On Oct. 31, Marietta, Georgia-based building products distributor BlueLinx reported a 24%, or $251 million, decrease in sales revenue in the third quarter of 2023 compared to the same period last year.

Specialty and structural products both logged sales declines compared to 3Q 2023. Still, the overall net sales decline was an improvement from the second quarter‘s 34% decline.

Gross profit was $139 million, a decrease of $50 million, or 26%, year-over-year, and gross margin was 17.2%, down 70 basis points from the same period last year.

Adjusted EBITDA was $50 million, or 6.2% of net sales, for the third quarter of 2023, as compared to $100 million, or 9.4% of net sales in 3Q 2022.

Strong Margins in Speciality Products

In this quarter, BlueLinx reported strong margins in its specialty product offering, which accounted for about 70% of its net sales of $810 million.

As it was in 2Q, net sales of specialty products — namely engineered wood, siding, millwork, outdoor living, specialty lumber and panels and industrial products — were still down decreasing $165 million, or 23%, to $559 million, compared to 3Q 2022. Deflation and lower volumes continue to impact sales, although the category logged a small improvement from the previous quarter (up from a 28% decrease).

BlueLinx officials said they remain focused on growing the specialty business.

Gross profit from specialty product sales was $111 million, a decrease of $41 million, or 27% when compared to the third quarter of last year. Gross margin was 19.8% compared to 20.9% in the prior year period.

Structural Products

Meanwhile, structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, also decreased $85 million, or 25%, to $251 million in the third quarter.

The decrease in structural sales was due primarily to the year-over-year declines in the average composite prices of framing lumber and structural panels of 26% and 6%, respectively. Gross profit from sales of structural products was $28 million, a decrease of $10 million from the prior year period, and gross margin was 11.3%, flat versus the prior year period.

“Through the first four weeks of the fourth quarter of 2023, specialty product gross margin was in the range of 18% to 19% with average daily volumes slightly down compared to what we experienced during the third quarter of 2023, but in line with historical seasonality,” company officials wrote. “Structural product gross margin was in the range of 9% to 10%, with average daily sales volumes slightly up compared to the third quarter of 2023.”

BlueLinx — which ranks No. 10 among Building Materials/Construction distributors in MDM’s 2023 Top Distributors Lists — earlier this year named a new Chief Financial Officer.