This was another year of solid growth, representing steady progress in an economy slowing emerging from recession. Only four dealers among the ProSales 100 saw sales shrink year-over-year from 2012 levels. The mood is optimistic, but cautious.
As housing starts slowly ascend, dealers have one thing on their minds: sustainable growth. It wasn’t a great year for everyone—some dealers were treading water—but the numbers illustrate decent gains and hint at good times to come.
This year’s ProSales 100 members logged total revenues in excess of $35 billion, up 18.2% from $29.7 billion in 2012. That’s the highest level of sales growth since 2004. When making sales, dealers sold to professional builders and contractors 87% of the time. In the past year, dealers added 103 new locations to bring the total to 3,674, a 2.9% increase from 2012. And the number of workers at those yards increased 8.6% to 74,985.
Last year’s ProSales 100 showed a favorable shift toward smaller dealers, some of which grew organically in the triple digits. This year, that trend continued, albeit at a slower pace—the top 10 dealers earned 62.6% of the year’s total sales on $21.99 billion. The big guys also lost ground in the total number of yards. Top 10 dealers owned 56.1% of the total number of locations (2,060), a 1.8 point decrease from 2012.
Even so, LBM’s titans dominated the market: This year’s top 10 dealers include almost all the same familiar faces as last year, and only one Top 10 dealer earned less than $1 billion in total sales. Driven by double-digit growth, BMC, Stock Building Supply, and SRS Distribution rocketed past Roofing Supply Group, which dropped out of the Top 10 to rest at the No. 11 spot. ABC Supply, which has dominated the top of the list since 2011, continues to out-earn its closest rival, ProBuild. But ProBuild is keen on recapturing the throne—it narrowed the total sales gap between the two companies from $1 billion in 2012 to a bit less than $700 million in 2013. Following close behind on the leaderboard is Carter Lumber (12) and US LBM (13), which grew sales 8% and 42%, respectively, against 2012 totals.
Despite the gained ground, only one dealer—Kodiak Building Partners, in Denver— managed to grow in the triple digits this year, and those gains were primarily driven by acquisitions. (More on Kodiak and its rapid growth on page 60.) Last year, small dealers flourished in a thawing market. This year, growth among smaller companies held steady, with growth a little less dramatic. Only seven dealers managed total sales growth above 50%.
That’s not to say that growth was stagnant. Just the opposite: Nearly three quarters of this year’s ProSales 100 list posted gains in total sales above 10%, and almost half of the list grew by 20% or more.
Even dealers that ended the year with shrinking total sales, such as E.C. Barton, in Jonesboro, Ark., lost ground only because it shuttered unprofitable locations.
If 2012 was a year of new growth, 2013 was a year of keeping pace with that growth. Though the market hasn’t bounced back to pre-recession levels, it’s on its way to recovery, provided housing starts continue to show gains.