BlueLinx experienced incremental growth in the third quarter of 2025, seeing a 0.2% increase in net sales compared to Q3 2024 while experiencing a 14% drop in gross profit.

During an earnings call held Nov. 5, Shyam Reddy, president and CEO of BlueLinx, said soft market conditions are affecting margins, but expressed content with the company’s overall performance in Q3, including its acquisition of Oregon-based Disdero Lumber Co.

“Our third quarter results demonstrated continued resilience as we implement our long-term profitable sales growth strategy,” said Reddy. “We were also pleased to see an increase in consolidated net sales, as well as an increase in specialty product net sales and volumes, while overall pricing continues to improve for this business.”

Overall net sales were $749 million for the third quarter. Reddy said market-driven price deflation for specialty products continues to stabilize, with pricing flat for the third quarter versus down by high single digits in Q3 2024.

Net sales of specialty products, which include engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, were $525 million, an increase of $6 million, or 1.2% compared to the third quarter of 2024. Though this represented approximately 70% of total net sales and 81% of gross profit, the gross profit declined 13% year-over-year.

“Unfortunately, price deflation in EWP partially offset the benefits of our net sales and volume increases in this category,” Reddy said.

The structural products segment, which includes lumber and panels, saw a net sales decline of 2% to $223 million due to lower panel pricing and lower volumes for panel and lumber compared to last year.

Duty-related adjustments increased the cost of products by $2.2 million to impact gross margins. The prior quarter included a net benefit of $3.5 million for import duty-related items.

BlueLinx said the duty items were related to charges in retroactive rates for anti-dumping and countervailing tariffs incurred by BlueLinx in previous fiscal periods but were adjusted by U.S. Customs.

“Not including these duty-related items in the current and prior year third quarter, specialty products gross margins would have been 17% and 18.7%, respectively,” said C. Kelly Wall, senior vice president, chief financial officer and treasurer of BlueLinx.

Adjusted EBITDA was $22.4 million, or 3% of net sales, which includes the import duty items expense of $2.2 million.

Gross profit was $108 million, a decrease of $17 million, or 14%, year-over-year, and gross margin percentage was 14.4%, down 240 basis points from the same period last year.

In the fourth quarter, BlueLinx’s first four weeks saw a specialty product gross margin in the 17% to 18% range. Average daily sales volumes were down compared to both Q3 2025 and Q4 2024.

BlueLinx is among other companies in the building materials and distribution sector suffering from a soft housing market. The company points toward housing affordability, elevated mortgage rates, short-term interest rates, construction labor availability, inflation, consumer confidence and other factors as affecting the housing, repair and remodel markets.

“Despite our success, higher profitable sales growth may be adversely impacted by tariffs, high mortgage rates and general economic uncertainty,” Reddy said.

Acquisitions and Technology

The third quarter included the $96 million acquisition of Disdero Lumber Co., a two-step specialty products distributor located south of Portland, Ore. Disdero’s trailing 12-month sales as of the end of September 2025 were approximately $100 million.

This pairs with BlueLinx’s Portland greenfield, which was established last year. Reddy said the company doubled warehouse space in the location due to better-than-expected demand.

“The acquisition of Disdero Lumber Company highlights our strategy to complement organic growth with disciplined M&A, and will significantly boost our presence in premium specialty products categories,” Reddy said. “We look forward to leveraging our scale and relationships to further expand this successful high-end brand.”

Wall said the acquisition is expected to enhance the margin profile of specialty products.

“We expect this transaction to be immediately accretive to earnings,” he said.

BlueLinx is also investing in artificial intelligence to bolster productivity. Reddy said the company has moved forward from piloting AI programs to providing most associates the ability to build agents via Microsoft.

“We believe our technology modernization will help us stand out and accelerate profitable sales growth and operational excellence,” he said.