Boise Cascade's Q1 2025: Key Contradictions in Oakdale Mill Restart, EWP Pricing, and Margin Targets

Oakdale mill restart and production impact, demand and pricing dynamics in EWP, general line gross margin target, and EWP pricing and competitive dynamics are the key contradictions discussed in Boise Cascade's latest 2025Q1 earnings call.



Decline in Sales and Earnings:
- Boise Cascade's consolidated first-quarter sales were $1.5 billion, a 7% decrease from the same quarter in 2024. Net income was $40.3 million or $1.06 per share, compared to $104.1 million or $2.61 per share from the year ago quarter.
- The decline was attributed to constrained demand, uncertain trade policies, and difficult weather conditions, as well as a planned outage at its Oakdale, Louisiana facility that negatively impacted results.

Wood Products Segment Performance:
- Wood Products sales were $415.8 million, down 11% compared to Q1 2024. Segment EBITDA was $40.2 million, a substantial decrease from $95.6 million in the previous year.
- Lower EWP and plywood sales prices, reduced EWP volumes, and the impact of the Oakdale outage contributed to the decline.

Building Materials Distribution (BMD) Sales and Margin Pressures:
- BMD sales were $1.4 billion, down 7% from Q1 2024, with segment EBITDA at $62.8 million compared to $83.6 million in the prior year. The gross margin dollars decreased by $20.4 million, and the gross margin rate was 14.7%, a 40 basis point decline year-over-year.
- Decreased sales volumes and margins on commodity and EWP products, along with less leveraged costs due to slower sales activity, led to the margin pressures.

Capital Allocation and Shareholder Returns:
- Boise Cascade paid $10 million in regular dividends during the quarter with a quarterly dividend of $0.21 per share approved for the second quarter. The company repurchased $71 million of its common stock in the first four months of 2025.
- The focus on maintaining a strong balance sheet, investing in existing assets, and returning capital to shareholders continued, with flexibility retained for potential M&A opportunities.

Outlook and Market Dynamics:
- End market demand expectations for 2025 remain uncertain, with forecasts for housing ranging between flat to mid-single-digit declines. The company emphasized its ability to execute effectively across market conditions, with a strong balance sheet and long-term demand drivers for residential construction providing confidence.
- Despite macroeconomic uncertainties and elevated mortgage rates, Boise Cascade remains focused on strategic investments and strategic returns of capital to shareholders, bolstered by the strength of its balance sheet.