Macroeconomic headwinds and a weaker housing market drove year-over-year contractions in sales, profit, and adjusted EBITDA in the third quarter for Builders FirstSource.

“Despite industry volatility and macroeconomic headwinds, our resilient third quarter results reflect the strength of our value-added portfolio, broad footprint, and operational initiatives,” Dave Rush, CEO of Builders FirstSource, said in a prepared statement. “We remain confident in our 2023 outlook as we focus on being the best partner for our customers and executing our strategy to drive long-term growth.”

In the third quarter, net sales decreased 21.3% on a year-over-year basis to $4.5 billion, driven primarily by a weaker housing market and commodity deflation. Core organic net sales fell 13.5% year-over-year, driven by a 19.2% decline in single-family sales offset by a 6.4% increase in multifamily and 1.4% increase in repair and remodel sales.

Gross profit decreased 21.5% year-over-year to $1.6 billion. Gross profit margin percentage fell 10 basis points to 34.9%, primarily driven by core organic margin normalization. Net income for Builders FirstSource was $431.5 million compared to $738.0 million in the prior-year period. The 38.8% decrease in net income was primarily driven by lower net sales, according to the company.

“As we look toward 2024, we will maintain our best-in-class customer service, offer an attractive product mix, and launch our BFS Digital Tools to make the building process faster, more efficient, and more affordable,” Rush said. “We are committed to investing in automation and process improvements, which will continue to generate productivity savings, help solve the labor issues currently facing our customers, and solidify us as a trusted partner.”

Adjusted EBITDA in the third quarter decreased 30.6% year-over-year to $813.3 million, primarily driven by lower net sales. Builders FirstSource’s adjusted EBITDA margin fell 240 basis points to 17.9%

“We are maintaining a healthy balance sheet and prudently deploying capital to the highest return opportunities, which included acquisitions and share repurchases during the third quarter,” Peter Jackson, chief financial officer for Builders FirstSource, said. “We are leveraging our sustainable competitive advantage and strong financial position to drive future growth and value creation for our shareholders.”

In the third quarter, Builders FirstSource completed two acquisitions. Year-to-date, the company has completed five acquisitions with aggregate prior-year sales of approximately $350 million.