Construction and building materials distributor Builders FirstSource reported its 2023 fourth quarter and full-year financial results on Feb. 22, which showed that sales continued to decrease year-over-year, but by a much slimmer margin than the previous several quarters. 

Meanwhile, total 2023 sales fell by nearly one-fourth compared to 2022 amid a downturn in single-family housing.

The Irving, TX-based company posted total 4Q sales of $4.2 billion, down 4.7% year-over-year, with organic sales down 1.3%. The overall decrease was a considerable improvement from declines of 21.3% in 3Q, 34.6% in 2Q and 31.6% in 1Q.

The company’s 4Q gross profit of $1.5 billion fell 1.4% year-over-year while gross margin jumped 120 basis points to 35.3%, which the distributor noted was driven by productivity and Multi-Family strength, partially offset by core organic margin normalization.

Builders FirstSource’s 4Q net profit of $351 million trailed the $385 million of a year earlier, while adjusted EBITDA fell 1.6% to $686 million on adjusted margin of 16.5% — up 50 basis points year-over-year.

Full Year 2023

For the full year, Builders FirstSource posted total 2023 sales of $17.1 billion, down 24.8% vs. 2022, primarily driven by a 17.3% decline in core organic sales and a commodity deflation of 11.1%, partially offset by a +3.6% impact from acquisitions.

Within the core organic sales decline, it was driven by a 24.1% decrease in Single-Family, while Multi-Family and Repair and Remodel/Other increased 20.3% and 0.7%, respectively. On a weighted basis, Single-Family reduced overall sales by 18.9%, partially offset by a 1.5% and 0.1% lift from Multi-Family and Repair and Remodel, respectively.

The company’s total 2023 gross profit of $6.0 billion fell 22.4% vs. 2022, while gross margin increased 110 bps to 35.2%.

Builders FirstSource had a 2023 net profit of $1.5 billion, down from 2022’s $2.7 billion. Adjusted EBITDA likewise fell 33.8% vs. 2022 to $2.9 billion, or 230 bps.

2024 Outlook

In providing 2024 full-year guidance, Builders FirstSource said it expects net sales to be in a range of $17.5 billion to $18.5 billion, with gross margin ranging from 30-33%. Adjusted EBITDA is forecasted in a range of $2.4 billion to $2.8 billion, with margin of 14.0-15.0%.

Other Notes

• The company said that in 2023, it delivered approximately $175 million in productivity savings related to operations excellence and supply chain initiatives, and expects to deliver $90 million to $110 million in productivity savings in 2024.
• Also on Feb. 22, Builders FirstSource announced the authorized repurchase of up to $1.0 billion of the company’s outstanding shares of common stock, which is inclusive of the approximately $200 million remaining outstanding in the prior share repurchase plan authorized in April 2022.