Cuộc họp công bố kết quả kinh doanh Q3 2026 của Boise Cascade (BCC): Doanh thu tăng 8%, triển vọng Q4

Điểm tin chính

• Doanh thu hợp nhất quý 3 năm 2026 của Boise Cascade tăng 8% so với cùng kỳ năm trước lên 1,8 tỷ USD. Lợi nhuận ròng đạt 36,4 triệu USD, trong khi lợi nhuận trên mỗi cổ phiếu (EPS) pha loãng đạt 1,04 USD; cả hai chỉ số đều cao hơn so với một năm trước đó.
• Doanh thu mảng Phân phối Vật liệu Xây dựng (BMD) tăng 7% lên 1,7 tỷ USD, nhưng EBITDA mảng này giảm xuống 66,9 triệu USD từ mức 69,8 triệu USD. Chi phí nhiên liệu, chi phí giao hàng cao hơn và ảnh hưởng từ quá trình chuyển đổi nhà cung cấp đã gây áp lực lên biên lợi nhuận.
• Doanh thu mảng Sản phẩm Gỗ tăng 16% lên 461,2 triệu USD, bao gồm cả doanh thu giữa các mảng. EBITDA của mảng này tăng lên 42,7 triệu USD từ mức 14,5 triệu USD, chủ yếu nhờ giá gỗ dán cao hơn và sản lượng sản phẩm gỗ kỹ thuật (EWP) tăng.
• Ban lãnh đạo dự báo EBITDA mảng BMD quý 4 đạt từ 35 triệu đến 45 triệu USD và EBITDA mảng Sản phẩm Gỗ đạt từ 10 triệu đến 20 triệu USD, phản ánh tính mùa vụ, thị trường nhà ở gia đình đơn lẻ suy yếu, sản lượng giảm và chi phí ở mức cao.
• Boise Cascade đã giảm dự báo chi tiêu vốn năm 2026 xuống còn 120 triệu - 140 triệu USD, chủ yếu do sự chậm trễ trong các dự án tăng trưởng hữu cơ của mảng BMD, chứ không phải do cắt giảm đáng kể mức đầu tư theo kế hoạch.
• Ban lãnh đạo cho biết sự thận trọng của khách hàng và việc giảm hàng tồn kho vẫn là những yếu tố bất lợi trong ngắn hạn. Các dự báo sớm của ngành do công ty trích dẫn cho thấy số lượng nhà khởi công năm 2027 có thể giảm ở mức một chữ số tầm trung so với năm 2026.

Dữ liệu tài chính chính

Boise Cascade đã chi trả 26 triệu USD cổ tức thường niên trong 9 tháng đầu năm 2026. Hội đồng quản trị đã phê duyệt mức cổ tức hàng quý là 0,23 USD/cổ phiếu, trả vào giữa tháng 12. Trong 10 tháng đầu năm 2026, công ty đã mua lại khoảng 118 triệu USD cổ phiếu quỹ, với khoảng 120 triệu USD còn lại theo hạn mức phê duyệt tính đến cuối tháng 10.

Kết quả kinh doanh và hoạt động

Mức tăng trưởng doanh thu 7% của BMD bao gồm mức tăng 15% doanh thu hàng hóa phổ thông, tăng 4% doanh thu sản phẩm chung và tăng 1% doanh thu EWP. Lợi nhuận gộp tính theo giá trị tuyệt đối tăng 3,6 triệu USD, do biên lợi nhuận hàng hóa phổ thông tốt hơn đã bù đắp một phần cho biên lợi nhuận sản phẩm chung yếu hơn.

Chi phí bán hàng và phân phối tăng 6,9 triệu USD. Khoảng 80% mức tăng đó đến từ chi phí giao hàng chiều đi và chi phí nhiên liệu tăng cao. Ban lãnh đạo cho biết đội ngũ đã phản ánh một phần lạm phát cước vận chuyển chiều đi vào giá bán, mặc dù chi phí này vẫn khó hấp thụ hơn so với cước vận chuyển chiều về.

Quá trình chuyển đổi sang James Hardie với tư cách là nhà cung cấp độc quyền của Boise Cascade về tấm ốp tường (siding), sàn gỗ nhựa composite, viền PVC và viền xi măng sợi vẫn đang ở giai đoạn đầu. Ban lãnh đạo cho biết doanh thu tấm ốp và viền trang trí của Hardie đạt mức tăng trưởng mạnh so với cùng kỳ năm trước, trong khi công ty tiếp tục giảm hàng tồn kho sàn gỗ hiện hữu và đưa các sản phẩm TimberTech và AZEK vào hệ thống.

Khoảng 80% hàng tồn kho sàn gỗ hiện hữu đã được bán giải hạ. Ban lãnh đạo kỳ vọng quý 4 sẽ thể hiện mức doanh thu cơ sở cho mảng sàn gỗ, với đà tăng trưởng có khả năng được tích lũy trong năm 2027. Hàng tồn kho hiện hữu còn lại có thể kéo dài sang mùa lắp đặt sàn gỗ vào mùa xuân khi công ty ưu tiên các thương hiệu Hardie và TimberTech.

Ở mảng Sản phẩm Gỗ, sản lượng dầm chữ I (I-joist) và gỗ dán phủ veneer nhiều lớp (LVL) lần lượt tăng 10% và 18% so với cùng kỳ năm trước. Giá bán thực tế của cả hai sản phẩm đều đi ngang so với cùng kỳ năm trước và so với quý trước, đánh dấu quý thứ tư liên tiếp giá EWP duy trì ổn định.

Sản lượng gỗ dán giảm xuống 362 triệu feet từ mức 387 triệu feet của một năm trước đó và 368 triệu feet trong quý 2 năm 2026, phản ánh việc phân bổ nhiều veneer hơn cho sản xuất EWP. Giá gỗ dán trung bình tăng 31% so với cùng kỳ năm trước và 8% so với quý trước lên 425 USD trên mỗi nghìn feet.

Ban lãnh đạo cho rằng sự gia tăng giá gỗ dán một phần xuất phát từ những thay đổi nguồn cung liên quan đến thương mại. Nhập khẩu gỗ dán từ Brazil đã giảm 12% so với cùng kỳ năm trước tính đến hết quý 3 năm 2026, trong khi Mỹ áp thuế 50% đối với sản phẩm veneer, gỗ dán và LVL nhập khẩu từ Canada vào tháng 8.

Dự báo của Ban lãnh đạo

Tốc độ doanh thu hàng ngày trong tháng 10 của BMD thấp hơn khoảng 10% so với mức trung bình quý 3 là 26,1 triệu USD. Ban lãnh đạo cho biết doanh thu hàng ngày trong quý 4 có thể gần bằng mức 22 triệu USD ghi nhận trong quý 4 năm 2025, hoặc thấp hơn một chút do hoạt động chuyển đổi nhà cung cấp, sự chậm lại theo mùa và hàng tồn kho trên kênh phân phối tăng cao.

Khoản hỗ trợ tài chính nằm trong thỏa thuận với James Hardie có thể bù đắp một phần sự sụt giảm doanh thu tạm thời và có thể hỗ trợ nâng cao tỷ lệ biên lợi nhuận gộp báo cáo của BMD trong giai đoạn đẩy mạnh doanh số.

Giá gỗ dán tính từ đầu quý đến nay cao hơn khoảng 5% so với mức trung bình quý 3. Ban lãnh đạo lưu ý rằng biến động giá trong thời gian còn lại của quý sẽ phụ thuộc vào nhu cầu thị trường cuối, tính mùa vụ và sự biến động của nguồn cung nhập khẩu.

Chi phí sản xuất trên mỗi đơn vị sản phẩm của mảng Sản phẩm Gỗ dự kiến sẽ tăng do sản lượng sản xuất thấp hơn và chi phí keo nhựa (resin) cũng như phôi gỗ OSB webstock cao hơn. Ban lãnh đạo cũng chỉ ra rằng việc tạm dừng sản xuất hoặc cắt giảm sản lượng có chọn lọc có thể được áp dụng để điều chỉnh nguồn cung phù hợp với nhu cầu.

Rủi ro và các yếu tố cần theo dõi

• Tổng số lượng nhà khởi công tại Mỹ đã giảm 4% so với cùng kỳ năm trước trong quý 3, trong khi số lượng nhà gia đình đơn lẻ khởi công giảm 2%.
• Giá nhiên liệu cao, lãi suất cơ bản cao hơn và hạn chế về khả năng chi trả nhà ở tiếp tục gây áp lực lên hoạt động xây dựng và nhu cầu của người tiêu dùng.
• Khách hàng vẫn duy trì sự thận trọng và đang giảm hàng tồn kho, làm tăng áp lực ngắn hạn lên sản lượng đồng thời gia tăng sự phụ thuộc vào mô hình phân phối hai bước của Boise Cascade.
• Sự tái cơ cấu giữa nhà cung cấp và nhà phân phối đã khiến kênh sản phẩm sàn gỗ có lượng hàng tồn kho dồi dào, điều mà ban lãnh đạo dự kiến sẽ gây áp lực lên doanh thu quý 4.
• Nguồn cung EWP vẫn vượt quá nhu cầu, tạo ra áp lực cạnh tranh về giá mặc dù ban lãnh đạo kỳ vọng giá bán sẽ cải thiện nhẹ so với quý trước trong quý 4.
• Chi phí đầu vào của mảng Sản phẩm Gỗ đã tăng trên nhiều danh mục, trong khi tỷ lệ vận hành thấp hơn có thể làm tăng chi phí chế biến trên mỗi đơn vị sản phẩm.
• Chính sách thương mại đang diễn biến liên quan đến Brazil và Canada có thể tiếp tục ảnh hưởng đến nguồn cung và giá gỗ dán.

Điểm nhấn phiên Hỏi & Đáp với các chuyên gia phân tích

Nhu cầu BMD và hàng tồn kho kênh phân phối: Ban lãnh đạo mô tả khách hàng rất thận trọng và cho biết nhiều bên vẫn giữ lượng hàng tồn kho cao hơn mức mong muốn. Khi hàng tồn kho trở lại bình thường, Boise Cascade kỳ vọng khách hàng sẽ phụ thuộc nhiều hơn vào mô hình phân phối hai bước, có khả năng kéo dài qua mùa hè năm 2027 và xa hơn nữa.

Quá trình chuyển đổi James Hardie: Phản ứng của khách hàng đối với bộ sản phẩm mới rất tích cực, theo ban lãnh đạo, và một số hoạt động chuyển đổi đã diễn ra. Tuy nhiên, công ty nhấn mạnh rằng quá trình chuyển đổi vẫn ở giai đoạn đầu và quý 4 sẽ bị ảnh hưởng bởi doanh số sàn gỗ hiện hữu ở mức tối thiểu cũng như quá trình mở rộng TimberTech vẫn đang triển khai.

Giá bán và sản lượng sản xuất EWP: Ban lãnh đạo cho biết sự bảo vệ giá, các điều chỉnh theo từng thị trường và các khoản chiết khấu liên quan đến thuế quan Canada đã giúp ổn định mức giá thực tế trong quý 3. Sản lượng EWP suy yếu trong suốt quý và hoạt động sản xuất có thể bị cắt giảm nếu cần thiết để phù hợp với nhu cầu.

Tỷ lệ vận hành: Tỷ lệ vận hành trong quý 3 đạt khoảng 80% đối với gỗ dán và ở vùng thấp của khoảng 80% đối với EWP. Ban lãnh đạo dự kiến tỷ lệ vận hành EWP sẽ giảm trong quý 4 khi veneer được chuyển hướng sang sản xuất gỗ dán và giờ sản xuất được điều chỉnh.

Sự chậm trễ trong chi tiêu vốn: Dự báo thấp hơn cho năm 2026 phản ánh sự chậm trễ về cấp phép, nhà thầu, vật tư và thiết bị ảnh hưởng đến các dự án BMD. Một số khoản chi tiêu dự kiến sẽ chuyển sang năm 2027, nhưng ban lãnh đạo nhận định sự thay đổi này là một vấn đề về mặt thời điểm chứ không phải sự rút bớt mang tính chiến lược.

Toàn văn Biên bản Cuộc họp Báo cáo Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and welcome to the Boise Cascade's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Chris Forrey, Senior Vice President of Finance and Investor Relations. Please go ahead.

Chris Forrey

Good morning, everyone. Welcome to Boise Cascade's Third Quarter 2026 Earnings Call and Business Update. Joining me on today's call are Jeff Strom, our CEO; Kelly Hibbs, our CFO; Joe Barney, Leader of our Building Materials Distribution Operations; and Troy Little, leader of our Wood Products Operations.

Turning to Slide 2. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that the appendix includes reconciliations from our GAAP net income to EBITDA and segment income to segment EBITDA.

I will now turn the call over to Jeff.

Jeff Strom

Thanks, Chris. Good morning, everyone, and thank you for joining us for our earnings call. I'm on Slide 3. In the third quarter, total U.S. housing starts and single-family housing starts decreased 4% and 2%, respectively, compared to the prior year quarter. Our consolidated third quarter sales increased 8% year-over-year to $1.8 billion. Our net income and earnings per share were $36.4 million and $1.04 per share, both higher than the prior year quarter. We are proud of the results our team delivered in the quarter.

The operating environment characterized by rising fuel prices, political uncertainty and cautious consumers facing growing affordability challenges persisted, but our focus and execution did not waver. Our divisions work together to unlock the value of our integrated model, the resilience of which was on full display during the quarter.

Last quarter, we announced that we would partner with James Hardie as our exclusive supplier of siding, composite decking and PVC and fiber cement trim. With the World Series having just wrapped up, it feels only appropriate to reference that announcement as the opening pitch, and we are still in the early innings of operationalizing the agreement with the transition unfolding as expected. Our sales teams have done a tremendous job balancing the duties of selling through legacy inventory by actively developing product knowledge and identifying market opportunities across James Hardie's TimberTech and AZEK product lines.

Our sales of Hardie siding and trim products continue to show strong year-over-year growth. I want to recognize the BMD associates across our footprint for attacking a strategic initiative of this scale. I'm pleased that in less than a full quarter, we were able to meaningfully reduce legacy stocking positions and made great strides with the load-in of new products.

Work remains to rebuild revenue in our general line product category, but we have excellent products and exemplary distribution footprint and the right team in place to seize the opportunity. Kelly will now walk through our segment financial results, capital allocation priorities and fourth quarter guidance, after which I'll provide insights on our business outlook and make closing comments before we open the call for questions. Kelly?

Kelly Hibbs

Thank you, Jeff. I'm on Slide 4. BMD sales in the quarter were $1.7 billion, up 7% from third quarter 2025. Segment EBITDA of $66.9 million in the third quarter compared to segment EBITDA of $69.8 million in the prior year quarter. Gross margins increased $3.6 million compared to the prior year quarter, resulting from higher gross margins on commodity products, offset partially by lower gross margins on general line products. Selling and distribution expenses were up $6.9 million from third quarter 2025, approximately 80% of which was due to higher outbound delivery and fuel costs.

In Wood Products, our sales in the third quarter, including sales to our Distribution segment, were $461.2 million, up 16% compared to third quarter 2025. Segment EBITDA was $42.7 million compared to EBITDA of $14.5 million reported in the year ago quarter. The increase in segment EBITDA was primarily due to higher plywood prices and EWP sales volumes. These increases were offset partially by higher per unit conversion costs.

Moving to Slides 5 and 6. BMD's year-over-year third quarter sales increase of 7% was driven by net sales price and net sales volume increases of 5% and 2%, respectively. By product line, general line sales increased 4%, commodity sales increased 15% and sales of EWP increased 1%. Sequentially, BMD sales decreased 2%, a solid result when considering market dynamics and disruptions from supplier transition activities and a special shout out to our commodity sales team for delivering year-over-year and sequential sales increases.

Our third quarter gross margin was 14.3%, down 80 basis points year-over-year. Gross margins on general line products were negatively influenced by destocking associated with the transition of our composite decking supplier, offset partially by improved gross margins on commodity products. On a sequential basis, supplier transition activities and a lower proportion of general line sales were the primary drivers of our gross margin decline.

BMD's EBITDA margin was 4% for the quarter, down from 4.5% in the year ago quarter. The 50 basis point decline resulted from lower gross margins and higher selling and distribution expenses, offset partially by improved operating expense leverage from higher sales volumes. On a sequential basis, EBITDA margins contracted from the 5% reported in the second quarter. Seasonal demand deceleration, lower gross margins and reduced operating expense leverage from lower volumes impacted our third quarter results.

Turning to Wood Products on Slide 7. Third quarter I-joist and LVL volumes were up 10% and 18%, respectively, on a year-over-year basis. Sequentially, I-joist volumes decreased 4% and LVL volumes increased 2%. As it relates to third quarter pricing, I-joist and LVL realizations were flat year-over-year and sequentially. Our third quarter realizations marked four quarters of price stability in EWP. Price protection mechanisms on contracted volumes, market-specific competitive adjustments and rebates to support volumes sold into Canada that were subject to tariffs held realizations stable despite the price increase announced last quarter.

Turning to Slide 8. Our third quarter plywood sales volumes was 362 million feet compared to 387 million feet in third quarter 2025 and 368 million feet in second quarter 2026. The year-over-year and sequential decreases in plywood volumes were driven by greater utilization of veneer into EWP. Our average plywood net sales price was $425 per thousand in the third quarter, representing a 31% increase year-over-year and an 8% increase sequentially. We attribute the continued improvement in plywood pricing to supply side influences resulting from trade policy decisions regarding Brazil and Canada.

Brazilian plywood imports have declined by 12% year-over-year through the third quarter of 2026, primarily impacting Southern Yellow Pine plywood markets. In August, the United States imposed 50% tariffs on Canadian veneer plywood and LVL imports that impacted Western plywood markets. We anticipate evolving trade policy will continue to influence plywood market dynamics.

I'm now on Slide 9. We had capital expenditures of $90 million in the first 9 months of 2026, including $27 million in the third quarter. BMD and Wood Products spent $8 million and $19 million, respectively, on capital projects in the third quarter. We are reducing our capital spending range for 2026 to $120 million to $140 million, principally a result of project delays on several BMD organic growth projects.

Speaking to shareholder returns, we paid $26 million in regular dividends during the first nine months of 2026, including $8 million in the third quarter. Our Board of Directors recently approved a quarterly dividend on our common stock of $0.23 per share that will be paid in mid-December. Through the first 10 months of 2026, we repurchased approximately $118 million of Boise Cascade common stock, including approximately $9 million between July and October. At the end of October, approximately $120 million of our outstanding common stock was available for repurchase under our existing share repurchase program. The ongoing strength of our balance sheet and cash generation capability through the cycle leaves us well positioned to continue pursuing our strategic growth objectives while taking a steady, disciplined approach to shareholder returns.

I'm now on Slide 10. We have outlined a range of potential EBITDA outcomes along with the key assumptions underlying these projections. We currently estimate BMD's fourth quarter EBITDA will be between $35 million and $45 million. Our daily sales pace in October decelerated from the third quarter sales pace of $26.1 million per day and is expected to moderate further due to seasonal slowing and supplier transitions in the channel. Specific to composite decking, we have made very good progress on wind-down and ramp-up activities, but expect more pronounced revenue declines in Q4 given the level of inventory that has been placed into the channel through recent supplier and distributor realignments. Gross margins are expected to be between 14% and 14.75%. Included in our James Hardie agreement are provisions for financial assistance to support our sales ramp that may partially mask the impact of temporary moderation in BMD's revenue and lead to elevated gross margin percentages throughout the sales ramp.

Turning to our anticipated results for Wood Products. We estimate fourth quarter EBITDA will be between $10 million and $20 million. In addition to typical seasonal factors, our results will reflect continued weakness in single-family housing, elevated fuel and transportation costs, and higher input costs. We expect sequential volumes to decline high-teens to mid-20%. EWP pricing is expected to increase slightly on a sequential basis.

In plywood, we expect volumes to decline mid- to high single digits sequentially. On plywood pricing, quarter-to-date realizations are approximately 5% above our third quarter average, with the balance of the quarter dependent upon end market demand, seasonality and ongoing import supply volatility. We expect our per unit manufacturing costs will increase primarily due to lower volumes and higher resin and OSB webstock costs. Lastly, we anticipate an effective tax rate for the fourth quarter of approximately 5%, influenced by the purchase of tax credits that decrease our rate and the expected lower level of income before tax in the quarter.

I will turn it over to Jeff to share our business outlook and closing remarks.

Jeff Strom

Thank you, Kelly. I'm on Slide 11. High fuel prices and an inflation-driven increase in benchmark interest rates have amplified the affordability challenges that have constrained the new home market throughout 2026. These realities and typical seasonal declines will be headwinds on fourth quarter construction activity. Early industry projections for 2027 indicate that housing starts are expected to decline mid-single digits from 2026 levels.

Our consistent performance relative to the muted broader market conditions in 2026 is a testament to Boise Cascade's national scale and regional expertise. In this environment, customers are hesitant to make significant inventory commitments, increasing the reliance on BMD's in-stock product availability and next-day delivery capabilities.

In Wood Products, our vertically integrated veneer production has insulated us from risks associated with the purchase and importation of veneer. Boise Cascade's integrated operating model strengthens our ability to respond to customer needs and changing market conditions. By coordinating manufacturing, inventory and logistics decisions across our Wood Products and Building Materials Distribution segments, we improved channel visibility and more effectively align supply with end market demand.

Beyond the near-term uncertainties, long-term residential construction fundamentals remain positive, and we believe the investments made throughout the business cycle have us well positioned for the eventual recovery in housing starts. Market dynamics aside, our focus will remain on our customers to deliver the products and services they need to be successful.

Regarding our supplier transition activities in BMD, as we begin climbing the sales ramp with our new suite of products, we know the only way to maintain and grow customer base will depend on consistent execution. We look forward to providing more progress updates as we move into 2027.

Thank you for joining us today and for your continued support and interest in Boise Cascade. We welcome any questions at this time.

Operator

[Operator Instructions] And our first question will come from Susan Maklari with Goldman Sachs.

Phần hỏi đáp

Susan Maklari

My first question is talking a little bit more on the fourth quarter outlook. You mentioned that in BMD, your daily sales are down about 10% sequentially so far. And when we think about the environment out there and the seasonality as we go into year-end, can you just give us a little more color on how we should think about the moves in the back half of the quarter? And maybe what do we need to see for things to get a little better versus perhaps take a slightly -- another step down?

Jeff Strom

Sue, this is Jeff. I'll start with that a little bit. Just from talking to our customers overall, I would tell you that the word I've used is really, really cautious, and that's obviously having an impact on the demand that we're seeing. And the other thing that we're hearing from them is that they still have a lot of inventory above what they really want. And so they set targets, here's the days we want to have on hand, and then it has moved now since they originally set that. So there's still a little bit of work to go on there.

So what we're hearing, obviously, is there is going to be -- once they get to the position they want a really, really big reliance on 2-step distribution. And I think going forward, the one thing that's a little bit different that we're hearing this time is it's not just, hey, we want to rely on 2-step distribution to get us through the winter. We're hearing loud and clear, it's a lot longer than that and carrying them into the summer and beyond that. So we feel good about that. We think we're set up really, really well to service them whatever comes up.

Susan Maklari

It's good to hear that the 2-step model is continuing to be of real value in this environment. And then maybe with that, can you talk a little more about the progress on the transition within the composite decking and the siding supplier agreements. Just where you are with that, how we should think about the moves there into year-end, and where you'll be positioned as we think about early '27?

Jeff Strom

Yes, absolutely. I would just start with this, particularly on the decking side. It is very early, and I want to state that. As far as the product goes, it is beautiful. It's [indiscernible] compliance. They have the complete PVC line and the fire rating and all those we really believe are an advantage for us. Since we've really started to hit the market a little bit, the customer reception has been great. It's really been exactly what we expected and what we're told. We hear over and over that they want to continue to support us and work with us.

We have seen a few conversions. But again, I'd just stress, it is early. The [ block stores ] national accounts, I think they really see the benefit of this full suite of products once we're fully ramped up and ready to go. We've engaged obviously more and more with the Hardie sales force and they're excellent, and we really believe that they will help, along with our sales force, drive some demand together. But right now, we are. We're working on the winter buy. We're out there after. We're still loading in some of the AZEK. I would tell you, as expected, the Hardie siding growth has been really strong so far, but we have a long way to go, and this is a major undertaking. But we are thrilled about our future together and the direction we're heading, but it will take some time.

Joanna Barney

Yes. Let me just jump in there and echo what Jeff is saying. Our siding sales were up significantly in the third quarter, which we expected, really up more than enough to offset the drawdown on our legacy decking sales in the quarter. We expect that, that siding business is going to just continue to grow. We are seeing a lot of success, to Jeff's point, in driving decking conversions. We are bringing a lot of our customers with us. So we see a lot of -- ton of upside opportunity there. And again, 75% of the decking market still uses traditional wood, right? So the total opportunity that we see in decking is tremendous. So we're excited about that.

That said, I will tell you that fourth quarter is going to be noisy for us. Our legacy decking sales are going to be minimal going forward. We've sold through probably 80% of that now. And our complete strategic focus is turning really to the Hardie TimberTech product categories in the fourth quarter. But we just started selling TimberTech last month, right? So also understand, to Jeff's point, the channel has absorbed a lot of decking over the past couple of months now with multiple distributors changing suppliers. And as all of that has happened, customers are really starting to work to reduce their net working capital, and we're heading into winter. So with that, we'd expect fourth quarter probably becomes our base level of sales on decking, and then we'll start to gain upward momentum as we move into 2027.

Susan Maklari

And then I just want to squeeze one more in, which is: can you talk about conditions in EWP? And especially given the deceleration that a lot of the builders are talking to into year-end and then likely even into early 2027, how are you thinking about pricing there and the competitive environment and how that could come through relative to volumes in that part of the business?

Troy Little

Yes. Thanks, Sue. This is Troy. Yes, I guess, first, on the price side, we held -- the prices held sequentially. That was primarily due to the price protections that we had in place. We are continuing to see the pressure in the market. And in some cases, we've had to adjust relative to our previously announced increase. And then the impact of the Canadian tariffs in the West in terms of some of that veneer coming down out of Canada, maybe we haven't seen the full impact of that yet, but that is there.

So we still believe that we're going to see some slight improvement in Q4, but really because of that pressure continues on price just because there's a lot of supply available above demand, I would hate to speculate. Even on our previous announced in -- going into, say, Q1, but we do still see some activity or some opportunity in price in Q3. But relative to volumes, we entered the Q3 with a very strong profile. The graph on that was straight down through the quarter. We worked our order file, but then we started to see our production exceed demand. We had some opportunity to move into the inventory side, replenish some depleted inventories. And now we've just got to the point now where it is shifting that veneer over to the plywood side.

And so going into Q4, right now, we're expecting volumes on the EWP side to still be challenged. As Jeff just mentioned, we've got key dealers out there still destocking and relying on the 2-step going into the end of the year. And so right now, the way we're looking at it is comparing to, say, Q4 of last year, both on EWP volumes as well as plywood volumes. In Q4 of last year, we did take some market-related downtime, and we're prepared right now to do that if necessary to match supply to demand.

Operator

The next question will come from Michael Roxland with Truist Securities.

Niccolo Piccini

This is Nico Piccini on for Mike. I just wanted to revisit the 4Q BMD guide. Is there a way to think about or maybe dimensionalize the sequential decline through like seasonal demand decline, maybe a real less consumption or true demand decline and then the supplier shakeup, and then any financial support you might be receiving from Hardie?

Kelly Hibbs

Yes, Nico, this is Kelly. Good to hear from you. Yes. So the sales pace so far in the fourth quarter for BMD, we indicated it's about 10% off of the $26.1 million daily sales average that we had in the third quarter. And so if you think about October, November, December, November and December are always going to be weaker in terms of the daily sales pace, just given weather and there's also fewer sales days in those two months compared to October. And so as we've alluded to, there's going to be a number of headwinds for us beyond just the normal seasonality with weather and holidays and those sorts of things.

Joe hit on it in terms of as we work through the supplier transitions, the channel is fairly full in many cases, and we have dealers looking to wind down their inventory as they get positioned for year-end. So I think all those will be headwinds. And I guess to maybe put the last point on it before I'll open it up for anybody else is, if you look at what our daily sales pace was last year's fourth quarter, it was about $22 million a day. And so I think that's probably not an unreasonable metric that we might expect to see in the fourth quarter, but maybe even a little softer just given the uniqueness of the supplier transition activity.

Niccolo Piccini

Following your announcement, we obviously saw a lot of other suppliers shake up. I wonder if that was expected or just in general, since you announced this deal, what has or hasn't proceeded with your expectations?

Jeff Strom

I think everything has proceeded pretty much exactly as we thought. We knew that there would be a drag on sales as we transitioned. This quarter, in particular, we'll feel it as we just got product in, and we're still moving some product off. So it has happened really like we thought it would. And the positive side to that is we heard from a lot of customers across the country that they would be there to support us and to help us or to work with us, and we're seeing that as well. So I don't think there's really been any large surprises there at all.

Niccolo Piccini

And then just maybe one final one. You mentioned the lower CapEx guidance was on project delays and distribution. Can you give a little more color on that? What drove that? Is that intentional or not?

Kelly Hibbs

Yes, sure. So we did reduce the range for 2026, Nico, and that was largely just a function of some organic growth projects we had going in BMD that were frankly delayed, whether it's permitting, whether it's getting contractors lined up, whether it's materials, equipment, et cetera. It's really just a function of delays as opposed to a meaningful pullback. And lastly, I would say, in terms of 2027 CapEx, we haven't -- we're not at the point yet where we're prepared to speak to the range. But there will be some of the '26 that we will push over into 2027, but we've still got to have a broader conversation internally in terms of what our base level of 2027 spending will be. So we'll get back to you the next time we talk around the 2027 range.

Operator

The next question will come from Ketan Mamtora with BMO Capital Markets.

Roshni Athaide

This is Roshni Athaide for Ketan. I was just wondering if you could maybe talk a little bit more about your Wood Products guide and walk us through the bridge. If plywood is maybe like a $20 million per year-over-year tailwind, like what are the other offsets we should be thinking about there?

Troy Little

Yes. This is Troy again. Yes, I guess I'd just reemphasize that at least the way I'm looking at it is, going into Q4 of last year, and so I'm making that comparison. Our prices are similar in terms of EWP. So it's not EWP price. Like you mentioned, plywood prices are up. But really, for the -- as it relates to the fourth quarter forecast, it's a volume issue and volume relative to some escalated cost, that's really impacting our conversion cost number or manufacturing cost number.

And so like I mentioned, our volumes for EWP have come off. We've shifted over to plywood and then the next shift is to curtail and match the demand. And so in fourth quarter of last year, we did have that around the holidays. We're anticipating some of that. We also have some maintenance-related downtime in some of our mills. And so that volume is really the driver.

And then on the cost side, we've seen cost -- I just looked at like, say, 10 key input drivers for us, and our costs are up anywhere from 5% to 30%. And of the 10 that I looked at, on average, were up about 10%. So increased costs, lower volumes, that's what's really driving that forecast.

Roshni Athaide

Okay. Are you able to also just quantify like the transportation or freight headwinds that you had in Q3? And how much of that is embedded going from Q3 to Q4?

Kelly Hibbs

Yes. So what we did speak to, Roshni, in terms of transportation was specific on the distribution side in terms of quantifying the selling and distribution expenses and how much of that related to fuel and delivery costs, which was about 80% of our selling and distribution increase in BMD. As we think forward fourth quarter, no reason for us, I guess, to believe that diesel fuel and other things will come off at this point. The only, I guess, sequential benefit we could see there is just the fact that we expect to have lower volume, so lower outbound actual volume. Anything else we'd add on freight and transportation, guys?

Jeff Strom

No, I would say, the inbound freight, obviously, we can absorb very easily. The outbound freight is a little bit more challenging. But I would give a shout out to the BMD team, has done a fantastic job of building it into the pricing and really done a nice job of covering where we can.

Roshni Athaide

And just one more for me. I think you mentioned that you've sold about 80% of your old supplier products so far. Do you expect to finish the rest through Q4? Or is there going to be like spillover into Q1?

Jeff Strom

No, I think given what's in the channel right now and how full it is with all the switches that have taken place, we're pretty comfortable with the 20% we have left. And yes, we will continue to sell some of it if the right opportunity comes along. But decking season is around the corner in the spring, and we just believe that we'll have more success selling it then. And so we'll move what we can, but the plan is when decking season kicks in, we'll move the rest of it.

Joanna Barney

Yes. And with the early-buy decking opportunity, we really want to make our strategic focus the Hardie TimberTech brands. And so we're intentionally making -- shifting away from that right now in order to put our full strategic focus on the future and the brands that we're going to be partnered with in the future.

Operator

Our next question will come from Nicholas Sherwood with Bank of America.

Nicholas Sherwood

This is Nick Sherwood speaking for George Staphos. Can you talk about some of your operating rate assumptions when thinking about pricing and just how you're going to be managing operating rates through the year and into 2027?

Troy Little

Yes. I'd say right now, relative to Q3, like I mentioned, we were able to run fairly -- if you're looking at the dry veneer side and then whether that dry veneer goes to EWP or to plywood, we ran fairly well through the quarter. Our operating rates through the quarter were 80% range for the plywood side and low 80s for the EWP side. That's where I'd expect going into Q4. We're going to be shifting away more veneer away from EWP. So those operating rates will come off. And then plywood, while we're running, we're going to run fine. It's just a matter of the hours that will be taken out if that comes to pass.

Nicholas Sherwood

And then for my second question, can you just talk about the James Hardie transition? And what kind of operational milestones should we think about for that partnership in 2027?

Joanna Barney

I think the way that we look at the James Hardie TimberTech, where we're trying to go, our objective there was never just about replacing our existing sales, right? We've really partnered with James Hardie and TimberTech brand in order to go out and gain share, expand our overall market position, take over the marketplace. So the opportunity isn't just selling decking and siding products for us. We really see an opportunity to go drive the entire market toward adopting an exterior solution. We measure our success by our customers' success, by our customers' growth. So if we can bring them the right solution, if we are aligned with the right suppliers who are long-term market winners, then our customers will begin to grow and that becomes a sustainable model for us. So that is always our focus.

And so we partner with the best-in-class brands in order to do that. The suppliers who are the most innovative, the ones that bring solution-based opportunities to our customers and to the market, and then the rest of it is just based on our execution. And we are really extremely confident in our ability to go execute.

Operator

The next question is a follow-up from Ketan Mamtora with BMO Capital Markets.

Roshni Athaide

This is Roshni filling in for Ketan. Just one more question. Could you please provide some perspective on channel inventories in siding, particularly whether they're at normalized levels? And then also on siding growth, could you just break down how much is coming from market versus incremental share gains? Just any perspective there would be helpful.

Jeff Strom

Yes, I'll start with that and then Joe can fill in. I think the same thing has happened with siding is what happened with decking. When there's a switch, people started trying to move the material into the market. However, I will say we are seeing some gains on our Hardie siding. We are. They're meaningful. We believe we're picking up share. We don't think that the market is so strong as much as it is that we're gaining share, and we're seeing and feel really good about that and think about our opportunity going forward. I really believe in this quarter that the gains we will pick up on siding will really help to cover what we won't get on the decking side as we transition.

Joanna Barney

Yes, I would agree with Jeff. Our siding sales have picked up significantly. We believe they're going to continue to pick up. We're picking up a lot of that business from the James Hardie exits that they've made in different markets as far as other distributors. So we picked that up. And yet, there was still quite a bit of siding inventory in the market from those exits. So we anticipate that, that's just going to continue to grow as those other distributors wind down and we ramp up.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jeff Strom for any closing remarks. Please go ahead.

Jeff Strom

Thank you for your continued interest in Boise Cascade. We look forward to our conversations next quarter. Be safe. Thanks again.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.