BlueLinx: Q4 Earnings Beat Expectations on Strong Margins and Volume Growth

BlueLinx Holdings Inc. (NYSE: BXC), a leading U.S. wholesale distributor of building products, reported fourth quarter and full year 2024 results that surpassed analysts' expectations. The company's strong margin performance, solid volume growth, and improved lumber pricing contributed to the earnings beat.

In the fourth quarter of 2024, BlueLinx reported net sales of $711 million, a decrease of $1.9 million, or 0.3%, compared to the fourth quarter of 2023. Gross profit was $113 million, a decrease of $5.1 million, or 4.3%, year-over-year, and gross margin was 15.9%, down 70 basis points from the prior year period. Despite the slight decrease in net sales and gross profit, BlueLinx's earnings per share of $0.62 beat the Zacks Consensus Estimate of $0.53 by $0.09.

BlueLinx's specialty products segment experienced solid volume growth during the quarter, contributing to the overall earnings beat. Net sales of specialty products decreased by $3.0 million, or 0.6%, to $484 million, primarily due to price deflation driven by external market conditions, partially offset by volume gains. Gross profit from specialty product sales was $88.7 million, a decrease of $5.7 million, or 6.1%, compared to the fourth quarter last year. Gross margin was 18.4% compared to 19.4% in the prior year period.

The company's structural products segment also performed well, with gross margins of 10.8% largely due to improved lumber pricing during the quarter. Net sales of structural products increased by $1.1 million, or 0.5%, to $227 million in the fourth quarter of fiscal 2024, and gross profit from sales of structural products increased by $0.6 million from $24.0 million in the prior year period. The increases in structural sales and gross profit were due primarily to improved pricing for framing lumber, partially offset by slight volume decreases.

BlueLinx's adjusted EBITDA was $21.5 million, or 3.0% of net sales, compared to $36.5 million, or 5.1% of net sales in the prior period. This represents a significant decrease of $15.0 million, or 41.1%, year-over-year. The main factors influencing this change include a decrease in gross profit and an increase in selling, general and administrative ("SG&A") expenses. Net cash generated from operating activities was $18.7 million in the fourth quarter of 2024, compared to $75.9 million in the prior year period, driven primarily by changes in working capital.