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    LPX
    Earnings call· Mar 2026(Q1 FY26)

    LOUISIANA-PACIFIC Q1 FY26 earnings call LPX

    May 6, 2026 Source

    Executive summary

    Louisiana-Pacific Corporation Q1 FY26 — Strong Siding Performance Offsets OSB Weakness

    Louisiana-Pacific navigated a complex Q1 FY26, with strong pricing power in Siding and exceptional safety performance. Despite significant OSB price and volume headwinds, the company exceeded its EBITDA guidance. Management tempered full-year expectations due to persistent macroeconomic uncertainty, particularly in housing, but remains confident in its SmartSide value proposition and strategic growth initiatives.

    Highlights

    5

    • Achieved an exceptional safety performance with a total incident rate of 0.26 across 1.5 million hours worked.

    • Siding EBITDA was only $5 million lower year-over-year despite 10% lower net sales, demonstrating pricing power.

    • ExpertFinish, a high-growth product line, accounted for 12% of siding volume and 18% of siding revenue, with volumes flat year-over-year in a slowing market.

    • Secured two new builder partnerships, expecting to supply 100 million square feet of SmartSide to 15 of the top 25 U.S. homebuilders in FY26.

    • Delivered Q1 EBITDA of $82 million, exceeding the high end of guidance despite challenging market conditions.

    Concerns

    5

    • Net sales were down year-over-year, primarily driven by a $66 million reduction from lower OSB prices and softer demand.

    • OSB segment reported a $12 million EBITDA loss in Q1 FY26, with prices below EBITDA breakeven levels.

    • Full-year Siding EBITDA guidance was reduced by approximately $50 million from the midpoint, reflecting $35 million from volume and $15 million from oil-based costs.

    • Anticipate Siding volume declines year-over-year of about 10% in Q2 FY26, with full-year ExpertFinish volume growth in the mid-single digits, a deceleration from prior year.

    • Cash flow from operations was an outflow of $38 million compared to an inflow of $64 million last year, reflecting lower EBITDA and a log inventory buildup.

    Guidance & targets

    9
    CategoryTargetConfidence
    Q2 FY26 Siding Revenue
    $435 million and $445 million
    medium materiality
    High
    Q2 FY26 Siding EBITDA
    $115 million and $120 million
    medium materiality
    High
    Full-year FY26 Siding Revenue
    $1.64 billion and $1.66 billion
    high materiality
    Medium
    Full-year FY26 Siding EBITDA
    $410 million and $425 million
    high materiality
    Medium
    Full-year FY26 ExpertFinish volume growth
    mid-single digits range
    medium materiality
    Medium
    Q2 FY26 OSB EBITDA
    loss of about $10 million
    high materiality
    High
    Full-year FY26 OSB EBITDA
    similar results as reflected in the revised full year guidance
    high materiality
    Low
    Q2 FY26 Siding volume declines YoY
    about 10%
    medium materiality
    High
    Siding volume sequential improvements
    through year-end
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Siding
    Unit volumes were down due to a slowing market and increased channel inventory from Q4 price increases. Price increases (4-5 points from list, 2.5 points from mix, 2 points from rebate refinements) partly mitigated volume decline. EBITDA margin was helped by rebate and inventory dynamics, but would be closer to 26% without these factors. Combined price and volume resulted in a $42 million revenue reduction and $8 million EBITDA hit.
    Unit volumes: down 18% YoYSelling prices: up 9%Prime prices: up 8%ExpertFinish prices: up 10%ExpertFinish volume: flat YoYExpertFinish as % of siding volume: 12%ExpertFinish as % of siding revenue: 18%Incremental EBITDA on volume: ~50%
    		—down by 18%—28%
    OSB
    Prices were the dominant factor, falling significantly from Q1 last year and remaining below EBITDA breakeven. Lower volumes for both commodity and Structural Solutions reduced sales by $30 million and EBITDA by $10 million. The segment reported a $12 million EBITDA loss, better than guidance, due to efficient operations and cost control.
    Prices: 28% lower YoYPrices: below EBITDA breakeven levels
    		—28% lower—$12 million EBITDA loss

    Operational metrics

    16
    Adjusted earnings per share
    $0.38
    Q1 FY26

    Reported for the quarter.

    Cash balance
    $164 million
    Q1 FY26

    Cash ended the quarter at this level.

    Liquidity
    $900 million
    Q1 FY26

    Total available liquidity.

    Crude oil price impact on freight costs
    $0.03 per mileper $10 per barrel increase in crude oil
    annual

    Estimate for variable freight costs.

    Crude oil price impact on raw material costs
    $1.5 million to $2 million per quarterper $10 per barrel increase in crude oil
    quarterly

    Estimate for raw material costs, excluding logs. Minimal impact in Q1, but could trend towards run rate over next 2 quarters if prices stay elevated.

    Siding list price increase
    4 to 5 points
    Jan 1st

    Average increase from January 1st list price changes.

    Siding price increase from favorable mix
    2.5 points
    Q1 FY26

    Result of lower volume of shared products within prime product category and strong ExpertFinish volumes.

    Siding price increase from rebate refinements
    2 points
    Q1 FY26

    Includes final recognition of lower-than-expected rebate payments from Q4 last year and modestly lower accrual rates in 2026.

    Siding selling and marketing cost reduction
    $2 million
    Q1 FY26

    Attributed to timing.

    OSB mill overhead and SG&A savings
    $5 millionYoY
    Q1 FY26

    Contributed to cost control in a challenging environment.

    Log inventory build
    —larger-than-usual
    Q1 FY26

    Done as forward logging as oil prices rose and in anticipation of siding maintenance projects, serving as cost mitigation.

    Siding capacity for prime products
    400 million to 500 million feet
    current

    Capacity to support growth on the prime side.

    Shed channel inventory depletion
    85%
    Q1 FY26

    Percentage of excess inventory depleted, with sell-through rates holding up well.

    Vinyl siding price increases
    6% to 12%
    recent

    Reported by customers, narrowing the spread with SmartSide.

    Full-year Siding EBITDA guidance reduction
    $50 millionfrom midpoint
    FY26

    Breakdown of the reduction in full-year Siding EBITDA guidance.

    Volume reduction impact on Siding EBITDA guidance
    $70 million
    FY26

    Component of the full-year Siding EBITDA guidance reduction.

    Industry KPIs

    7
    MetricValueDetails
    Safety0.26
    Dividends$21 millionUSD
    Net debt leverage$164 millionUSD
    CAPEX capital program$200 millionUSD
    Volume production growthdown by 18%%
    End market demand driversweakening
    Adjusted underlying EBITDA$82 millionUSD

    Product announcements

    3
    ProductTypeDetails
    ExpertFinish line in Green Bay, Wisconsinexpansion
    ExpertFinish capacity at Bath, New York facilityexpansion
    ExpertFinish capacity in North Branch, Minnesotaexpansion

    Deals & partnerships

    1
    National homebuilders (15 of top 25 U.S. homebuilders)Supply agreement for SmartSide

    Secured two new builder partnerships, providing access to new markets, specifically in the Southeast and Southwest.

    Capital programs

    5
    ExpertFinish expansion (Green Bay, Wisconsin)ramping up

    Benefit: 50 million square feet or 25% to annual capacity

    Newest ExpertFinish line making excellent progress.

    ExpertFinish capacity (Bath, New York)planned

    Benefit: 20 million square feet of capacity

    Planned addition to support growing demand.

    ExpertFinish capacity (North Branch, Minnesota)intend to build

    Benefit: additional ExpertFinish capacity

    Acquired land for future capacity to support growing demand.

    Next major siding mill (Maniwaki)engineering work continues
    Period spend: $20 million to $30 million

    Benefit: largest prime siding facility

    Maniwaki is an option for conversion from OSB to siding, potentially becoming the largest prime siding facility. Engineering work is ongoing, pursuing parallel paths.

    Total Siding Capacity Expansionunderway$130 million

    Benefit: ExpertFinish and other siding capacity

    Total amount earmarked for siding capacity expansion, including ExpertFinish and the next major siding mill.

    Risks & headwinds

    6
    Volatile macro backdrop and geopolitical eventsQ1 FY26

    significant impact from winter storms and the conflict in Iran

    Mitigation: Near-term agility of supply chain and operations teams; longer-term algorithmic structure of strategic supply contracts.

    Softer OSB demand and lower commodity pricesQ1 FY26

    $66 million reduction in net sales and EBITDA

    Mitigation: Operating efficiently, minimizing costs, prioritizing safety; not planning to operate in an oversupplied market if prices persist.

    Crude oil price volatility and inflationary impactsQ2 FY26 and beyond

    modest increases in freight rates; potential $6 million to $8 million annual impact on raw material costs for every $10/barrel increase

    Mitigation: Supply chain agility; algorithmic supply contracts; Siding's lighter and more durable product allows for rail transport and more volume per truck.

    Elevated channel inventories (sheds)Q1 FY26, normalizing in Q2 FY26

    disproportionately felt in this segment; 85% of excess inventory depleted

    Mitigation: Monitoring sell-through rates; expecting normalization in Q2.

    Weakening housing market and consumer confidenceH2 FY26

    housing market weakened over the course of 2025; high input costs, falling consumer confidence, increasing interest rates magnifying uncertainty

    Mitigation: Tempering expectations for the second half; confidence in SmartSide value proposition and long-term share gains.

    Oversupplied OSB marketQ2 FY26 and beyond

    prices remain flat for last Friday's printed level, bringing OSB prices back under EBITDA breakeven levels

    Mitigation: Not planning to 'plug doggedly ahead' should these prices persist; focus on cost control and efficiency.

    What to watch in Q2 FY26

    5

    Siding volume decline

    Q2 FY26 and through year-end
    Currentdown by 18% year-over-year in Q1 FY26
    Targetabout 10% decline in Q2 FY26, with sequential improvements through year-end

    Why it matters

    Indicates market demand recovery and effectiveness of inventory normalization for the Siding segment.

    Current lower levels of market activity, we anticipate signing volume declines year-over-year in the second quarter of about 10%, with sequential improvements through year-end.

    Q&A highlights

    7

    Clarification on whether guidance includes oil price assumptions, the change in oil prices relative to Q4, and the split of impact between manufacturing and freight for Siding vs. OSB.

    Guidance reflects current understanding of annualized impact, incorporating near-term material inputs and supply contract dynamics. Most cost impact is on raw materials (75% in Siding), with freight being a much smaller component.

    “The cost of manufacturing through the raw materials is a much larger impact than freight. The full annualized impact of freight is relatively small, as Alan detailed, and we have more miles of transport for OSB just given the volume. So you can you can basically anticipate most of the costs hitting on the raw material side and in the manufacturing side. Within that, about 75% of the impact to cost of manufacturing will land in siding just because of the more raw material intensive recipes of Siding relative to OSB.”

    asked by George Staphos · answered by Aaron Howald

    2 min read7 chapters

    Detailed Narrative

    01

    Q1 Performance Highlights

    LP delivered Q1 FY26 EBITDA of $82 million, exceeding the high end of guidance, despite a challenging market. Net sales were down year-over-year, primarily due to a $66 million reduction from lower OSB prices and softer demand. Siding EBITDA was only $5 million lower despite 10% lower net sales, showcasing the pricing power of SmartSide.

    02

    Safety Performance

    The company achieved a world-class total incident rate of 0.26 across over 1.5 million hours worked in North America, with the Sagola, Michigan siding mill reaching two years without a recordable injury. This highlights a strong safety culture and operational discipline, with a goal of zero injuries.

    03

    Siding Market Dynamics

    The Siding business serves off-site construction, repair and remodeling, and new residential construction, each representing roughly one-third of volume. Elevated channel inventories from Q4 FY25 prebuys impacted Q1 volumes, particularly in sheds, but sell-through rates held up well, and inventories are normalizing in Q2. ExpertFinish continues to be a strong performer, with flat volumes in a slowing market and accounting for 12% of siding volume and 18% of siding revenue.

    04

    Strategic Growth in Siding

    LP is expanding ExpertFinish capacity with a new line in Green Bay, Wisconsin (adding 50 million sq ft or 25% annual capacity), another 20 million sq ft at Bath, New York later this year, and a newly acquired land in North Branch, Minnesota for future capacity. The company is also focused on national homebuilders, securing two new partnerships and expecting to supply 100 million sq ft of SmartSide to 15 of the top 25 U.S. homebuilders in FY26, representing a high single-digit share of their total exteriors market.

    05

    Crude Oil Price Impact

    LP estimates that each $10 per barrel increase in crude oil corresponds to a $1 million annual impact on freight costs and a $6 million to $8 million annual impact on raw material costs across North America, split 75-25 between Siding and OSB. Minimal impact was seen in Q1 due to supply chain agility and algorithmic contracts, but elevated prices could trend towards these run rates over the next two quarters.

    06

    OSB Market Challenges

    OSB prices were 28% lower year-over-year in Q1 FY26, resulting in a $66 million reduction in revenue and EBITDA. Lower OSB volumes further reduced sales and EBITDA by $30 million and $10 million, respectively. The segment reported a $12 million EBITDA loss, better than guidance, but prices remain below EBITDA breakeven. Management does not plan to operate in an oversupplied market if these prices persist.

    07

    Board Retirements

    Dusty McCoy and Ozey Horton retired from LP's Board of Directors, with management expressing gratitude for their insights and contributions to the company's culture and strategic transformation over the last seven years.

    AI-generated summary of the company’s earnings call. Not investment advice.