Builders FirstSource, Inc. (BLDR) Earnings

Builders FirstSource, Inc.

BLDR · NYSE

Symbol: BLDR
Type: Stock
Sector: Consumer Discretionary
Industry: RETAIL: Building Materials
Country: North America
Exchange: NYSE

Builders FirstSource (NYSE: BLDR), headquartered in Irving, Texas, is a leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. With approximately 575 locations across 43 states, we serve 48 of the top 50 and 91 of the top 100 Core Based Statistical Areas (CBSAs), ensuring broad geographic coverage and enhancing our ability to partner with our customers. Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that we design and cut specifically for each home. We also assemble interior and exterior doors into pre-hung units for easy installation.

Key Issues

Bullish view

Management said Q3 results met expectations despite continued single-family softness, with cost actions and productivity measures supporting performance.

Bearish view

Lower housing starts and related headwinds contributed to a 2.2% year-over-year sales decline, while gross profit fell 10.6%.

Analyst Consensus

See all

Hold

17 analysts

0 Bearish3 Neutral1 Bullish

$67

Current

$58

Low

$68

Average

$75

High

Average target implies +2.19% versus the current price.

Earnings History

BeatMissNo estimate

Dec 2026upcoming

Next quarter

Expected to report Feb 16, 2027 — estimated from last year’s reporting date.

Consensus is $0.43 EPS for Dec 2026 across 6 estimates, ranging $0.21 to $0.64.

BLDR Sep 2026

Reported Oct 29, 2026

: 34.82%
: +2.93%

: $1.12
: $1.51
: —
: $3.85B

Reported results

: $3.85B; from $3.94B
: 27.82%; from 30.43%
: $99.09M; from $228.77M
: 2.57%; from 5.80%
: $60.41M; from $122.38M
: $0.56; from $1.10

Highlights

Adjusted EPS beat: Adjusted diluted EPS was $1.51, 34.8% above the $1.12 consensus, though down 24.5% from $2.00 a year ago. GAAP diluted EPS was $0.56.
Sales softened: Revenue fell 2.2% year over year to $3.85 billion, with core organic sales down 3.9%; acquisitions added 1.8% and commodity deflation reduced sales by 0.1%.
Margins drove the decline: Gross margin contracted 260 basis points to 27.8%, and adjusted EBITDA fell 28.3% to $311.1 million, with its margin down 290 basis points to 8.1%.
GAAP earnings were tax-assisted: Net income was $60.4 million versus $122.4 million a year ago; a $33.6 million income tax benefit compared with $37.1 million of tax expense offset some of the operating decline.
Cash generation weakened: Free cash flow was $76.0 million versus $464.9 million a year ago, as lower net income and higher working capital weighed on cash flow.
Full-year midpoint maintained: Builders FirstSource narrowed its 2026 outlook while holding the midpoints: sales of $14.2–$14.6 billion, adjusted EBITDA of $1.075–$1.125 billion and free cash flow of $400–$450 million.
Leverage increased: Net debt was $4.6 billion, or 4.1x LTM adjusted EBITDA, versus 2.3x a year earlier; liquidity was $1.5 billion.

Analysis

Builders FirstSource delivered adjusted diluted EPS of $1.51, beating the $1.12 consensus by 34.8%, but the underlying quarter was weaker than a year ago. Revenue declined 2.2% to $3.85 billion, gross margin fell 260 basis points to 27.8%, and adjusted EBITDA dropped 28.3% to $311.1 million. Adjusted EPS was down from $2.00 a year ago. GAAP diluted EPS was $0.56 versus $1.10, with a $33.6 million tax benefit—compared with tax expense of $37.1 million last year—partly cushioning lower operating income. Sequentially, revenue was essentially flat with Q2’s $3.86 billion, while operating income declined from $128.5 million to $99.1 million; net income improved from a $3.9 million loss, reflecting the current-quarter tax benefit.

The defining pressure was housing-related weakness and margin compression: core organic sales fell 3.9%, led by a 6.2% decline in single-family, while gross profit fell 10.6%. Cash conversion also deteriorated, with free cash flow of $76.0 million versus $464.9 million a year ago. Management said results met expectations and narrowed full-year guidance while maintaining its midpoints: $14.2–$14.6 billion of sales and $1.075–$1.125 billion of adjusted EBITDA. It expects $400–$450 million of free cash flow for 2026.

Sales and housing demand

Net sales were $3.854 billion, down 2.2% year over year. Core organic sales declined 3.9%, primarily reflecting a lower housing-starts environment; acquisitions contributed 1.8% growth and commodity deflation reduced sales by 0.1%. Industry U.S. housing starts were down 4.2% year over year in the quarter, while single-family starts were down 1.6%.

By end market: Core organic single-family sales fell 6.2%; multi-family rose 2.0% and repair and remodel/other rose 0.3%.
By product category: Value-added products declined 5.2% to $1.783 billion, including a 7.3% fall in windows, doors and millwork. Specialty building products and services fell 3.4% to $1.034 billion, while lumber and lumber sheet goods rose 4.7% to $1.037 billion.

Margin and earnings pressure

Gross profit declined 10.6% to approximately $1.072 billion as gross margin compressed to 27.8% from 30.4%. Adjusted EBITDA fell to $311.1 million from $433.7 million, and adjusted EBITDA margin narrowed to 8.1% from 11.0%. Lower gross profit was the principal drag; reduced operating leverage compounded the margin pressure as SG&A was nearly unchanged in dollars but rose to 25.3% of sales from 24.6%.

GAAP results: Operating income was $99.1 million versus $228.8 million a year earlier; net income was $60.4 million versus $122.4 million, or $0.56 diluted EPS versus $1.10.
Adjusted results: Adjusted net income was $162.2 million, down 26.9%, and adjusted diluted EPS was $1.51 versus $2.00. The adjusted EPS figure exceeded the $1.12 consensus supplied for the quarter.
Tax effect: The $33.6 million income tax benefit reflected losses before tax at certain subsidiaries and lower consolidated pretax income; it softened the GAAP earnings decline.

2026 outlook

Management narrowed its full-year outlook based on year-to-date performance but maintained the midpoint of its net sales and adjusted EBITDA ranges. The outlook assumes continued pressure in housing and R&R, with acquisitions completed in the prior twelve months expected to contribute 1.5%–2.0% sales growth.

Net sales: $14.2–$14.6 billion; gross margin of 27.5%–28.5%.
Adjusted EBITDA: $1.075–$1.125 billion, with adjusted EBITDA margin of 7.4%–7.9%.
Free cash flow: Approximately $400–$450 million, assuming average commodity prices of $390–$410 per thousand board feet.
Market assumptions: Single-family starts down mid- to high-single digits, multi-family starts down mid-single digits and R&R activity down 1% for 2026.

Cash and leverage

Operating cash flow was $146.6 million, down from $547.7 million a year earlier, and free cash flow fell to $76.0 million from $464.9 million. The company attributed the decline mainly to lower net income and higher working capital, partly offset by lower capital expenditures. In the first nine months, operating cash flow totaled $302.0 million versus $1.021 billion a year earlier; receivables and inventory uses of cash were significant.

Liquidity: $1.5 billion at September 30, comprising approximately $1.4 billion of net revolver availability and $55 million of cash.
Debt: Net debt was $4.6 billion and net debt to LTM adjusted EBITDA was 4.1x, compared with 2.3x a year earlier.
Capital returns: The company had $500 million remaining under its repurchase authorization. It repurchased no shares under the program in Q3; nine-month repurchases were 3.3 million shares for $302.9 million.

Cost actions and investment

The company reported approximately $23 million of productivity savings in Q3 and $57 million year to date, against a 2026 target of $60–$70 million. Cost actions helped restrain SG&A, but did not prevent its share of sales from increasing as revenue and gross margin fell. The quarter also continued investment in value-added offerings and technology: the company invested as lead investor in Digs’ $25.3 million Series A and entered a five-year commercial agreement intended to expand its homebuilding technology collaboration.