BLDR · Builders FirstSource, Inc.

Builders FirstSource reported a challenging first quarter, with net sales declining 10.1% to $3.3 billion, driven by a lower housing starts environment. Core organic net sales fell 8.3%, with single-family down 11.1%, while commodity deflation contributed 3.3% to the decline, partially offset by 1.5% growth from acquisitions. Gross profit decreased 16.7% to $0.9 billion, and gross margin contracted 220 basis points to 28.3%, reflecting the impact of lower volumes and reduced operating leverage. SG&A expenses declined 2.0% to $912.5 million, but as a percentage of sales increased 240 basis points to 27.8% due to deleveraging. Net interest expense rose $9.5 million to $74.4 million on higher average debt balances. The company recorded a net loss of $47.4 million, or $(0.43) per diluted share, compared to net income of $96.3 million, or $0.84 per share, in the prior year. Adjusted EBITDA fell 42.1% to $213.8 million, with margin down 360 basis points to 6.5%. Management highlighted disciplined execution and cost management, with CEO Peter Jackson noting the company's adaptability and focus on strategic share growth. CFO Pete Beckmann emphasized strong cash flow generation and a balanced approach to capital allocation. The company generated $87.5 million in operating cash flow and $42.7 million in free cash flow. As of March 31, 2026, liquidity stood at $1.5 billion, and net debt to LTM adjusted EBITDA was 3.2x. The board authorized a new $500 million share repurchase program, including approximately $200 million remaining from the prior authorization. For full year 2026, the company guided net sales of $14.6-$15.6 billion, gross margin of 27.5%-29%, adjusted EBITDA of $1.1-$1.5 billion, and free cash flow of $0.4-$0.5 billion, assuming average commodity prices of $390-$410 per mbf.