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    LPX
    Earnings call· Jun 2026(Q2 FY26)

    LOUISIANA-PACIFIC Q2 FY26 earnings call LPX

    Aug 5, 2026 Source

    Executive summary

    Louisiana-Pacific Q2 FY26 — Siding Share Gains and Channel Normalization Offset OSB Weakness

    Louisiana-Pacific navigated a challenging Q2 FY26, demonstrating resilience in its Siding segment through normalized channel inventories and continued market share gains, while confronting significant weakness in its OSB business. The company is strategically reallocating capital, reducing OSB CapEx, and investing in Siding capacity expansion to support future growth, leveraging its strong liquidity position amidst market volatility. The call also marked the transition of CFO leadership from Alan Haughie to Aaron Howald.

    Highlights

    6

    • Siding sales increased 4% year-over-year, driven by 7% higher prices.

    • Siding achieved a 26% EBITDA margin, aligning with guidance.

    • Operating cash flow reached $140 million, boosted by seasonal working capital.

    • The company maintained nearly $1 billion in liquidity, including a $750 million undrawn revolver.

    • Prime SmartSide channel inventories normalized, with sell-through rates exceeding the prior five quarters.

    • Siding business is projected to return to year-over-year volume and revenue growth in Q3.

    Concerns

    5

    • Net sales decreased $90 million year-over-year to $664 million.

    • EBITDA declined $63 million year-over-year to $79 million.

    • OSB prices were $15 lower than the guidance algorithm, leading to projected negative EBITDA of approximately -$45 million in Q3 and -$120 million for the full year.

    • Siding margins faced unexpected headwinds from weather-related disruptions and constrained freight capacity.

    • Full-year CapEx guidance was reduced by $70 million to $320 million, primarily impacting OSB projects.

    Guidance & targets

    11
    CategoryTargetConfidence
    Q3 Siding Revenue
    $460 million to $470 million
    high materiality
    High
    Q3 Siding EBITDA
    $110 million and $120 million
    high materiality
    High
    Q3 Siding EBITDA Margin
    about 25%
    medium materiality
    High
    Full-year Siding Revenue
    affirm prior full year guidance
    high materiality
    High
    Full-year Siding EBITDA
    affirm prior full year guidance
    high materiality
    High
    Full-year Siding Margin
    affirm prior full year guidance
    medium materiality
    High
    Q3 OSB EBITDA
    approximately negative $45 million
    high materiality
    High
    Full-year OSB EBITDA
    approximately negative $120 million
    high materiality
    High
    Full-year Capital Expenditures
    $320 million
    high materiality
    High
    ExpertFinish Volume Growth
    mid-single digits
    medium materiality
    High
    New Siding Facility Build Time
    2.5 years from decision to first board
    low materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Siding
    Siding sales increased year-over-year due to higher prices, partially offset by lower volumes. EBITDA margin was in line with guidance despite unexpected headwinds.
    Prime volumes down 12%ExpertFinish volumes grew by 1%Prices 7 points higher
    		$464 million4%—26% EBITDA margin
    OSB
    OSB results were significantly impacted by lower prices and soft demand, leading to proportionately lower revenue and EBITDA. The company operated at a mid-to-high 70s utilization rate.
    Prices $15 lower than guidance algorithmPrices fell $12 or 6% since May callVolumes also fellUtilization rate mid- to high 70s
    		$200 million———

    Operational metrics

    22
    Adjusted Earnings Per Share
    $0.40
    Q2 FY26

    LP earned $0.40 of adjusted earnings per share in the second quarter.

    Cash on Hand
    $228 million
    Q2 FY26

    The company ended the quarter with $228 million of cash on hand.

    Total Liquidity
    just under $1 billion
    Q2 FY26

    Total liquidity at quarter-end, including the undrawn revolver.

    Undrawn Revolver Capacity
    $750 million
    Q2 FY26

    Part of the total liquidity at quarter-end.

    Capital Returned to Shareholders
    $21 million
    Q2 FY26

    Returned via dividends in the second quarter.

    SmartSide Volume Compound Annual Growth Rate
    almost 10%
    2011-2025

    SmartSide volume growth over a 15-year period, outpacing single-family starts.

    SmartSide Revenue Compound Annual Growth Rate
    14%
    2011-2025

    SmartSide revenue growth over a 15-year period, outpacing single-family starts.

    Single-Family Starts Compound Annual Growth Rate
    almost 6%
    2011-2025

    Average compound annual growth rate for single-family starts over a 15-year period.

    SmartSide Volume vs. Mid-COVID Peak
    up 10%vs Q2 2021
    Q2 FY26

    Comparison of SmartSide volume in Q2 FY26 to the mid-COVID housing peak in Q2 2021.

    SmartSide Revenue vs. Mid-COVID Peak
    up a hair over 50%vs Q2 2021
    Q2 FY26

    Comparison of SmartSide revenue in Q2 FY26 to the mid-COVID housing peak in Q2 2021.

    Single-Family Starts vs. Mid-COVID Peak
    down 18%vs Q2 2021
    Q2 FY26

    Comparison of single-family starts in Q2 FY26 to the mid-COVID housing peak in Q2 2021.

    Siding Volume Impact on Revenue
    $46 millionYoY decline
    Q2 FY26

    The impact of 11% lower Siding volumes on revenue year-over-year.

    Siding Volume Impact on EBITDA
    $24 millionYoY decline
    Q2 FY26

    The impact of 11% lower Siding volumes on EBITDA year-over-year.

    Siding Inflationary Cost Impact
    $14 millionEBITDA drag
    Q2 FY26

    EBITDA drag from inflationary costs and other items, with over half from crude oil price increases.

    OSB Price Impact on Revenue
    $67 millionYoY decline
    Q2 FY26

    Combined impact of lower prices and volumes on OSB revenue year-over-year.

    OSB Price Impact on EBITDA
    $46 millionYoY decline
    Q2 FY26

    Combined impact of lower prices and volumes on OSB EBITDA year-over-year.

    OSB Inventory and Other Benefit
    $9 millionYoY benefit
    Q2 FY26

    Mostly due to the nonrecurrence of lower of cost or market correction from a price drop in Q2 last year.

    OSB Utilization Rate
    mid- to high 70s
    Q2 FY26

    The operating rate for OSB mills in Q2, planned to be maintained in Q3.

    ExpertFinish Capacity Addition
    20 million feet
    later 2026

    Planned capacity addition at the Bath, New York facility.

    Full-year Capital Expenditure Reduction
    $70 millionfrom prior guidance
    FY26

    Reduction in full-year CapEx guidance, allowing flexibility to postpone nonessential projects, particularly in OSB.

    Siding Share of Total CapEx
    roughly 3/4
    FY26

    Siding business accounts for the majority of the total CapEx investment.

    Siding Share of Growth CapEx
    essentially all
    FY26

    Siding business accounts for nearly all of the growth-oriented capital expenditures.

    Industry KPIs

    3
    MetricValueDetails
    Price cost7points
    Order backlog—
    Orders bookings growth by vertical—

    Product announcements

    1
    ProductTypeDetails
    ExpertFinish Painting Facilitylaunch

    Deals & partnerships

    1
    Boise CascadeChanges in distribution partnerships

    Recent changes in distribution partnerships, including with Boise Cascade, are not expected to cause a lapse in coverage. LP is actively seeking new committed Siding partners, aiming to have them in place by October 1, 2026.

    Capital programs

    3
    Green Bay facility new lineunderway

    Benefit: ExpertFinish capacity

    The new line at the Green Bay facility is continuing to ramp up following the typical start-up process.

    Bath New York facility capacity additionunderway

    Benefit: 20 million feet of capacity

    LP plans to add another 20 million feet of capacity at its Bath New York facility later this year.

    North Branch, Minnesota ExpertFinish painting facilityunderway
    Start: end of June

    Benefit: largest and most efficient ExpertFinish painting facility

    Ground was broken at the end of June for what will be LP's largest and most efficient ExpertFinish painting facility.

    Risks & headwinds

    7
    Soft Housing MarketQ2 FY26

    feels like it's stuck in neutral

    Mitigation: Focus on Siding share gains and operational efficiency.

    Inflationary Impacts on Siding MarginsQ2 FY26

    $14 million EBITDA drag

    Mitigation: Expect to recover some impact later in the year; rolling raw material cost offset into next year's price increase.

    Weather-related Disruptionslate Q2 FY26

    record flooding in Manitoba

    Mitigation: Caused higher freight costs and unplanned inventory movements; mill is back at steady state.

    Constrained Freight Capacitylate Q2 FY26

    additional freight rate pressure

    Mitigation: Exacerbated by transportation infrastructure damage from floods, leading to higher freight costs.

    Challenging OSB Demand EnvironmentQ2 FY26 and outlook for FY26

    prices fell by about $12 or 6% since May call; Q3 EBITDA approx. negative $45 million; FY EBITDA approx. negative $120 million

    Mitigation: Aggressively pursuing opportunities to improve cost and efficiency, protecting assets, and optimizing network around mid-to-high 70s utilization; reducing CapEx in OSB.

    Raw Material Cost HeadwindsH2 FY26

    slightly more

    Mitigation: Will roll any raw material cost offset into full year price increase for next year.

    Building Code Changes in Wildfire Prone AreasOngoing

    small portion of the addressable market

    Mitigation: Monitoring closely, new product development initiatives, and educating local authorities on SmartSide value proposition.

    What to watch in Q3 FY26

    5

    Siding Volume and Revenue Growth

    Q3 FY26
    CurrentQ2 Siding volume down 11% YoY, revenue up 4% YoY
    TargetReturn to year-over-year growth

    Why it matters

    Verifies the effectiveness of channel inventory normalization and sustained market share gains in the Siding segment.

    Not to steal its thunder, but as he will lay out in our updated guidance, we expect the LP Siding business to return to year-over-year volume and revenue growth in the third quarter.

    Q&A highlights

    5

    Can you provide a breakdown of Q2 Siding volumes by end market (sheds, new construction, R&R) and expectations for Q3?

    The offsite (shed) segment rebounded over 30% from Q1 to Q2, though it's projected to be down 10-15% for the full year. Repair and remodel (R&R) is expected to be flat to slightly up, while other segments are flat to slightly down, aligning with underlying market conditions.

    “Fortunately, we saw that particular market segment rebound very nicely. I think we were up over 30% from Q1 to Q2.”

    asked by Ketan Mamtora · answered by Jason Ringblom

    2 min read6 chapters

    Detailed Narrative

    01

    Siding Market Dynamics and Share Gains

    LP's Siding business demonstrated strong performance in Q2 FY26, with Prime SmartSide and ExpertFinish channel inventories normalizing as anticipated. Distributor sell-through rates for Prime SmartSide were the highest in five quarters, and order intake rebounded significantly. The company highlighted a sustained long-term trajectory of market share gains, with SmartSide volume growing at a 10% compound annual rate and revenue at 14% since 2011, significantly outpacing single-family housing starts.

    02

    OSB Market Weakness and Strategic Response

    The OSB segment faced considerable challenges, with prices falling $15 below the guidance algorithm and an additional 6% since the May call, leading to projected negative EBITDA for Q3 and the full year. In response, LP is optimizing its OSB network at mid-to-high 70s utilization, focusing on cost and efficiency improvements. The company also reduced its full-year CapEx by $70 million, primarily impacting OSB projects, to manage through the weak market conditions.

    03

    Capacity Expansion and Investment in Siding

    To meet growing Siding demand, LP is actively investing in ExpertFinish capacity. The new line at the Green Bay facility is currently ramping up, and an additional 20 million feet of capacity is planned for the Bath, New York facility later this year. Furthermore, the company broke ground in North Branch, Minnesota, for what will be its largest and most efficient ExpertFinish painting facility, with Siding growth CapEx accounting for essentially all of the growth CapEx in the reduced full-year plan.

    04

    Capital Allocation and Liquidity

    LP generated $140 million in operating cash flow during the quarter, invested $59 million in capital projects, and returned $21 million to shareholders through dividends. The company ended Q2 with $228 million in cash and nearly $1 billion in total liquidity, including an undrawn $750 million revolver. This strong financial position provides significant flexibility to invest in Siding growth, independent of OSB market volatility🌐.

    05

    Leadership Transition in Finance

    The call marked a significant leadership transition with Alan Haughie announcing his retirement as CFO, effective September 1, after nearly seven years of service. Aaron Howald will succeed him in the role. Management expressed gratitude for Alan's pivotal contributions to LP's transformation and disciplined capital allocation strategy, and confidence in Aaron's ability to lead the finance organization forward.

    06

    Distribution Channel Changes

    Following recent news regarding distribution partnerships, LP stated that these changes were anticipated and do not expect any lapse in market coverage. The company maintains a two-step distribution model with multiple distributors servicing all markets. LP is actively evaluating new partners, aiming to have committed Siding partners in place by October 1, 2026, drawing on successful past transitions of similar or larger scale.

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