BMC sees Q2 sales staggered by deflation
Slumping commodity prices impact lumber and structural component sales.
BMC Stock Holdings (BMC) reported second quarter 2019 sales fell 5.2% to $946.4 million from sales of $998.5 million for the same period a year ago.
The Raleigh, N.C.-based pro dealer attributed the decline to commodity price deflation within lumber, lumber sheet goods, and structural components, which had a negative 8.9% impact on sales. Decreases were partially offset by a 2.8% sales increase derived from the acquisitions of Barefoot and Company and Locust Lumber, in addition to 2% organic growth.
The company also reported a net income of $35.7 million for the second quarter, down 11.6% from a net income of $40.4 million for the same period last year.
Last week, the company acquired Kingston Lumber. Located in Kingston, Wa. and serving the greater Seattle market, Kingston Lumber is a supplier of trusses and other building materials primarily to custom homebuilders and professional remodeling contractors. The company generated net sales of approximately $24 million in 2018.
The bottom line: Volatility in commodities cause sales to decline 5.2% to $946.4 million while profits fall 11.6% to $35.7 million.
What the CEO said: “Our investments in innovation, productivity, talent development and tuck-in acquisitions are helping us gain share in our value-added categories, enhance our footprint and customer mix in our local markets and drive a culture of continuous improvement. Importantly, during the quarter, these efforts enabled us to deliver organic growth in our value-added product categories, including 4.5% organic net sales growth in Structural Components before deflation and 5.3% organic net sales growth in Millwork, Doors and Windows, both of which solidly outpaced the underlying trends in single-family starts,” said Dave Flitman, president and CEO of BMC Stock.
Company info: BMC Stock Holdings’ full second quarter 2019 report can be read here.
BMC’s footprint includes serving 45 metro markets in 19 states, primarily in the South and West.
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