third quarter 2026
Filed Nov 3, 2026BlueLinx reported third-quarter net sales growth and substantially higher gross margin and Adjusted EBITDA, but posted a GAAP net loss as SG&A, interest expense and tax expense exceeded operating income.
Net sales increased 8.5%, gross margin improved to 16.1%, and Adjusted EBITDA increased to $31.7 million, while GAAP net loss was $0.6 million versus net income of $1.7 million in the prior-year quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesGAAP | $812.6M | – | 8.5% |
| Nine months 2026 net salesGAAP | $2.36B | – | – |
| Q3 2026 cost of products soldGAAP | $681.7M | – | – |
| Nine months 2026 cost of products soldGAAP | $1.97B | – | – |
| Q3 2026 gross profitGAAP | $131.0M | – | 21% |
| Nine months 2026 gross profitGAAP | $387.1M | – | – |
| Q3 2026 gross marginGAAP | 16.1 % | – | up 170 basis points |
| Nine months 2026 gross marginGAAP | 16.4 % | – | – |
| Q3 2026 selling, general, and administrative expenseGAAP | $105.9M | – | $16.6 million higher |
| Nine months 2026 selling, general, and administrative expenseGAAP | $309.5M | – | – |
| Q3 2026 depreciation and amortizationGAAP | $11.69M | – | – |
| Nine months 2026 depreciation and amortizationGAAP | $35.13M | – | – |
| Q3 2026 other operating, netGAAP | $2.48M | – | – |
| Nine months 2026 other operating, netGAAP | $5.59M | – | – |
| Q3 2026 total operating expensesGAAP | $119.1M | – | – |
| Nine months 2026 total operating expensesGAAP | $347.3M | – | – |
| Q3 2026 operating incomeGAAP | $11.86M | – | – |
| Nine months 2026 operating incomeGAAP | $39.80M | – | – |
| Q3 2026 interest expense, netGAAP | $9.52M | – | – |
| Nine months 2026 interest expense, netGAAP | $28.04M | – | – |
| Q3 2026 pre-tax incomeGAAP | $2.35M | – | – |
| Nine months 2026 pre-tax incomeGAAP | $11.75M | – | – |
| Q3 2026 provision (benefit) for income taxesGAAP | $2.97M | – | – |
| Nine months 2026 provision (benefit) for income taxesGAAP | $7.43M | – | – |
| Q3 2026 net (loss) incomeGAAP | −$625K | – | – |
| Nine months 2026 net incomeGAAP | $4.32M | – | – |
| Q3 2026 basic (loss) earnings per shareGAAP | $ (0.07) | – | – |
| Q3 2026 diluted (loss) earnings per shareGAAP | $ (0.07) | – | – |
| Nine months 2026 basic earnings per shareGAAP | $ 0.55 | – | – |
| Nine months 2026 diluted earnings per shareGAAP | $ 0.54 | – | – |
| Q3 2026 adjusted net incomenon-GAAP | $5.49M | – | – |
| Nine months 2026 adjusted net incomenon-GAAP | $16.24M | – | – |
| Q3 2026 Non-GAAP Adjusted Diluted EPSnon-GAAP | $ 0.68 | – | – |
| Nine months 2026 Non-GAAP Adjusted Diluted EPSnon-GAAP | $ 2.04 | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $31.71M | – | 42% |
| Nine months 2026 Adjusted EBITDAnon-GAAP | $90.83M | – | – |
| Q3 2026 Adjusted EBITDA marginnon-GAAP | 3.9 % | – | – |
| Nine months 2026 Adjusted EBITDA marginnon-GAAP | 3.9 % | – | – |
| Q3 2026 Adjusted EBITDA excluding import duty-related itemsnon-GAAP | $29.54M | – | – |
| Q3 2026 Adjusted EBITDA margin excluding import duty-related itemsnon-GAAP | 3.6 % | – | – |
| Q3 2026 net cash provided by operating activitiesGAAP | $44.68M | – | decreased by $13.9 million |
| Nine months 2026 net cash used in operating activitiesGAAP | −$1.37M | – | – |
| Q3 2026 free cash flownon-GAAP | $39.57M | – | a $13.1 million decrease |
| Nine months 2026 free cash flownon-GAAP | −$11.46M | – | – |
| Cash and cash equivalents as of October 3, 2026GAAP | $349.8M | – | – |
| Long-term debt as of October 3, 2026GAAP | $297.3M | – | – |
| Total debt and finance leases as of October 3, 2026other | $609.7M | – | – |
| Net debt as of October 3, 2026non-GAAP | $259.9M | – | – |
| Net debt excluding finance lease liabilities for real property as of October 3, 2026non-GAAP | $21.10M | – | – |
| Net leverage ratio as of October 3, 2026non-GAAP | 2.5x | – | – |
| Net leverage ratio excluding real property finance lease liabilities as of October 3, 2026non-GAAP | 0.2x | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Q3 2026 specialty productsPositive impact of Disdero product sales and higher pricing, partially offset by lower volumes. | $549.5M | – | 4.6% |
| Q3 2026 structural productsIncreases in pricing and volumes for both lumber and panels. | $263.1M | – | – |
| Nine months 2026 specialty productsNo nine-month segment sales driver was provided. | $1.63B | – | – |
| Nine months 2026 structural productsNo nine-month segment sales driver was provided. | $732.3M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter 2026 outlook
- Gross marginSpecialty product gross margin: 17.5% to 18.5%; structural product gross margin: 9.0% to 10.0%.
- NoteAverage daily sales volumes are expected to be slightly lower than the fourth quarter of fiscal 2025 and the third quarter of 2026.
Capital returns
- During third quarter 2026, the Company did not repurchase any shares of common stock.
- At quarter-end, $3.7 million remained under the $100 million repurchase program announced in October 2023.
- The separate repurchase program announced in July 2025 had its full $50 million remaining.
- Total remaining repurchase authorization was $53.7 million.
- Property and equipment purchases were $5.2 million, plus $1.3 million obtained through finance leases, primarily for fleet, facility and technology improvements.
What drove it
- Sales growth was attributable to both specialty products and structural products.
- Specialty sales benefited from Disdero product sales and higher pricing, partially offset by lower volumes.
- Structural sales increased from higher pricing and volumes for lumber and panels.
- Gross margin improved as specialty products gross margin increased to 18.7% from 16.6% and structural products gross margin increased to 10.7% from 9.3%.
- The quarter included a $2.2 million net benefit for import duty-related items.
- Operating cash flow reflected working capital management, although it declined due primarily to period-over-period net changes in inventory and the timing of accounts-payable payments.
Concerns
- GAAP net loss was $0.6 million, compared with GAAP net income of $1.7 million in the prior-year quarter.
- SG&A expense increased by $16.6 million, primarily due to Disdero, higher fuel and third-party freight expenses, and employee-related expenses.
- The quarter included an unusual inventory provision of $2.9 million for discontinued inventory resulting from a strategic brand and vendor change for a key product line.
- The fourth-quarter outlook calls for average daily sales volumes to be slightly lower than both the fourth quarter of fiscal 2025 and the third quarter of 2026.
- Net leverage ratio was 2.5x as of October 3, 2026, compared with 2.1x as of September 27, 2025.
What to watch
- Fourth-quarter specialty product gross margin guidance of 17.5% to 18.5%.
- Fourth-quarter structural product gross margin guidance of 9.0% to 10.0%.
- Average daily sales volume performance against management's expectation for slightly lower volumes.
- The effect of fuel, third-party freight and employee-related expenses on SG&A.
- Inventory and accounts-payable movements following the Q3 cash-flow decline.
- Execution of business and digital transformation initiatives, which contributed $2,369 to Q3 2026 Adjusted EBITDA add-backs.
Balance sheet and cash flow
- Available liquidity was $689 million, including $350 million of cash and cash equivalents and $339 million of undrawn revolving credit facility availability.
- As of October 3, 2026, total debt and finance lease obligations, excluding real property finance lease obligations, were $371 million, consisting of $300 million of senior secured notes maturing in 2029 and $71 million of finance lease obligations for equipment.
- Cash and cash equivalents were $349,817 as of October 3, 2026, compared with $385,843 as of January 3, 2026.
- Accounts receivable were $311,109 and inventories, net were $375,348 as of October 3, 2026.
- Net cash provided by operating activities was $44,684 in Q3 2026, compared with $58,616 in Q3 2025.
- Free cash flow was $39,572 in Q3 2026, compared with $52,669 in Q3 2025.
- Trailing twelve-month Adjusted EBITDA was $104,723 as of October 3, 2026.
Analysis
BlueLinx delivered Q3 net sales of $812,610, compared with $748,870 in the prior-year quarter. Growth was supported by both product categories. Specialty products generated $549,550 of sales, with Disdero product sales and higher pricing partly offset by lower volumes. Structural products generated $263,060 of sales, driven by higher lumber and panel pricing and volumes. The company nevertheless expects average daily sales volumes in the fourth quarter to be slightly lower than both the fourth quarter of fiscal 2025 and the third quarter of 2026.
Gross profit increased to $130,956 from $108,187, and gross margin improved to 16.1% from 14.4%. Specialty gross margin rose to 18.7% from 16.6%, while structural gross margin increased to 10.7% from 9.3%. The reported result includes a $2.2 million import duty-related net benefit and a $2.9 million unusual inventory provision. Excluding inventory and duty-related items, company gross margin was 16.2% compared with 14.7% in the prior-year quarter.
Higher gross profit did not translate into GAAP earnings. SG&A increased to $105,914 from $89,281, primarily due to Disdero, fuel and third-party freight, and employee-related expenses. Operating income increased to $11,864 from $9,966, but interest expense rose to $9,518 and the provision for income taxes was $2,971 versus a $292 benefit in the prior-year period. The result was a GAAP net loss of $625, compared with net income of $1,655. Adjusted EBITDA improved to $31,709 from $22,358, and Adjusted EBITDA margin rose to 3.9% from 3.0%.
Cash generation remained positive in the quarter but weakened from the prior year. Operating cash flow was $44,684 versus $58,616, and free cash flow was $39,572 versus $52,669, with the decline attributed primarily to inventory changes and the timing of accounts-payable payments. Liquidity was $689 million, including $349,817 of cash and $339 million of revolver availability. Net debt excluding finance lease liabilities for real property was $21,096 and the corresponding leverage ratio was 0.2x.
Capital allocation was focused on operating investment rather than buybacks. BlueLinx purchased $5.2 million of property and equipment and obtained $1.3 million through finance leases, primarily for fleet, facilities and technology. It did not repurchase shares during Q3, leaving $53.7 million of combined authorization. The fourth-quarter guide provides only segment gross-margin ranges of 17.5% to 18.5% for specialty products and 9.0% to 10.0% for structural products, alongside the expectation for lower average daily sales volumes.
Management, verbatim
We delivered year-over-year profitable sales growth at improved gross margins in our specialty and structural product categories in the third quarter.
Shyam Reddy, President and Chief Executive Officer
Our strategy and our investments in growth initiatives, operational excellence, and process improvements are helping us successfully navigate a challenging environment and drive long-term value creation.
Shyam Reddy, President and Chief Executive Officer
Strong operational execution and effective working capital management contributed to our strong cash flow during the third quarter.
Kelly Wall, Senior Vice President, Chief Financial Officer and Treasurer
Not in the filing
stated, not guessed- Fourth-quarter 2026 revenue guidance
- Fourth-quarter 2026 operating-expense guidance
- Fourth-quarter 2026 tax-rate guidance
- Fourth-quarter 2026 EPS or Adjusted EBITDA guidance
- Prior-quarter comparisons for Q3 2026 income-statement metrics
- A dividend declaration or dividend amount
- Previous-release outlook for comparison with reported results
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.