Builders FirstSource narrows quarterly loss as sales decline slows
The building materials provider reported a net loss of $3.9 million for the second quarter.
Builders FirstSource (BLDR) reported a narrowed net loss for the second quarter, as the pace of its sales decline slowed compared to the start of the year. The building materials provider saw its net loss shrink to $3.9 million from a loss of $47.4 million in the prior quarter.
Net sales decreased 8.8% year-over-year to $3.9 billion. This represented a slight improvement in trajectory from the 10.1% year-over-year decrease reported in the first quarter. Core organic net sales declined 7.0%, a deceleration from the 8.3% decline seen in the previous period.
Profitability metrics remained under pressure. Gross profit margin decreased 260 basis points year-over-year to 28.1%, following a 220 basis point decrease to 28.3% in the first quarter. Adjusted EBITDA margin declined 350 basis points year-over-year to 8.5%, though this was an expansion from the 360 basis point decline to 6.5% recorded in the prior quarter.
The company saw a shift in the drivers of its organic declines. Single-family declines moderated to 8.1% from 11.1% in the first quarter, while multi-family declines accelerated to 9.7% from 1.4% in the prior period.
Cash flow and leverage shifted during the period. Free cash flow decreased 87.4% year-over-year to $32.2 million, compared to a 5.1% decrease to $42.7 million in the first quarter. The net debt to LTM Adjusted EBITDA ratio increased to 3.6x as of June 30, 2026, up from 2.3x in the prior-year period.
Builders FirstSource provided a new full-year 2026 outlook projecting net sales between $14.0 billion and $14.8 billion and Adjusted EBITDA between $1.0 billion and $1.2 billion.
Income tax expense rose to $56.3 million in the second quarter due to an Internal Revenue Service R&D settlement agreement.