BlueLinx delivered its third-highest quarter in three financial metrics (diluted earnings per share, adjusted EBITDA, and operating cash) during the company’s fiscal second quarter. The company reported net sales decreased 5% on a year-over-year (YOY) basis in the quarter to $1.2 billion. BlueLinx attributed the sales decline to wood-based commodity price declines.
Net sales of specialty products for BlueLinx, which includes engineered wood, siding, millwork, outdoor living, specialty lumber, and industrial products, increased 17% YOY in the second quarter to $788 million. The company attributed the growth to strategic pricing actions, offset partially by slightly lower volume when compared to 2021’s historically strong demand. Gross profit from specialty product sales was $180 million in the quarter, a 9% YOY increase compared to the second quarter of 2021. Gross margin for the category decreased from 24.4% in the second quarter of 2021 to 22.9% in the second quarter of 2022, primarily due to price volatility.
Net sales of structural products, which includes lumber, plywood, OSB, rebar, and remesh, decreased 29% YOY to $452 in the quarter. Gross profit decreased 75% YOY to $21 million in the fiscal second quarter. BlueLinx said the decrease in structural sales and gross profit was due primarily to a “significant decline” in the average price of wood-based commodities. Gross margin remained level at 4.7%, reflecting the impact from wood-based commodity price deflation.
Overall, BlueLinx reported a gross profit of $201 million, a 20% YOY decrease from the year-prior period. Gross margin decreased 290 basis points to 16.3% in the fiscal second quarter.
“We are closely monitoring the macroeconomic environment as broad-based inflation and the rapid rise in mortgage rates have put pressure on home affordability and new home starts,” BlueLinx president and CEO Dwight Gibson said in a prepared statement. “Given these developments, we anticipate a slowdown in the U.S. housing industry over the coming quarters. However, we believe the undersupply of homes, demographic shifts, repair and remodel activity, and high levels of home equity, among other factors, will continue to support the broad residential housing market.”
BlueLinx posted a net income of $71 million in the second quarter, down from $113 million in the second quarter of 2021. Adjusted EBITDA was $112 million, or 9.1% of net sales, in the fiscal second quarter, compared to $166 million, or 12.7% of net sales, in the second quarter of 2021.
Marietta, Ga.-based BlueLinx has a distribution footprint serving 40 states and the company distributes its range of structural and specialty products to approximately 15,000 customers across the United States.
