- Sales Decline Q4 net sales fell to $1.33 billion (-9% YoY), driven by 7% unit decline and 2% price drop.
- Shareholder Returns $443 million spent on share repurchases (7% of shares), $82 million in dividends, and a 3% 2026 dividend increase.
- New Product Growth 7.6% of sales from new products; Deckorators sales rose 17%, led by 35% (wood-plastic composite) and 44% (Surestone) decking growth.
- Cost Efficiency Achieved $11 million core SG&A reduction in 2025 (-21% YoY), with $25M+ cost-out progress toward $60M annual target.
- Balance Sheet Strength $2.2 billion liquidity and $451 million free cash flow (2025), funding $300M+ M&A pipeline and $300–325M 2026 CapEx.
Segment Performance
The Retail segment sales were $444 million, a 15% decline compared to last year, consisting of a 13% decline in unit sales and a 2% decrease in prices. In contrast, the Deckorators unit saw a 17% increase in sales, driven by its wood plastic composite decking and Surestone composite decking, which increased 35% and 44%, respectively. The Packaging segment sales declined 1% to $370 million, while the Construction segment sales declined 10% to $440 million.
Cash Flow and Balance Sheet
The company's free cash flow for the year was strong at $451 million, providing ample resources to complete $443 million of share repurchases this year. The balance sheet remains strong, with $2.2 billion in liquidity, and recurring free cash flow providing flexibility to pursue meaningful M&A opportunities and continue returning capital to shareholders.
Valuation and Outlook
Given the current valuation metrics, with a P/E Ratio of 21.26, P/B Ratio of 2.01, and EV/EBITDA of 10.95, the market seems to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 6.1%. The company's guidance on Deckorators, expecting $100 million of increase in sales in 2026, heavily weighted towards decking, is a positive sign. However, the company's EPS miss and soft demand may temper expectations.
Management's Strategy
Management has taken disciplined steps to invest in the future success of the business while returning capital to shareholders. The company executed on share repurchases, paid dividends, and spent on maintenance and growth CapEx. The team has made progress navigating a tough environment and executing on its strategy to manage things within its control, including exiting underperforming businesses and reducing excess capacity.