Canada's Stella-Jones Inc Q2 sales rise on volume growth in wood utility poles

Stella-Jones

06/08/2026 11:14

Overview
Canada infrastructure wood supplier's Q2 sales rose slightly but missed analyst expectations
Adjusted EPS for Q2 fell from prior year
Company cites higher costs, network optimization charges, and steel facility inefficiencies for margin decline

Outlook
Company expects full-year 2026 adjusted EBITDA margin below 17.5%
Stella-Jones targets adjusted EBITDA margin of 17.5%-18.5% for 2026-2028 outlook period
Company expects margin improvement in H2 2026 as cost pressures moderate

Result Drivers
UTILITY POLES VOLUME - Co said solid volume growth in wood utility poles and Brooks acquisition supported Utility Products sales
COST PRESSURES - Higher site-specific costs, fuel expenses, and operational inefficiencies at steel structures facility weighed on gross profit and margin
RAILWAY TIES AND LUMBER WEAKNESS - Lower volumes and prices for railway ties and residential lumber due to softer demand and unfavorable weather

Company press release: ID:nGNX5Ck8Dv

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Sales
Miss
C$1.04 bln
C$1.08 bln (8 Analysts)
Q2 Adjusted EPS
 
C$1.59
 
Q2 Net Income
 
C$61 mln
 
Q2 Gross Margin
 
17.90%
 
Q2 Gross Profit
 
C$186 mln
 
Q2 Operating Income
 
C$95 mln
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the forest & wood products peer group is "buy."
Wall Street's median 12-month price target for Stella-Jones Inc is C$93.00, about 17.5% above its August 5 closing price of C$79.18
The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 14 three months ago

Reuters Recommended Reads
Aug 5 - Canada's Doman Q2 revenue rises but misses estimates
Aug 5 - Canada's Acadian Timber Q2 sales fall as New Brunswick volumes decline
Aug 3 - Boise Cascade Q2 sales beat estimates on BMD higher volumes, price increase

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)