Simpson Manufacturing Authorizes $1.0 Billion Buyback As Price Hikes Carry Sales Growth
The connector maker's third-quarter sales rose 2.3% on pricing while volumes stayed flat, and it guided 2026 operating margin to 20.0% to 20.5%.
Simpson Manufacturing, which makes structural connectors and other wood and concrete construction products under the Simpson Strong-Tie brand, approved a new $1.0 billion share repurchase authorization and reported third-quarter sales growth driven by price, not volume, in an 8-K filed Monday. The new program replaces a $200.0 million authorization and has no expiration date.
Price did the work
Net sales rose 2.3% to $638.1 million, while income from operations edged up 0.2% to $141.0 million. Net income was $109.1 million, or $2.68 per diluted share, up 3.9% per share from $2.58. Gross margin slipped to 45.7% from 46.1%.
CEO Mike Olosky said sales were "supported by our pricing actions, while global volumes remained relatively flat." The investor presentation shows price added 2.5% to sales, volume 0.0% and currency took off 0.3%.
North America sales rose 3.8% to $502.0 million on price increases and higher unit volumes. Europe fell 3.4% to $129.9 million on lower volumes, partly offset by higher prices.
Steel costs and 2027 price increases
Olosky said the company faces "housing affordability pressures, higher steel costs and tighter steel availability." For 2027, he said, "we expect to take additional pricing actions to address the evolving cost environment."
For 2026, the company guided operating margin to 20.0% to 20.5%, a range that includes an projected $11.0 million gain on the sale of vacant land in Stockton, California. That sale closed in the fourth quarter rather than the third, so the gain lands there. It also expects capital spending of $80.0 million to $90.0 million and an effective tax rate of 25.0% to 26.0%.
A bigger buyback, and the cash behind it
The company bought back 352,346 shares at an average $188.25 in the third quarter, for $66.3 million, and about $165 million for the year through September 30. Olosky said the larger authorization reflects the board's confidence in strategy and cash flow. The program does not obligate any specific purchase and can be changed or stopped at any time.
Cash stood at $491.3 million on September 30, against $308.0 million of debt under a $900 million credit facility. The board also declared a $0.30 quarterly dividend, payable January 28, 2027, to holders of record on January 7, 2027.
Management hosts its earnings call Monday at 5:00 p.m. Eastern, where it may expand on the 2027 pricing plans.
Sources
- 8-K Filing — Simpson Manufacturing Co., Inc. (SSD) — SEC EDGAR
- Exhibit q32026ex991earningsrelease.htm — Simpson Manufacturing Co., Inc. 8-K exhibit — SEC EDGAR
- Exhibit exhibit992ssdpr-sharerep.htm — Simpson Manufacturing Co., Inc. 8-K exhibit — SEC EDGAR
- Exhibit exhibit993ssdinvestorpre.htm — Simpson Manufacturing Co., Inc. 8-K exhibit — SEC EDGAR
- Simpson Manufacturing Co., Inc. Announces New $1.0 Billion Share Repurchase Authorization — prnewswire.com
