UFP Industries Freight Costs Cut Profit Despite Sales Rebound

The Tip Desk · November 2, 2026 · 4 min read

Third-quarter net sales reached $1.73 billion, up 11.1% from a year earlier, as organic units, acquisitions and prices all rose.

UFP Industries (UFPI), a Grand Rapids manufacturer of value-added products for retail, packaging and construction, reported third-quarter 2026 net sales of $1.73 billion, up 11.1% from $1.56 billion a year earlier, after a 3% year-over-year increase in the second quarter.

The company said the sales gain came from a 4% increase in organic units, a 2% increase from acquisitions and a 5% increase in selling prices. Diluted earnings were $1.05 a share, compared with $1.29 a year earlier. Net earnings attributable to controlling interests were $58 million, versus $75 million.

UFP said earnings were primarily impacted by higher freight and lumber costs, offset by organic unit growth, benefits from ongoing cost-out actions, and improved gross profit in several business units. Adjusted EBITDA was $119.3 million, or 6.9% of net sales, compared with $140.0 million, or 9.0% of net sales, a year earlier. Transportation costs, net of fuel surcharges, increased by $19 million, or 1.3% of net sales.

Freight costs as a percent of net sales increased 1.3 percentage points, or $19 million, net of fuel surcharges and price adjustments, versus year-ago levels. The company said the increase was driven by higher market-based transportation rates due to tightening industry capacity and elevated fuel costs. Freight spot rates, excluding fuel, increased 30% during the quarter before stabilizing at an elevated level towards the end of the quarter. Industry-wide changes resulted in constrained carrier capacity, as smaller carriers have exited the market, which contributed to the higher rates.

New product sales were 8.7% of total net sales, compared with 6.8% a year earlier, led by Deckorators, Structural Packaging, and Construction value-added offerings. President and CEO Will Schwartz said organic unit growth strengthened in the third quarter despite continued pressure across several end markets.

UFP Retail net sales rose 6.8% to $634.5 million, with organic units flat, acquisitions adding 1% and selling prices adding 6%. ProWood organic unit sales declined 4%. Deckorators organic unit sales grew 21%. Surestone decking sales increased 70%, traditional wood plastic composite decking increased 69% including acquisitions, and railings increased 2%. The MoistureShield acquisition contributed a 44% increase in wood plastic composite decking sales. Surestone backlog improved to approximately $18 million. Retail adjusted EBITDA declined 14.7% to $34.1 million, or 5.4% of net sales, primarily due to an $8 million increase in transportation costs, partially offset by improved gross profit in Deckorators and UFP Edge.

UFP Packaging net sales rose 18.0% to $465.8 million, with organic units contributing 9%, acquisitions 6% and selling prices 3%. Structural Packaging organic unit sales grew 14%. PalletOne organic units rose 1%, with acquisitions adding 18% in unit sales. Protective Packaging organic units rose 5%. Packaging net earnings fell 46.6% to $11.4 million, and adjusted EBITDA declined 20.5% to $27.3 million, or 5.8% of net sales, primarily due to higher transportation and material costs.

UFP Construction net sales rose 11.3% to $552.4 million, with organic units contributing 4% and selling prices 7%. Site Built organic unit sales increased 12%. Factory Built organic units decreased 10% on the loss of lower-margin commodity sales. Concrete Forming Solutions organic units rose 6%. Commercial organic units rose 20%. Construction net earnings fell 14.3% to $21.1 million, and adjusted EBITDA declined 10.0% to $37.7 million, or 6.8% of net sales, primarily due to lower Site Built gross profits from macroeconomic pressures, competitive pricing and higher material costs, partially offset by improved Commercial and Concrete Forming gross profits.

The company now expects to meet or exceed its initial $60 million cost-savings objective by year-end. Full-year 2026 outlook remains unchanged: industry unit demand is expected to be slightly down in each segment, energy and transportation are expected to remain elevated, and the company is not assuming a meaningful improvement in underlying market demand through year-end.

On October 26, 2026, UFP announced a plan to acquire Apache Products, Inc., a wood pallet manufacturer, in November 2026 for an estimated $27 million in cash; Apache had 2025 sales of about $53 million. The board declared a quarterly cash dividend of $0.36 a share, a 3% increase from the 2025 quarterly rate of $0.35. During the first nine months of 2026 the company repurchased 2,169,224 shares for $182.7 million at an average price of $84.24; a new $300 million repurchase authorization through April 30, 2027 left about $198 million available as of October 28, 2026. Liquidity was approximately $2.0 billion, with no borrowings outstanding under the revolving credit facility.