Boise Cascade Q1 2025 slides: earnings plunge 60% amid housing market headwinds

Introduction & Market Context

Boise Cascade (NYSE:BCC) revealed a significant decline in first-quarter earnings during its May 6, 2025, presentation, as the building products manufacturer continues to navigate a challenging housing market environment. The company’s stock has been under pressure, falling 3.83% on May 5 to $92.47, with premarket trading showing a further 2.67% decline to $90 ahead of the earnings call.

The results reflect broader industry challenges, with housing starts forecasts ranging between flat to mid-single digit year-over-year declines for 2025. Despite these headwinds, Boise Cascade maintains it is "well positioned to respond as the economic situation changes" and holds a "constructive view on long-term housing fundamentals."

Quarterly Performance Highlights

Boise Cascade reported first-quarter 2025 sales of $1.5 billion, down 7% from the same period last year. Net income plummeted to $40.3 million ($1.06 per share), representing a steep 61% decline from $104.1 million ($2.61 per share) in Q1 2024. Adjusted EBITDA fell 46% to $91.6 million compared to $168.5 million in the prior-year quarter.

As shown in the following financial highlights chart, both sales and EBITDA showed significant year-over-year declines across segments:

The company acknowledged these challenges in its executive summary, noting it delivered "solid performance considering the environment" while facing "constrained demand and near-term macro uncertainty."

Segment Performance Analysis

The Wood Products division, which produces engineered wood products (EWP) and plywood, experienced volume and pricing pressures. The EWP segment, including laminated veneer lumber (LVL) and I-joists, showed declining trends in both volume and pricing:

Similarly, the plywood segment faced challenges with both volume and pricing down compared to previous quarters:

The Building Materials Distribution (BMD) segment, which represents the majority of the company’s sales, reported Q1 2025 sales of $1.407 billion. The sales mix remained relatively stable with commodities at 37%, general line products at 42%, and engineered wood products at 21% of total sales.

However, BMD’s profitability has declined, with EBITDA as a percentage of sales dropping to 4.5% in Q1 2025 from 5.6% in Q1 2024, though still above the 2015-2019 average of 3.1%.

Capital Allocation Strategy

Despite the earnings pressure, Boise Cascade continues to invest significantly in its operations and return capital to shareholders. The company reported $53 million in capital expenditures during Q1 2025, with $31 million allocated to Wood Products and $22 million to BMD. For the full year 2025, the company plans capital expenditures of $220-240 million, indicating confidence in its long-term strategy.

Shareholder returns remained a priority, with $10 million paid in dividends during Q1 2025. The board authorized a Q2 quarterly dividend of $0.21 per share. Additionally, the company repurchased $54 million worth of shares in Q1 2025, with year-to-date April share repurchases totaling $71 million. Approximately 1.1 million shares remain available for repurchase under the current authorization.

This capital allocation strategy aligns with comments made by CFO Kelly Hibbs during the Q4 2024 earnings call, where he noted, "Capital allocation... we have the second year of for us a pretty heavy capital spending program."

Forward-Looking Statements

Looking ahead to Q2 2025, Boise Cascade provided several indicators suggesting modest sequential improvement in volumes but continued pricing pressure:

• EWP volumes expected to see mid to high single-digit sequential increases
• EWP pricing anticipated to experience low single-digit sequential declines
• Plywood volumes projected to increase by mid single-digits sequentially
• Plywood pricing for the quarter to date consistent with Q1 average, with the balance of quarter market dependent
• Sales per day running approximately 13% above the Q1 average of $22.3 million per day

The company’s outlook for 2025 remains cautious, noting that "end market demand expectations [are] difficult to predict." Management cited housing starts forecasts ranging between flat to mid-single digit year-over-year declines, consistent with CEO Nate Jorgensen’s comment during the Q4 2024 call that "We still are under built as a country."

The Q1 2025 results continue a trend observed in Q4 2024, when the company reported declining sales across divisions despite meeting earnings expectations. The housing market uncertainty, combined with operational challenges, suggests Boise Cascade will likely face continued headwinds in the near term while positioning itself for potential long-term industry recovery.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.