Building materials manufacturer UFP Industries (NASDAQ: UFPI) missed Wall Street’s revenue expectations in Q1 CY2026, with sales falling 8.4% year on year to $1.46 billion. Its GAAP profit of $0.89 per share was 16.8% below analysts’ consensus estimates.

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Will Schwartz, President and CEO of UFP Industries, commented, "After seeing stabilization earlier in the quarter, geopolitical tensions, unfavorable weather, and rising input costs added volatility to our operations in March, which accounted for more than half of the year-over-year decline in profits in the quarter. While we believe these headwinds will be temporary, we are actively working to offset these higher costs, particularly transportation. Despite the current backdrop, we have made considerable progress managing the things under our control and executing our strategies to position the business for long-term success. We are on track to deliver the remaining $25 million or more from our initial $60 million cost out program by year end. At the same time, we have continued to invest through the cycle. By combining greenfield expansion with disciplined M&A, we are strengthening our core businesses, introducing innovative products, and structurally lowering our cost base. I'm incredibly proud of our team for their continued hard work. Our scale, diversified portfolio, and deep customer relationships have consistently positioned us well during periods like these and we continue to strengthen our position to drive above market growth and returns when markets recover."

Company Overview

Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, UFP Industries struggled to consistently increase demand as its $6.19 billion of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and suggests it’s a low quality business.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. UFP Industries’s recent performance shows its demand remained suppressed as its revenue has declined by 6.2% annually over the last two years.

This quarter, UFP Industries missed Wall Street’s estimates and reported a rather uninspiring 8.4% year-on-year revenue decline, generating $1.46 billion of revenue.

Looking ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.

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Operating Margin

UFP Industries has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.2%, higher than the broader industrials sector.

Looking at the trend in its profitability, UFP Industries’s operating margin decreased by 3.8 percentage points over the last five years. Even though its historical margin was healthy, shareholders will want to see UFP Industries become more profitable in the future.

In Q1, UFP Industries generated an operating margin profit margin of 4.4%, down 1.4 percentage points year on year. Since UFP Industries’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for UFP Industries, its EPS declined by 1.9% annually over the last five years while its revenue was flat. This tells us the company struggled because its fixed cost base made it difficult to adjust to choppy demand.

Diving into the nuances of UFP Industries’s earnings can give us a better understanding of its performance. As we mentioned earlier, UFP Industries’s operating margin declined by 3.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For UFP Industries, its two-year annual EPS declines of 25% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q1, UFP Industries reported EPS of $0.89, down from $1.30 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects UFP Industries’s full-year EPS of $4.57 to grow 24.8%.

Key Takeaways from UFP Industries’s Q1 Results

We struggled to find many positives in these results. Its revenue missed and its adjusted operating income fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 2.6% to $90.50 immediately following the results.

UFP Industries’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).