Boise Cascade's Q2 2025 Earnings Call: Key Contradictions on EWP Pricing, Inventory, and Market Dynamics

EWP pricing and demand forecast, inventory management and market dynamics, impact of Canadian tariffs on U.S. consumption, operating rates and pricing expectations, EWP volumes and performance gap are the key contradictions discussed in Boise Cascade's latest 2025Q2 earnings call.



Decline in Housing Starts and Earnings:
- U.S. housing starts decreased 1%, while single-family housing starts fell 8% year-over-year in Q2.
- Boise Cascade's consolidated sales decreased 3% to $1.7 billion, and net income dropped to $62 million or $1.64 per share, compared to $112.3 million or $2.84 per share in the prior year.
- The decline in housing starts and affordability challenges contributed to the reduced demand and earnings.

Wood Products Segment Performance:
- Wood products sales, including sales to the distribution segment, were $447.2 million, down 9% year-over-year.
- EBITDA for the segment was $37.3 million, down from $95.1 million in Q2 2024.
- Lower EWP and plywood sales prices, as well as lower plywood volumes, along with an unfavorable profit and inventory adjustment, led to the decrease in segment EBITDA.

BMD Sales and Gross Margin:
- BMD sales were $1.6 billion, down 2% from Q2 2024, with a gross margin of 15.4%, an improvement of 60 basis points year-over-year.
- The increase in gross margin was due to increased margins on general line products, despite decreases on commodity and EWP products.
- The performance was attributed to good execution and a focus on increasing sales in best-in-class general line products.

EWP and Plywood Volumes and Pricing:
- LVL volumes were up 8% year-over-year and 18% sequentially, while I-joists volumes were down 5% year-over-year but up 14% sequentially.
- Plywood sales volume was 356 million feet, down 8% year-over-year, with an average price of $342 per thousand, down 6% year-over-year.
- The fluctuations in volumes and pricing were influenced by operational factors such as outages, competitive pressures, and changes in customer inventory management strategies.