Spotty Sales, Tariffs, Suspect Stats and Other Takeaways from LBM's Q2 Earnings

Company	Segment	Sales Change YoY	Income Change YoY	Adjusted EBITDA/After Charges YoY
Builders FirstSource		-8.8%	-100.2%	-34.9%
Boise Cascade	Distribution	+5%	-10%	-7%
Boise Cascade	Wood Products	+3%	+84%	+40%
UFP Industries	Construction	-4.5%	-28.8%	-20.7%
UFP Industries	Retail	+3.9%	-10%	-0.1%
Sherwin-Williams	Paint Stores Group	+5.1%	+4.5%
Trex		+8%	-18%	-8.2%
JELD-WEN		-0.7%	-41.3%	+8.5%
SiteOne Landscape		+5%	+8%	+5%
Floor & Decor		+3%	+51.7%	1.2%
Owens Corning	Roofing	1%		34%
Owens Corning	Insulation	4%		22%
Owens Corning	Doors	-7		11%
Fortune Brands	Water	-6.5%	+12.2%	+7.9%
Fortune Brands	Outdoors	-3.8%	-521.4%	+14.2%
Fortune Brands	Security	+3.8%	+116.3%	+88.2%
MasterBrand		+11.5%	-154%	-40.7%
LP	Siding	-4%		-9%
LP	OSB	-27%		-213%

Blank spaces indicate where companies didn't report those numbers.

You'll find little consistency and lots of consternation in reviewing the second-quarter earnings reports of construction supply's publicly traded companies. Results varied dramatically by company type and products sold. There were more negative than positive numbers among key performance indicators, and even some of the positive ones masked troubles.

Builders FirstSource, for instance, swung to a net loss of $3.9 million from a year-earlier $185 million profit. Sales decreased 8.8% to $3.86 billion, and the drop would have been greater were it not for lower declines in commodity prices. BFS prides itself on its value-added goods, but in Q2 those activities were a drag. Sales of manufactured products dropped 12%, primarily due to lower truss and wall panel volumes and lower input costs and pricing. Sales of windows, doors, and millwork decreased 10%. Specialty building products and services (such as installed sales) decreased 6%.

The company said it has cut costs by $75 million in 2026 and seeking another $15 million in reductions by Dec. 31. It has consolidated 36 facilities so far this year. Conditions are particularly weak in two of BFS' biggest markets--Texas and Colorado--leading it to reduce its outlook for the full year. (See chart.) Meanwhile, LP thinks its siding net sales will rise about 5% in the third quarter but finish the year about 1% down.

Even companies enjoying relatively strong demand had caveats. At Trex, where sales rose 8%, the company noted particularly strong demand for its entry-level Enhance brand.

You also could see weakness when companies focused on sales at locations and companies operating in 2Q25. Sherwin-Williams' Paint Store Group said price increases (often related to the Iran War's impact on oil flows) heled net siles rise by mid-single digits, but sales volume went up only by low single digits. Floor & Decor's comp sales decreased 2.1%; it was only five new store openings that let it post a 3.0% sales increase. Likewise, when MasterBrand removed the sales boost from American Woodmark, which it acquired May 28, the cabinet maker's legacy operations fell 5.6%. It's predicting the addressable market will be down by mid-single digits, as is Fortune Brands Innovations.

On the other hand, MasterBrand expected to get $11 million in tariff refunds by year end. Fortune Brands Innovations expects to do even better, getting enough tariff rfunds to boost operating income by $81 million. Tariffs also appear to figure in Floor & Decor's eye-popping 51.7% rise in net income. Cost of sales during the quarter declined by more than $34 million, boosting gross profit. It's believed that tariff refunds were applied to those costs of goods sold.

Some analysts questioned why BFS' sales to multifamily projects were down 9.7% year-over-year when the U.S. Census Bureau was reporting construction of housing with 5 units or more was down only 6% and starts for such multifamily units had risen 20% from June to June. "I don't think there's any way they [i.e, the census numbers] can be right," BFS CEO Peter Jackson replied. He said he has spoken to a lot of private economists who agree that multifamily activity is much lower than federal numbers suggest.

Webb Analytics talked to several housing economists about this and found that, indeed, there is a lot of discussion over whether the Census Bureau is counting accurately. Challenges unique to multifamily make its numbers harder to calculate than for single-family construction, they said, adding that the Census Bureau is having ever more trouble getting responses to its surveys on a number of issues. The worse the survey returns, the harder it is to be accurate.