchanged as it seeks to meet or exceed its initial cost-reduction target by year-end. The conversion to cash in the fourth quarter of about $100 million invested in seasonal working capital is also part of the company’s expectations. It is also targeting completion of the acquisition of Apache Products’ assets in November. These upcoming milestones show how the company is balancing expected soft demand, cost reductions, investment in assets and cash dividends.