Oct 29, 2026 earnings call — Cost actions and share gains amid soft housing
Maintained midpoints for full-year net sales and adjusted EBITDA; net sales outlook $14.2 billion to $14.6 billion.
Revenue $3.9B (est $3.8B) · EPS $1.51 (est $1.06) · Next-quarter revenue outlook $14.2B–$14.6B
Key quotes
"We remain on track to deliver the $140 million in cost actions we outlined."
"This quarter, we acquired ICG and Gleckler and Sons, which enhance our ability to serve customers in the Southeast."
"We have piloted a new sales app with will call functionality, which has reduced the time it takes customers to place an order by up to 90%."
Analyst Q&A 14
2027 margins and M&A
Q (Matthew Bouley · Barclays): Analyst asked how much more SG&A can be cut if single-family starts fall and whether the 2027 scenarios include those cost cuts. He also asked about M&A approach and details on Gleckler.
A: Management said they already reduced the business size with location closures, variable cost and overhead cuts, and will continue to act as the market dictates. On M&A, they view deals as modest, affordable versus cash flow, and see Gleckler as strengthening Florida with complementary products and team integration.
"We have executed against that, a whole variety of ways that we have made the business smaller to match the size of the market, whether it is location closures, variable costs, fixed overhead reductions." — Peter Jackson (CEO)
Gross margin near-term trend
Q (Chris · RBC): Analyst asked about sequential gross margin from 3Q to 4Q and how 2027 scenario outcomes affect gross margins at the high and low ends.
A: Management said margins were weak early in the year, then stabilized into a narrow band. For Q4 specifically, they expect the imputed number to be down slightly from Q3 due to squeeze from pullback, seasonality and deleverage in fixed costs and COGS.
"So more specifically with Q4, the imputed number is going to be down slightly from Q3 based on just the squeeze" — Pete Beckmann (CFO)
Competitive dynamics and commodities
Q (Speaker 5): Analyst wanted color on competitive behavior into year-end and next year, and specifics on commodity market behavior.
A: Management said competitive dynamics have largely stabilized but starts movements can trigger reactions. On commodities, lumber mills have behaved disciplined and recent mill cuts support pricing staying at profitable levels, though they do not expect meaningful price moves until demand clearly improves.
"I think what you have seen is pretty disciplined behavior out of particularly the lumber mills, maybe a little less so on the OSB side, but that has been moving recently as well." — Peter Jackson (CEO)
Gaining share without cutting price
Q (Charles Perron-Piché · Goldman Sachs): Analyst asked if they can grow share without aggressive price competition and how they service build-to-order and luxury end markets profitably.
A: Management said yes, they can gain share without racing on price by targeting market-level opportunities, aligning teams and supplier partnerships and leveraging service. On build-to-order, they see better visibility as an advantage and view it as normal business with modest benefit from visibility and value capture.
"The short answer is yes, and the way that we are going to execute on that, we will drill you into more of the details when we are together for Investor Day." — Peter Jackson (CEO)
Diesel and freight costs; category share
Q (Rafe Jadrosich · BofA): Analyst asked the impact of diesel and inbound/outbound freight on 3Q and thoughts for 4Q, and which product categories are driving recent share gains.
A: Management said diesel is meaningful and estimated directionally $40 million-$45 million a year for outbound diesel, and they use fuel surcharges and operational steps to offset it. They also said lumber share has picked up more on a percentage basis, helped by value-add bundling.
"Based on sort of the peak numbers, we're looking at it $40 million-$45 million a year on the cost of diesel outbound directionally." — Peter Jackson (CEO)
Market evolution since July and margins
Q (Ryan Merkel · William Blair): Analyst asked how the market has changed since July, whether demand fell in 4Q despite higher rates, and what drives gross margin in the 2027 framework.
A: Management said momentum hasn't shifted yet from mortgage rates but they expect a lag before starts and deliveries reflect rate changes. On gross margin, they reiterated the 2027 scenarios are modeling starts and commodities, note lapping effects, and said they are prepared to manage through a potentially challenging environment.
"The momentum for us hasn't shifted yet in response to the mortgage rates." — Peter Jackson (CEO)
M&A appetite and market competition
Q (Matt Johnson · UBS): Analyst asked if competition for M&A is easing, how they view appetite given leverage constraints, and whether more targets are coming to market.
A: Management said M&A remains a long-term growth path and they still pursue deals that fit their balance sheet and valuation discipline. They see fewer sellers and more modest multiples, but believe the current environment can present strategic opportunities for smaller, synergistic transactions.
"Broadly speaking, we still believe that M&A is going to be a long-term path for us to continue to grow." — Peter Jackson (CEO)
Normalized gross margin level
Q (David Manthey · Baird): Analyst asked what normalized gross margin would be today and whether contribution margins north of 20% are realistic if starts recover.
A: Management said normalized gross margin is anchored to normal volumes at 1,115 single-family starts and that 30% to 33% is a reasonable normal target. They also said contribution margins in the 20s are reasonable when utilization and pricing stabilize, with even stronger profitability when facilities add shifts.
"I think at that level, 30% to 33% is absolutely a reasonable normal." — Peter Jackson (CEO)
Scenario assumptions and downside margins
Q (Keith Hughes · Truist): Analyst asked why the scenario decremental margins seem extreme and whether they assume margin pressure eases in any scenario.
A: Management said the scenarios start by annualizing the current run rate and then model 5% and 10% market declines as an early pass, not including every responsive action. They cautioned that excess capacity could keep pressure on margins if starts step down further.
"We started with snap the line today, what is the business if you annualize it, so on our current levels." — Pete Beckmann (CFO)
Mix assumptions in 2027 scenarios
Q (Sam Reid · Wells Fargo): Analyst asked if the scenarios assume any mix changes, for example from share gains in lumber, and how that flows to gross and EBITDA margins.
A: Management said they did not model material mix change in the scenarios; the mix in the 2026 numbers is effectively carried into the 2027 scenario models.
"Well, in the scenarios, we didn't model any real change to the mix." — Pete Beckmann (CFO)
Multifamily outlook and labor effects
Q (Trevor Allinson · Wolfe): Analyst asked whether multifamily will flip to growth in 2027 and whether labor constraints are re-accelerating demand for value-added products in specific markets.
A: Management said multifamily had paused due to policy uncertainty and then resumed somewhat, but higher rates make the outlook mixed. They also said immigration enforcement and labor shortages are reducing available labor in many markets, which creates a medium-to-long-term tailwind for value-added services.
"I think in the medium to long term, it will certainly be good for us, and we see it as a tailwind on value add." — Peter Jackson (CEO)
Multifamily and R&R in scenarios
Q (Reuben Garner · StoneX): Analyst asked how multifamily and repair & remodel were treated in the 2027 scenarios and for comments on those markets.
A: Management said scenarios focus on single-family starts and commodities and they took a conservative approach to multifamily. They view R&R as flatter and said they are not banking on an increase, though economists have different views; both are smaller but still meaningful to total revenue.
"As we look through those scenarios, I think we- Without giving guidance, because it is not guidance, we took a conservative approach to the multifamily again." — Peter Jackson (CEO)
SG&A structural vs productivity
Q (Collin Verron · Deutsche Bank): Analyst asked whether higher SG&A relative to sales is structural or can be leveraged down over time and for broad views on longer-term SG&A.
A: Management said some input costs like labor, healthcare, rent and fuel have reset higher and can be structural. They also said adopting modern technology and better tools for teams offers meaningful productivity opportunities to reduce SG&A and improve COGS over time.
"A whole list of areas where by giving our team the best, most current tools, we think we're going to get better, more efficient, more effective at executing." — Peter Jackson (CEO)
Price assumptions and builder talks
Q (Phil Ng · Jefferies): Analyst asked whether the 2027 framework factors in price changes and whether early negotiations with large builders are baked into assumptions.
A: Management said customer discussions are ongoing and a real reset will happen around year-end into early next year; they included some assumptions on price run rate and market downturn in the numbers and will refine when they finalize guidance in February.
"There are a couple of assumptions in the numbers with regard to price. One is the run rate, the other is the market downturn." — Peter Jackson (CEO)