Construction and building materials distributor Builders FirstSource reported its 2023 third-quarter financial results Nov. 1, which showed net sales of $4.5 billion, a 21.3% decrease versus the same period last year. The decrease was primarily driven by a weaker housing market and commodity deflation, partially offset by growth from acquisitions, the company said.

The 21.3% drop was an improvement compared with declines of 34.6% in 2Q 2023 and 31.6% in 1Q 2023.

Gross profit margin percentage for 3Q 2023 decreased 10 basis points to 34.9%, while net income decreased 38.8% to $451.5 million, or $3.59 per diluted share compared to $4.72 in the prior year period. Adjusted net income decreased 34.4% to $533.6 million, or $4.24 per diluted share compared to $5.20 in the prior year period. Net income and adjusted net income per diluted share declined 23.9% and 18.5%, respectively.

Adjusted EBITDA dropped 30.6% to $813.3 million in 3Q, primarily driven by lower net sales. Adjusted EBITDA margin declined by 240 basis points to 17.9% attributable to lower net sales and reduced operating leverage.

“Despite industry volatility and macroeconomic headwinds, our resilient third quarter results reflect the strength of our value-added portfolio, broad footprint, and operational initiatives,” said Dave Rush, CEO of Builders FirstSource. “We remain confident in our 2023 outlook as we focus on being the best partner for our customers and executing our strategy to drive long-term growth.”

The company has completed five acquisitions in 2023, including two in September: Florida-based hardware retailer Frank’s Cash & Carry and Michigan-based Church’s Lumber Yards.