BlueLinx Holdings Inc (BXC) Reports Q3 2023 Earnings: Net Sales Down 24% Year-Over-Year
BlueLinx Holdings Inc (NYSE:BXC) reports Q3 2023 net sales of $810 million, a decrease of 24% compared to Q3 2022.
Net income stands at $24 million, with adjusted net income at $27 million.
The company announces a new $100 million share repurchase authorization.
BlueLinx ends the quarter with $470 million in cash on hand and a net leverage of 0.5x.
On October 31, 2023, BlueLinx Holdings Inc (NYSE:BXC), a leading U.S. wholesale distributor of building products, released its financial results for the third quarter of 2023. Despite a challenging interest rate environment impacting the housing and building products sector, the company demonstrated strong margins and announced a new $100 million share repurchase authorization.
Financial Performance
BlueLinx reported Q3 2023 net sales of $810 million, a decrease of $251 million, or 24% when compared to the third quarter of 2022. 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.
Net sales of specialty products were $559 million, a decrease of $165 million, or 23% when compared to the third quarter of 2022. This decline was due to a combination of deflation and lower volumes across several specialty categories. 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.
Capital Allocation and Financial Position
During the third quarter, BlueLinx invested $5 million of cash in capital investments used to improve its distribution facilities and upgrade its fleet. Additionally, the Company purchased approximately $18 million of the Companys common stock through open market transactions under its previous $100 million share repurchase program, which, as of early October, is now complete. The Board of Directors has approved a new share repurchase authorization of $100 million.
Outlook
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 was experienced during the third quarter of 2023, but in line with historical seasonality. 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.
Commentary
Shyam Reddy, President, and CEO of BlueLinx, commented on the results,
Our third quarter results demonstrate our ability to execute on our strategy, despite a challenging interest rate environment adversely impacting the housing and building products sector. We were pleased with our financial results, especially our strong margins in specialty products which accounted for about 70% of our net sales."
Andy Wamser, Chief Financial Officer of BlueLinx, added,
Our continued strong free cash flow generation contributed to ending the quarter with $470 million in cash on hand and net leverage of 0.5x. We remain focused on growing our higher margin specialty business, continuing to make improvements in our operations, and maintaining a consistent and balanced approach to capital allocation to drive long-term shareholder value."
Explore the complete 8-K earnings release (here) from BlueLinx Holdings Inc for further details.
This article first appeared on GuruFocus.
