Boise Cascade NYSE: BCC reported first-quarter 2026 sales of $1.5 billion, down 2% from the prior-year quarter, as the company faced continued demand uncertainty tied to geopolitical events, volatile mortgage rates, and severe weather. Net income fell to $17.8 million, or $0.50 per share, compared with $40.3 million, or $1.06 per share, a year earlier.
Chief Executive Officer Jeff Strom, who noted he is stepping into the CEO role, said the company “delivered solid results for the quarter” despite ongoing challenges around consumer sentiment and home affordability, which he called “the most significant headwinds for residential construction activity.” Total U.S. housing starts increased 1% year over year, while single-family starts declined 5%, he said.
Segment performance: BMD and Wood Products
Chief Financial Officer Kelly Hibbs said Building Materials Distribution (BMD) posted first-quarter sales of $1.4 billion, down 1% year over year. BMD segment EBITDA was $48.2 million, down from $62.8 million in the prior-year quarter. Hibbs said selling and distribution expenses increased $8.2 million, while gross margin dollars decreased $6.5 million, driven by “lower gross margins on all product lines, particularly EWP.”
Hibbs said BMD’s year-over-year sales decline reflected net sales price decreases of 3%, partially offset by net sales volume increases of 2%. By product line, general line sales rose 4%, commodity sales declined 5%, and engineered wood products (EWP) sales fell 7%.
On a sequential basis, BMD sales increased 2% from the fourth quarter of 2025, but Hibbs said severe weather affected activity at Southeast and Northeast distribution centers, which were closed for a combined 35 days in January and February. He said daily sales ran about $21 million in January and February, then “rebounded nicely in March” to $24 million.
BMD gross margin was 14.4%, down 30 basis points year over year, due to “EWP competitive pricing pressures as well as lower margins on general line products,” Hibbs said. EBITDA margin was 3.5%, down from 4.5% a year earlier and 4.1% in the prior quarter.
In Wood Products, Hibbs said sales (including sales to BMD) totaled $398.2 million, down 4% year over year, with segment EBITDA of $32.0 million, compared with $40.2 million a year earlier. The decline was driven primarily by lower EWP sales prices and higher per-unit EWP conversion costs, partially offset by lower per-unit OSB costs and higher plywood sales volumes and prices, he said.
EWP volumes and pricing, plywood improvement, and import dynamics
Hibbs said first-quarter I-joist and LVL volumes declined 5% and 1% year over year, respectively, while sequential volumes rose 16% and 8% as seasonal demand improved and channels restocked ahead of the spring building season. EWP sales prices declined about 7% year over year and were flat sequentially, he said.
Wood Products leader Troy Little said Boise Cascade has held EWP prices “relatively flat since Q3 of last year,” despite continued competitive pressure. He attributed the company’s performance to being “very strategic,” emphasizing service and selectively addressing regional pricing conversations. Little also cited a “strong order file” that has allowed the company to be selective on pricing.
On plywood, Hibbs said first-quarter sales volumes rose to 373 million feet from 363 million feet a year earlier, largely reflecting the restart of operations at the Oakdale mill in the fourth quarter of 2025. Average plywood net sales price was $343 per thousand in the first quarter, up 1% year over year and 4% sequentially. Hibbs attributed the recent price improvement to weather-related supply constraints in the South and reduced imports, noting that Brazilian imports declined more than 60% year over year in the first quarter.
However, Hibbs said following a late-February Supreme Court decision that invalidated the use of IEEPA to impose tariffs, higher import volumes are anticipated and could affect market dynamics in coming months. In response to analyst questions, Hibbs said the company is already expecting more Brazilian material to “show up at the ports,” though he noted a phenol disruption at a manufacturing site in Brazil may have delayed some flows. Strom added that some imports have arrived but “not significant enough that that would cause any major impact.” Later, Little estimated the initial spread between imported quotes and current market pricing was “about a 10% difference.”
Costs: freight, fuel, and key input inflation
On cost inflation, Little said diesel-related impacts are showing up across the business, with resin as the “biggest” input affected. He said Boise Cascade saw a resin price increase “probably ranging the 10% range” and also cited inflationary pressure in freight embedded in parts and materials. Jo Barney, who leads BMD, said diesel rose significantly during the quarter and that the company can pass much of it through in daily transactions via fuel surcharges, though program business can see short-term margin impact due to timing. Barney also said tight immigration policies have contributed to “a lack of trucks and drivers,” affecting rates and availability.
Hibbs provided additional context on Wood Products cost inputs, saying that glue, natural gas, and purchased electricity together represent “roughly…about 10% of Wood Products cost of sales,” and that approximately 10% increases in those inputs could inform the potential cost impact, assuming stable volumes.
Capital allocation, dividend, and share repurchases
Hibbs said Boise Cascade spent $40 million on capital expenditures in the first quarter—$23 million in BMD and $17 million in Wood Products—while maintaining its full-year 2026 capex range of $150 million to $170 million. He said about one-third of BMD’s 2026 spending is tied to growth projects, with the remainder focused on improvement and efficiency, replacements, and environmental compliance.
On shareholder returns, Hibbs said the company paid $10 million in dividends during the quarter and that the board approved a $0.22 per share quarterly dividend to be paid in mid-June. Boise Cascade repurchased about $91 million of stock in the first four months of 2026, including about $66 million in the first quarter. Hibbs said the company has repurchased about 12% of its outstanding shares since the start of 2024, with about $148 million remaining under its current authorization.
Second-quarter EBITDA outlook and demand visibility
For the second quarter, Hibbs guided to BMD EBITDA of $65 million to $80 million and Wood Products EBITDA of $32 million to $47 million, citing uncertainty in end-market demand and volatile cost inputs. He said BMD’s current daily sales pace is approximately 15% above the first-quarter pace of $22 million per day, with gross margins expected between 14.25% and 15%. If the current sales pace is sustained and margins land near the midpoint of the range, Hibbs said that would place BMD in the “low 70s” of EBITDA and lift EBITDA margin into the “mid-4s.”
For Wood Products, Hibbs said EWP order files show seasonal strength, with sales volumes expected to increase mid-single digits sequentially, while EWP pricing is expected to be flat to down low single digits. He said plywood volumes are also expected to rise mid-single digits sequentially, while quarter-to-date plywood price realizations were 8% above the first-quarter average. He said per-unit manufacturing costs are expected to be comparable to the first quarter, as higher volumes and early results from site improvement plans are expected to offset recent energy-related cost increases.
Strom said visibility into 2026 demand remains limited, noting that mortgage rates fell early in the quarter but geopolitical turmoil has increased volatility in Treasury and mortgage rates, adding uncertainty to the spring selling season. He said builders are taking “thoughtful approaches” to starts, home sizes, location, and inventory.
Still, Strom said the company remains confident in long-term structural drivers of housing demand, including undersupply, generational tailwinds, near-record homeowner equity, a decade of under-building, and an aging housing stock. He said Boise Cascade’s investments through the business cycle position it to “outpace industry growth as these market tailwinds materialize.”
In addition, Strom addressed a previously disclosed legal matter that he said was resolved the prior week. He described it as a legacy issue involving hardwood plywood purchases at a single distribution facility in Pompano, Florida, between 2017 and 2021 from a former U.S.-based supplier that improperly imported the products. Strom said Boise Cascade was not involved in the supplier’s scheme but did not follow certain internal processes that would have prevented the purchases, adding that the company has strengthened its processes going forward.
About Boise Cascade NYSE: BCC
Boise Cascade Company operates as a leading manufacturer and distributor of wood products and building materials in North America. The company's operations are organized into two primary segments: wood products manufacturing and building materials distribution. In its manufacturing segment, Boise Cascade produces a wide array of engineered wood products, including plywood, oriented strand board (OSB), lumber, particleboard and laminated veneer lumber (LVL), serving residential, commercial and industrial customers.
In its distribution segment, Boise Cascade sources and delivers building materials through an extensive network of distribution centers, servicing professional builders, remodelers, contractors and industrial customers.
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