Net income slid lower in the fourth quarter at Builders FirstSource on lower sales in a challenging operating environment. Net sales declined 4.7% to $4.2 billion, driven by a decline in core organic net sales and commodity deflation, and profits declined 8.8% to $350.7 million in the quarter.
“I’m proud of our fourth quarter and full year results, which demonstrated the strength of our broad product portfolio and continued execution by our resilient team members. Despite a challenging operating environment in 2023, which saw a significant reduction in single-family starts, we delivered a high-teens EBITDA margin,” Dave Rush, CEO of Builders FirstSource, said. “We accomplished this through operational rigor and by closely partnering with our customers to help address their pain points through use of our value-added solutions, solidifying our position as the easiest to do business with across the industry.”
In the fiscal fourth quarter, core organic net sales declined 1.3%, driven by single-family sales decreasing by 3.5%. Multifamily and repair and remodel sales increased 4.3% and 4.2%, respectively, in the quarter.
Gross profit in the quarter declined 1.4% to $1.5 billion compared to the prior-year period. The gross profit margin percentage increased 120 basis points to 35.3% in the fourth quarter, primarily driven by productivity and multifamily strength, according to Builders FirstSource. Adjusted EBITDA in the quarter declined 1.6% to $685.5 million while adjusted EBITDA margin increased by 50 basis points to 16.5%.
“Our fourth quarter and full year results demonstrate the effectiveness of our operating model through the cycle. Our fortress balance sheet, strong cash flow generation, and ability to prudently deploy capital to the highest return opportunities, including acquisitions and share repurchases, continues to position us for long-term success,” said chief financial officer Peter Jackson. “We are leveraging our sustainable competitive advantages and strong financial position to drive future growth and value creation for our shareholders.”
For the full fiscal year, net sales declined 24.8% to $17.1 billion, driven by a combination of core organic sale declines and commodity deflation. Single-family sales declined 24.1% in the period while multifamily and repair and remodel sales declined 20.3% and 0.7%, respectively.
Gross profit for the full fiscal year fell 22.4% to $6.0 billion while net income fell to $1.5 billion in 2023 from $2.7 billion in 2022. Adjusted EBITDA decreased 33.8% to $2.9 billion in the full fiscal year, driven by lower net sales. Adjusted EBITDA margin for 2023 decreased by 230 basis points to 17.0% on lower net sales and reduced operating leverage.
