Building materials distributor BuildersFirst Source reported its 2024 fourth quarter and full-year financial results on Feb. 20, showing a decline in 4Q sales year-over-year and a drastic decrease in gross margin.

4Q Results

The Irving, TX-based company posted 4Q sales of $3.8 billion, down 8.0% year-over-year, impacted by lower core organic sales and commodity deflations, partially offset by acquisitions growth and one additional selling day. The decline followed a decrease of 6.7% to $4.2 billion in sales for 3Q24.

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Meanwhile, BFS’s 4Q gross margin decreased 300 basis-points year-over-year to 32.3%, which the company said was primarily driven by ongoing single-family and multi-family margin normalization. Sequentially, this was down 50bps from 3Q24.

4Q net profit of $190.2 million decreased by 45.8% year-over-year, while adjusted EBITDA decreased by 28.0% to $493.6 million, primarily driven by lower gross profit, partially offset by lower operating expenses after adjustments. Adjusted EBITDA margin fell by 360 bps to 12.9%, impacted by lower gross margin and reduced operating leverage.

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“Our fourth quarter and full year results demonstrate our resilience and ability to drive results in the face of a complex operating environment, while maintaining our focus on building for the future,” Builders FirstSource CEO Peter Jackson said in the company’s financial release. “The strength of our differentiated platform and our operational excellence initiatives drove a mid-teens EBITDA margin in 2024. Results this year are further proof that our success is driven by the dedication of our hardworking team members and support of our customers.”

2024 Results

For its full-year, BFS posted total sales of $16.4 billion, down 4.1% year-over-year, impacted by lower core organic net sales of 5.1% and commodity deflation of 1.8%, partially offset by growth from acquisitions of 2.1% and two additional selling days benefit of 0.7%.

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The company’s full-year gross margin decreased by 240 bps to 32.8%, driven by ongoing single-family and multi-family margin normalization. Net profit of $1.1 billion decreased 30.0% year-over-year from 2023’s $1.5 billion, impacted by lower gross profit, offset by lower operating and income tax expenses.

Adjusted EBITDA decreased 19.6% to $2.3 billion in 2024, driven by lower gross profit, but offset partially by lower operating expenses after adjustments. Adjusted EBITDA margin declined by 280 bps to 14.2%.

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Jackson added: “Our fourth quarter and full year results reflect our ability to execute our strategy by leveraging our exceptional operating platform and financial flexibility. Our business generates consistently strong free cash flow through the cycle, which we deploy under our balanced capital allocation strategy. This disciplined capital deployment framework remains in place: maintaining a fortress balance sheet, investing in organic growth, making value-enhancing acquisitions and returning capital to shareholders through share repurchases.”

2025 Outlook

BFS reported its 2025 outlook. The company said it expects sales to range between $16.5 billion to $17.5 billion, with a gross margin in the range of 30% to 32%.

The company added that it expects adjusted EBITDA to be between $1.9 billion to $2.3 billion on a margin between 11.5% to 13.0%.

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Builders FirstSource’s most recent previous acquisition was of Englewood, CO-based Alpine Lumber Company, announced on Dec. 23. The company gains 21 new locations across the Front Range of Colorado, western Colorado and northern New Mexico through the acquisition.

Builders FirstSource was No. 2 on MDM’s Top Distributor’s List for Building Materials/Construction.