Earnings

Simpson Manufacturing's Sales Growth Cools to 2.3%

The Tip Desk · October 27, 2026 · 4 min read

Third-quarter net sales were $638.1 million as income from operations rose only 0.2% to $141.0 million.

Simpson Manufacturing Co., Inc. (SSD), an industry leader in engineered structural connectors and building solutions, reported third-quarter net sales of $638.1 million, up 2.3% from a year earlier, a sharp slowdown from 6.3% year-over-year growth in the second quarter and 9.1% in the first.

Income from operations was $141.0 million, up 0.2% from a year earlier, after a 20.6% year-over-year increase in the second quarter. Operating income margin fell to 22.1% from 22.6% a year earlier, after reaching 25.2% in the second quarter. Net income per diluted share was $2.68, up 3.9%. Adjusted EBITDA was $167.2 million, up 7.4%.

President and Chief Executive Officer Mike Olosky said the sales increase was supported by pricing actions while global volumes remained relatively flat, and that the company continued to outperform the majority of its relevant end markets. He said the company maintained a 22.1% operating margin despite higher steel costs.

Gross profit margin compressed to 45.7% from 46.1% a year earlier, after expanding to 47.4% in the second quarter. Total operating expenses were $150.5 million.

North America, the larger of the company’s geographic segments, posted net sales of $502.0 million, up 3.8% from $483.6 million, primarily due to price increases and higher unit sales volumes, according to the company. North America gross margin decreased to 48.4% from 48.7% due to higher material, labor and freight costs as a percentage of net sales. Income from operations in the segment was $137.0 million, up 9.5% from $125.2 million, with operating margin rising to 27.3% from 25.9%, primarily due to higher net sales and lower operating expense including lower personnel costs, professional fees and bad debt reserve charges.

Europe net sales of $129.9 million decreased 3.4% from $134.4 million due to decreased unit sales volumes, partly offset by unit price increases, after Europe sales had risen 7.6% year-over-year in the second quarter. Net sales were negatively affected by approximately $1.6 million in foreign currency translation. Europe gross margin decreased to 36.1% from 37.9%. Income from operations was $15.3 million, down 5.0% from $16.1 million, with operating margin down from 12.0% to 11.8%.

Asia/Pacific net sales were $6.3 million, up 14.9% from $5.5 million. Wood Construction net sales were $534.1 million, up 1.8% from $524.4 million. Concrete Construction net sales were $102.5 million, up 4.8% from $97.8 million.

The company repurchased $66.3 million of common stock in the quarter. On October 22, 2026, the board approved a new $1.0 billion share repurchase authorization with no expiration date, superseding the prior $200.0 million authorization. The company declared a $0.30 per share dividend, estimated at $12.1 million in aggregate, payable January 28, 2027.

The sale of unimproved land in Stockton, California, originally scheduled to close in the third quarter, closed in the fourth quarter. The estimated $11.0 million net gain on disposal will be recognized in the fourth quarter rather than the third.

Cash and cash equivalents totaled $491.3 million as of September 30, 2026, with total debt outstanding of $308.0 million under the company’s $900 million credit facility. Cash flow provided by operating activities was $173.3 million.

The company updated its 2026 outlook. Consolidated operating margin for the full fiscal year ending December 31, 2026, is estimated at 20.0% to 20.5%, including a projected $11.0 million gain on the sale of vacant land. Capital expenditures are estimated at $80.0 million to $90.0 million. The effective tax rate is estimated at 25.0% to 26.0%.

Olosky said the company is navigating a more challenging near-term operating environment characterized by housing affordability pressures, higher steel costs and tighter steel availability, and that it expects to take additional pricing actions in 2027 to address the evolving cost environment.

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Simpson Manufacturing Co., Inc. — all coverage and financials