UFP Industries Q3 Sales Rise, but Adjusted EBITDA Falls 15%

UFP Industries reported higher fiscal third-quarter sales as unit volumes increased, but adjusted EBITDA and margins declined amid adverse market conditions, pricing pressure and freight challenges. For the quarter ended September 26, 2026, net sales reached $1.73 billion, up about 11% from $1.56 billion a year earlier, while adjusted EBITDA fell 15% to $119 million.

The adjusted EBITDA margin contracted to 6.9% from 9.0% in the prior-year quarter. Total unit sales increased 4% year over year, including 6% organic unit growth, indicating that revenue grew faster than overall shipment volume. The company said short-term results were affected by difficult market conditions and freight-related challenges.

On a trailing-12-month basis, UFP generated $6.41 billion in net sales and $492 million in adjusted EBITDA, for a 7.7% adjusted EBITDA margin. That compares with $6.32 billion in sales, $564 million in adjusted EBITDA and an 8.9% margin for 2025. Trailing-12-month return on invested capital was 9.6%, down from 13.2% in 2025, while free cash flow was $410 million compared with $451 million.

Segment performance

UFP Retail Solutions posted third-quarter sales of $635 million, up about 7% from $594 million a year earlier. Total unit sales were unchanged, while organic unit sales increased 1%. Adjusted EBITDA declined to $34 million from $40 million, and the segment’s margin narrowed to 5.4% from 6.7%.

UFP Packaging recorded the strongest sales growth among the three main segments. Revenue rose about 18% to $466 million, supported by a 9% increase in total unit sales and 15% organic unit growth. Despite the higher sales and volumes, adjusted EBITDA decreased to $27 million from $34 million, reducing the margin to 5.8% from 8.7%.

UFP Construction generated $552 million in sales, matching the prior-year quarter. Total and organic unit sales both increased 4%. Adjusted EBITDA declined to $38 million from $42 million, while the segment margin fell to 6.8% from 7.5%.

The performance left all three segments with lower year-over-year adjusted EBITDA despite stable or higher sales. UFP’s trailing-12-month business mix included $2.43 billion of Retail Solutions sales, $1.69 billion from Packaging and $1.99 billion from Construction.

Demand outlook and investment priorities

UFP indicated that near-term demand is expected to decline by low-single-digit percentages across its retail, packaging and construction markets, with pricing pressure affecting each segment. In retail, consumers are delaying larger repair and remodeling projects amid elevated home-equity borrowing costs and limited housing turnover. Packaging markets face lower demand across most verticals and excess capacity, while construction continues to contend with affordability constraints, mortgage rates and weak mortgage application and refinancing activity.

Management continues to target long-term unit sales growth of 7% to 10%, including small acquisitions, and a 12.5% adjusted EBITDA margin. These are long-term financial goals rather than near-term guidance. The company’s margin strategy centers on increasing value-added sales, introducing branded and alternative-material products, applying value-based pricing, and investing in automation and operational technology.

UFP plans $150 million to $175 million of capital expenditures in 2026. It is continuing to invest in greenfield capacity, product development and brand awareness, including manufacturing capacity for Deckorators and expansion of its pallet network. The company also expects acquisitions to contribute half of its total long-term annual unit-sales growth.

Trailing-12-month liquidity stood at $1.96 billion. UFP reported no net debt and reiterated its objective of maintaining a conservative capital structure, with adjusted EBITDA leverage below 1.5 times. As of October 28, 2026, the company had $198 million remaining under a share-repurchase authorization that expires April 30, 2027.

The presentation identified lumber-price fluctuations, adverse weather, weak conditions in UFP’s end markets, environmental and safety regulation, and the execution of acquisitions as key risks. Management also cautioned that current expectations depend on assumptions about the economy and the markets the company serves. Adjusted EBITDA, free cash flow, liquidity and return on invested capital are non-GAAP measures and may not be comparable with similarly named measures used by other companies.