Oct 29, 2026 earnings call — Freight headwind and Deckorators expansion
Net sales grew 11% to $1.73 billion, with volume up 6% and pricing adding 5%.
Revenue $1.7B (est $1.6B) · EPS $1.05 (est $1.20)
Key quotes
"Transportation costs were a new challenge across our industry in 2026, and we expect rates to remain elevated for the foreseeable future. Driver shortages and carrier capacity exiting the market under a tougher regulatory environment have pushed rates, excluding fuel, up 30% year-over-year."
"Demand for our Deckorators decking products still exceeds our production capacity, but we are closing that gap with our capacity expansion at Selma and our new greenfield facility in Buffalo."
"Earlier this week, we announced our plans to acquire Apache Products, a leading wood pallet manufacturer in the strategically important Texas and Louisiana Gulf region."
Analyst Q&A 6
Deckorators growth and distribution partners
Q (Kurt Yinger · D.A. Davidson): He asked whether dealer stocking, shelf space, and new distributor partners will keep Deckorators' strong ramp going. He also asked how the two-step distributor is incremental and whether continued unit growth should produce gross profit dollar gains given pricing pressures.
A: Management said excitement around Deckorators continues and they will announce a two-step distributor partner that fills geographic and penetration gaps and supports nationwide coverage. They said ProWood stocking is improved and they expect to do $50 million of additional decking sales in 2027 over 2026. They added that gross profit was pressured this quarter by elevated material costs in Site Built and PalletOne and by lumber price moves that negatively impacted ProWood; low-grade material remains elevated heading into Q4.
"We believe we'll do $50 million of additional decking sales in 2027 over the 2026 results that are certainly over market." — Will Schwartz (CEO)
Transport cost increase and distribution strategy
Q (Reuben Garner · StoneX): He asked whether species or grades drove the gross profit difference and asked for quantification of the drag excluding freight. He also asked how they plan to offset transportation inflation going forward and whether UFP will use its distribution to offset any lost MoistureShield dealers.
A: Management said the difference is more about grades — retail and construction use higher-end grades while packaging uses lower-grade lumber. They said transportation is a major drag: about a $49 million year-over-year increase in transportation costs net of fuel surcharges, $65 million expected for the full year, and another $16 million year-over-year increase expected in Q4. They called the transportation change structural, driven mainly by capacity exiting the market and regulatory changes, and said they are pursuing price offset actions and internal operating changes; on distribution they said they are comfortable with current positioning and will announce a partner to fill gaps.
"We think this is a structural change in baseline pricing for transportation, for freight." — Will Schwartz (CEO)
Packaging EBITDA and Site Built margins
Q (Ketan Mamtora · BMO): He asked how much of Structural Packaging's EBITDA decline was due to transportation versus other factors. He also asked whether Site Built's 12% growth reflects underlying demand or is driven by product and Frame Forward, and whether gross profit pressure from competition is stabilizing.
A: Management said packaging EBITDA weakness was primarily from higher material and transportation costs, partially offset by operational and mix improvements in Structural Packaging. They said Site Built's growth is not a market shift but helped by things like light gauge metal cladding and the Frame Forward solution that speeds jobs and removes labor. They said pricing was not a major factor in the gross profit decline; elevated material and freight costs and the inability to fully pass them on are the main challenges.
"Higher material costs and transportation costs were more than the EBITDA reduction." — Mike Cole (CFO)
Deckorators backlog and ProWood performance
Q (Andrew Carter · Stifel): He asked if the lower Deckorators backlog reflected cancellations or customer losses and what the POS trends look like pro forma with MoistureShield. He also asked why ProWood organic units were down and whether market share changed, and whether the company will cut investments if the market stays weak.
A: Management said the backlog fell because manufacturing increased, not due to cancellations, and the referenced customer loss was a small, non-material aluminum fence manufacturer. They said ProWood's unit decline reflects the repair and remodel market with no significant share gains or losses, and highlighted innovation like TrueFrame and internal Deckorators distribution as bright spots. On costs and investment, they said they will manage costs and take action in the short term but will also pursue opportunistic investments and remain disciplined on ROI.
"So first of all, the backlog coming down is really just the result of manufacturing going up." — Will Schwartz (CEO)
Deckorators ramp, new products, packaging
Q (Jeffrey Stevenson · Loop Capital): He asked if production ramp at the new Buffalo plant will continue to reduce the unshipped Surestone backlog. He also asked about the new Meridian and Elevate products with CoolDeck and whether CoolDeck will be used across Deckorators, and if packaging is seeing a top-line inflection.
A: Management said they will continue to eat into the backlog as production ramps, while building inventory for the spring selling season, and that both plants will be fully operational by year end. They said Meridian and Elevate will include CoolDeck technology, will be available in 2027, and they plan to roll CoolDeck into other products. They said packaging gains reflect long selling cycles and the result of design, engineering and investment over several years that create stickier customer wins.
"We're going to continue to be an innovator in the space, and you should expect more to come as we take that CoolDeck technology, roll it out to other products moving forward." — Will Schwartz (CEO)
Deckorators margins and M&A pace
Q (Kurt Yinger · D.A. Davidson): He asked whether Deckorators can shift from prioritizing production to improving margins in 2027 or if that takes longer. He also asked whether the active M&A pace should continue over the next 6–12 months.
A: Management said they expect to start seeing improvement in 2027 as automation and new technology combine with demand and they move from prioritizing production to efficiency. They said gross profit improvement from that is a meaningful driver next year. On M&A, they said the market has shifted, more attractive opportunities are appearing, and they will remain disciplined on ROI while continuing to pursue investments.
"No, I think you'll start to see improvement 2027 for sure." — Will Schwartz (CEO)