Louisiana-Pacific Corporation (LPX) Q4 2025 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2025 Louisiana-Pacific Corporation Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to hand it over to your speaker, Aaron Howald, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone. Thank you for joining us from the International Builders Show in Orlando to discuss LP's financial results for the fourth quarter and full year of 2025 as well as our outlook for 2026. Hosting the call with me this morning are Jason Ringblom, Chief Executive Officer; and Alan Haughie, Chief Financial Officer. After prepared remarks, we will take a round of questions, and then we will be available for follow-up calls and visits to LP's booth at IBS. During this morning's call, we will refer to a presentation that has been posted to LP's IR web page, which is investor.lpcorp.com. Our 8-K filing, earnings press release and other materials are also available there. Finally, I will remind you that today's discussion contains forward-looking statements and non-GAAP financial metrics as described on Slides 2 and 3 of the earnings presentation. The appendix of that presentation also contains reconciliations that are further supplemented by this morning's 8-K filing. Rather than reading those materials, I will incorporate them herein by reference. And with that, I'll turn the call over to Jason.

Thank you, Aaron, and thank you all for joining us. First of all, let me start by offering thanks and congratulations on behalf of the entire LP team to Brad Southern for a well-earned retirement after more than 25 years of transformative leadership at LP. It's truly an honor be succeeding Brad as LP's next CEO, and I'm confident that LP has the right strategy and the right team to make a seamless transition. We remain fully committed to driving growth, gaining market share, delivering product and process innovation and generating shareholder value in the years to come. 2025 was a difficult year for homebuilding and aspiring homeowners. Tariffs, economic policy uncertainty and deteriorating consumer confidence all contributed to affordability challenges. Housing starts decelerated throughout the year. In fact, single-family starts, a key demand indicator for both Siding and OSB were down roughly 10% in the third quarter according to the Census Bureau. Unfortunately, the Census Bureau has yet to publish fourth quarter housing data, but I suspect when that data is available, it will confirm further weakness. Despite these challenges, LP grew the Siding business by 8% for the full year, while expanding margins, particularly in ExpertFinish. In the fourth quarter, LP delivered $567 million in net sales, $50 million in EBITDA and $0.03 in adjusted diluted earnings per share. LP Siding business showed resilience in a weakening market. For the full year, we achieved 4% higher net selling prices and 4% higher sales volumes, resulting in 8% revenue growth. This allowed us to deliver a 26% EBITDA margin. Major contributors to these results were growth in the Shed segment, which reinforces the power of LP's diverse end-use applications and ExpertFinish, where not only has product innovation helped us expand the addressable market to reach new repair and remodel customers, but as Alan will describe in a few minutes, we have also seen significant margin improvement. 2025 saw a significant volume growth with our largest shed customers, particularly in the first half of the year. It's hard to be precise given the broad range of uses for SmartSide lap, trim and panels. But we estimate that shed volumes were up slightly more than 20% year-over-year. We estimate that products sold into new residential construction saw volumes decline by roughly 1 to 3 points, which significantly outpaced the decline in single-family starts. LP's repair and remodel sector was likely flat to up a 1 or 2 with impressive 18% growth in ExpertFinish. To be fair, Siding also enjoyed some geographic advantages in 2025. We have stronger market presence in the Upper Midwest, where construction activity remained comparatively strong and we were modestly insulated from softer markets in the Southeast due to our lower market penetration in this region. One consequence of recent market uncertainty is that dealers adopted a more cautious stance with regard to their inventory positions, holding fewer weeks of supply than normal. This adjustment coincided with a volume allocation prior to LP's price increase that we now realize was somewhat larger than necessary. Unfortunately, the combined effect of these phenomenon appears to have resulted in some pull forward at year-end, leading to elevated channel inventories with some of our 2-step distribution partners. Consequently, and as Alan will detail in the guidance section, Siding order files have been a bit weaker than anticipated to begin 2026. OSB results tracked housing demand more closely as they generally do with commodity prices softening alongside housing starts. Unfortunately, at their trough, OSB prices adjusted for inflation were the lowest we've seen in 20 years at LP. Despite that, LP's OSB mills operated safely and efficiently in the fourth quarter. We managed costs and capacity with care and discipline. And while we did not break even for the quarter, we did overcome softness in the second half of the year to achieve a positive EBITDA for the full year. As you all know, we can't control OSB prices, so we focus our efforts instead on executing our strategy. Speaking of strategic execution, the integration of LP under a Chief Commercial Officer and Chief Operating Officer structure rather than 2 business general managers is also beginning to show its value. For example, aligning OSB and Siding go-to-market strategies has enabled unique sales synergies that provide new pathways for ongoing Siding growth. Integrating operations has improved best practice sharing, uncovering opportunities for enhanced safety, OEE and system-wide capacity utilization. Operating efficiency in the OSB business increased by 1 point to 79%, which is remarkable given the operating challenges of a soft-demand environment. While total Siding OEE was flat year-over-year at 77%, OEE at LP's ExpertFinish facilities improved significantly. This not only contributed to our ability to come off of a managed order file a bit earlier than previously anticipated, but as Alan will detail in a moment, the extra volume helped deliver margin expansion. LP also executed our capital investments efficiently and flexibly, adjusting in response to slowing demand and accelerating ExpertFinish expansion to meet strong demand. And most importantly, we operated safely and responsibly. LP achieved a total incident rate of 0.62 in 2025, which was incrementally better than 2024's level. We also had 2 mills, Newberry, Michigan in Siding and Jasper, Texas in OSB reached 3 years without a recordable injury in 2025. As a result, LP earned the APA's Safest Company Award for the third year running. And with that, I'll turn over the call to Alan Haughie for a more detailed review of LP's financial results for the quarter and the year as well as a discussion of our outlook, after which we will take a round of questions.

Thanks, Jason. Slide 7 of the presentation shows the fourth quarter year-over-year waterfall for Siding. Revenue increased by 6% with prices, including mix effects, up 8% on a 2% volume decline. And while these price increases added $24 million to sales and EBITDA year-over-year, some of that benefit came from volume rebate thresholds not being met. But within this modest volume decline, ExpertFinish jumped 35%, while Primed volumes fell by 5%. And this creates a slight adverse mix effect within EBITDA because ExpertFinish still has a lower margin than Primed products. Having said that, ExpertFinish margins have improved by about 8 points year-over-year, thanks to leverage on increased volume and manufacturing efficiencies. The only other items to note for Siding in the fourth quarter chart are the absence of tariffs on the ExpertFinish we're importing into Canada and the nonrecurrence of last year's effects from production and cost timing due to the delayed maintenance project last fall. As a result, the EBITDA margin for the quarter was 25%, up 5 points year-over-year. For the full year, on Slide 8, net sales were up 8%, evenly split between price and volume, as Jason said, adding $131 million to revenue and $91 million to EBITDA. Selling and marketing expenses increased by about $11 million, while raw material cost tailwinds mostly offset freight and labor cost headwinds. SG&A increases, tariffs and other factors totaled about $23 million. As a result, Siding finished 2025 with $444 million in EBITDA, which is $54 million higher than 2024 with a 1 percentage point rise in the EBITDA margin to 26%. The OSB charts on Pages 9 and 10 are dominated by price as they so often are, sadly, this time to the negative. In the fourth quarter, unfavorable supply-demand dynamics resulted in multiyear price lows and volume reductions across the OSB portfolio. Now volume and price movements are harder to pass in OSB than they are in Siding, given its commodity nature, and they combined for a year-over-year decrease of $129 million in revenue and $95 million in EBITDA. Given these headwinds, the OSB operations team made the best of a very difficult market and found every opportunity for savings and efficiency. Their efforts and diligence allowed the segment to achieve $7 million of EBITDA for the year as detailed on Slide 10. So to summarize the financial results for the full year, we had $2.7 billion in net sales, $436 million of EBITDA and adjusted earnings per share of $2.65. These were the net effect of Siding growth and margin expansion, offset by lower OSB prices. As you can see on Slide 11, we consistently executed our capital allocation strategy. Adjusted EBITDA of $436 million generated $382 million of operating cash flow after $42 million in cash taxes and a small increase in working capital. We invested $291 million in sustaining maintenance and growth capital, and this was about $25 million less than we anticipated spending on the last call, made possible by the deferral of some of the nonessential projects in OSB as well as the decision to slow down capacity investments in Siding. We returned $139 million to investors through $78 million in quarterly dividends and $61 million in share repurchases. And at year-end, LP's cash balance was $292 million. And with an undrawn revolver of $750 million, LP has over $1 billion in liquidity. And just for the sake of housekeeping, we have $177 million of Board authorization remaining to repurchase shares, which finally brings us to guidance. LP's OSB guidance is algorithmic and relatively straightforward. So let me dispense with that first. Random Lengths prices have climbed recently to levels that are near enough to OSB breakeven that should we extrapolate current prices for the full year, OSB results will be very similar to 2025. I should also note, just for sensitivity modeling purposes, that we currently anticipate LP's utilization rate for the OSB to be a few points below our longer-term average rate of 85%. For the first quarter of 2026, LP's realization has lagged the rising market price, which is typical. So assuming prices hold at current levels, OSB EBITDA in the first quarter should be a loss of between $25 million and $30 million. Unlike OSB, our Siding guidance is not algorithmic. Rather, it is informed in the near term by our order file and in the longer term by macroeconomic data and customer sentiment. As Jason said in his remarks, an acute lack of that data, particularly housing starts, added uncertainty to our planning for volume allocations following the announcement of our 2026 price increase last October. So despite our best intentions, we overshot, resulting in some pull forward of demand from the first quarter of this year into the fourth quarter of last year, especially with our shed customers. Now to be fair, it's difficult to precisely separate this impact from that of a severe winter storm that hit the Southeast in late January. But suffice to say, as a result, our order file is weaker today and inventories are higher. So far in the first quarter, our order files contained significantly weaker shed activity than we experienced this time last year, with demand in the new residential construction and repair and remodel sectors roughly in line with the year-over-year decline in single-family housing starts, but exacerbated by our current inventory position. Accordingly, we currently anticipate total volumes in the first quarter will be down 15% to 20%, with shed volumes down 25% to 30% and new res construction and R&R volumes down about 10% to 15%, consistent with single-family starts. However, we expect average selling prices in the first quarter to be up 6 to 8 points as a result of list price increases and the positive mix effect of ongoing ExpertFinish. This would result in a first quarter year-over-year decline in net sales of 11% to 13% with the EBITDA margin coming in at between 23% and 25%. Now given the exit rate from Q4 of last year, flat housing consensus for 2026 implies meaningful improvement after a difficult first quarter. So presuming the consensus is correct and that starts do indeed end the year flat to 2025, we would expect to see demand improve sequentially, especially as shed demand returns to prior year cadence as inventories normalize. As such, by the year-end, we would expect Siding volumes to be down low single digits, selling prices to be up mid-single digits and a result, net sales to be up low single digits for an EBITDA margin of around 25% to 26%. With regard to capital expenditures, consistent with the same general market assumptions I just mentioned, we currently anticipate investing about $400 million, split equally between sustaining maintenance and strategic growth. The spending will probably be back-end loaded with about 60% of the investments occurring in the second half. Now should the market demand environment diverge meaningfully for better or worse, we have significant flexibility in our plans such that we could accelerate investments somewhat or reduce them substantially. And as I said a moment ago, LP certainly has the balance sheet to weather further market weakening or support accelerated investment as needed. We're facing a very uncertain market backdrop at the moment. However, rather than dwelling on what we do not know, LP's teams will focus on what we do know. LP SmartSide has consistently gained share with innovative products that expand the addressable market. That growth, coupled with the pricing power that comes with a premium specialty product brings leverage and margin expansion. And while not linear, that growth has, over time, outperformed the underlying markets we serve. We are confident that these fundamentals remain intact and that we have a long runway ahead of us and the right strategy to guide us. And with that, we'll be happy to take a round of questions, after which we look forward to seeing you at LP's booth at the International Builders' Show.

[Operator Instructions] Our first question comes from line of Matthew Bouley from Barclays.

Anika Dholakia on for Matt today. And first off, Brad, congrats and Jason, look forward to working with you. So first off, just wondering with 1Q Siding revenue guidance, it implies a step-up through the rest of the year to get to that $1.7 billion guidance, maybe somewhere in the mid-single-digit range. And so I know you guys talked about shed normalizing. Is that kind of the main factor that you're looking at in the year-over-year comps, or just any details around how you're thinking about the cadence of revenues?

Yes. Yes, it's -- there is -- we are expecting some improvement in shed. That's probably the dominant piece, but really, we're expecting improvement across the board as housing normalizes.

Okay. Got it. And then I'm curious on the affordability pressure today. Are you seeing any risk of maybe mix down to vinyl or other Siding materials that have a lower upfront cost? What are you hearing maybe from contractors? And if there's any differences in the builder by channel, either builder, R&R, if you're seeing differences in affordability there?

Thanks for the question. Yes, I would say, obviously, affordability remains a primary headwind and all the builder customers that we're working with are focused on meeting a price point that will obviously allow them to turn more homes. So there's been some -- a little bit of a move to vinyl, but we think with the broad product offering that we offer with SmartSide that there's tremendous value there. And with a relatively low share position, there's plenty of opportunities for us to continue on our growth trajectory.

[Operator Instructions] Our next question comes from the line of Ketan Mamtora from BMO Capital Markets.

Coming back to Siding, Jason, can you talk a little bit about what you are seeing in terms of demand in your ExpertFinish product? I saw volumes were pretty good in Q4. Are you still in allocation on that business? Any trends you can talk to?

Thanks, Ketan. Appreciate the question. In regards to ExpertFinish, what I would say is macro trends remain in our favor here. Labor is tight, labor is expensive. Homeowners expect a durable and resilient solution when -- that comes with a warranty. So our value proposition for ExpertFinish and ExpertFinish naturals really addresses all of those needs. And as a result, we're continuing to see this product category outperform in both new construction and repair and remodel. In regards to the allocation question, we did come off allocation, I believe, February 1, so a couple of weeks ago. That's really due to the OEE improvements that we were able to realize across our network. We thought that we would have to wait until our new Green Bay facility came online in early Q2 of this year. But through great work from our operations folks, we've been able to come off slightly in advance of what we had planned on.

Understood. That's helpful. And then can you remind us on how you are thinking about sort of additional capacity in Siding. Last quarter, you talked about sort of Maniwaki as being one of the options. How should we think about sort of time line on that? And in the meantime, how are you all thinking about managing production in OSB?

Yes. I'll start with Siding and just say we're very excited to be ramping up our new 70-million-foot line in Green Bay in early Q2. Very excited about that. In regards to broader capacity expansion opportunities, what I would say is we are continuing the detailed engineering work for future ExpertFinish and Primed capacity expansion projects. And some of that capital spend is in the figures that Alan shared with you earlier, obviously, a little bit more back-end loaded. But big picture, we want to be prepared to execute with projects that are essentially ready for plug and play when the timing is appropriate with a heavy bent towards being early versus late. And the second question, Ketan, I believe, was around how we're managing OSB capacity. And I would say largely consistent with what we've done in prior years, very focused on managing capacity to demand. We're very pleased to see the nice rebound in prices that we've realized to begin the year. We've been able to additionally keep a healthy order file across our network. So it certainly feels more optimistic that supply and demand are a little bit more in balance than they have been for the majority of last year.

Our next question will come from the line of George Staphos from Bank of America Securities.

This is Brad Barton on for George. And Jason, congrats on the new role. We look forward to working with you.

Thanks, Brad.

Just starting off, I know you touched a little bit on vinyl and affordability concerns and maybe some shifts there. But could you speak to more of the broad competitive environment that you're seeing in Siding right now?

Yes. What I would say, Brad, is broadly, we're very confident that we are gaining share in all of the segments that we focus on. I think there's strong evidence of that. If you look back at the last couple of years with '25 supporting that as well. Right now, obviously, with starts checking up the back half of 2025, there's -- it comes with its challenges. But again, we feel like in the new construction and Repair and Remodel segments, in particular, we've got a relatively low share position and a very large field sales organization that's focused on winning new customers. And that doesn't stop in a softer market, and we believe there's plenty of those opportunities in front of us.

Great. And just a follow-up. As you bring ExpertFinish capacity online here, can you speak to how you'll have to ramp your marketing spend and investments, both in terms of the time line and the magnitude maybe compared to the $11 million investment that you saw in 2025?

Yes. So what I would say is over the course of the last several years, you've seen an increase in both, I guess, marketing spend as well as the addition of additional field sales resources to support the growth of ExpertFinish. We did not put in any of that on pause as we experienced allocation back in September of -- or October of last year. So those investments will continue going forward. And again, we're very pleased with the growth we're seeing in ExpertFinish and excited to bring on one of our newest state-of-the-art lines in Green Bay, Wisconsin.

Great.

[Operator Instructions] Our next question will come from the line of Mark Weintraub from Seaport Research Partners.

So last year, you mentioned sheds up a little bit better than 20% by your best estimate, obviously slowed in the first quarter. Just wondering what are you embedding for sheds for the full year in '26 versus 2025? And maybe to the extent that you have information on where would you say your shed business was relative -- last year relative to, say, the last 10 years or whatever you think would be an appropriate time frame given there's been lots of ups and downs with the pandemic, et cetera?

Yes. I'll start with the first part of the question. What I would say is in regards to shed, there's always been a bit of a lumpiness to our order intake. And although inventories are higher than we anticipated. What we are hearing anecdotally from several of our largest shed fabricators is that underlying demand in the segment remains on a firm footing and trending very similarly to 2025 levels. So this positive news also coupled with some new product innovations, specifically our everyday flooring series and SilverTech roofing that we launched to begin the year, we feel like we can get back to a normal trajectory pretty quickly once inventories are depleted throughout the first quarter of this year.

And so I'm just -- because you're up 20%, I think you suggested last year. So was that just getting you to what you consider to be normalized? Or was that substantially better than what you consider normalized to be?

Yes. So last year, I would say it was a little bit of an anomaly because our shed distributors came into '25 with inventories very lean. So we had an inventory build throughout Q1 and Q2, and then obviously overshot the allocation prior to the 2026 price increase. So we feel like the underlying demand, again, is very stable in shed. And with some of the new products that we brought to market, we feel like there's growth opportunity in that segment, even though we own a relatively high share position.

[Operator Instructions] Our next question comes from the line of Steven Ramsey from Thompson Research Group.

I wanted to start with higher Siding EBITDA in the guidance and then breakeven OSB. Does that point to operating cash flow being somewhat near the 2025 results? And if that's so, the CapEx points to free cash flow being roughly breakeven. Maybe you can talk to the assumptions there on free cash generation.

No, no, no. I can add to that. That's about right. Yes. You nailed it.

Okay. Sounds good. Appreciate that. And then I wanted to think about if there's an expected pace on the Siding margin ramp through the year, make sure I understand this last year or 2, Q1 and Q2 EBITDA margin were in the same zone. Is it expected to be a steeper ramp upward going through '26?

Yes. Think of it as more seasonal. So we had very strong Q1 and Q2 last year. Hence, the seasonality was tilted towards that first half -- I'm sorry, the seasonality of the volume. And so volume provides such huge leverage that the cadence of the EBITDA margin while being on a modestly rising curve will follow the seasonality of volume. And it's really -- that's really the factor that most influences it. It's the leverage we get from the volume.

[Operator Instructions] Our next question will come from line of Kasia Trzaski from TD Cowen.

It's Kasia. Great effort though. So I'm on the call for Sean Steuart from TD Cowen. First question is around Siding. Can you comment what kind of Siding volume pull-through you're seeing from the homebuilder channel right now? And just provide broader commentary about how any specific homebuilder relationships might be evolving.

Sorry, Kasia, you cut out a bit on the -- the keyword [indiscernible] of the sentence. Could you repeat the question please?

Can you hear me better now?

That's much better, yes. Thank you.

Okay. Great. Question was around Siding. I'm curious about any thoughts on what kind of Siding volume pull-through you're seeing the channel build up notwithstanding from your homebuilder channel? And then just if any you can provide any broader commentary about how any specific homebuilder relationships might be evolving?

Yes, I'll take that one. Thanks for the question, Kasia. What I would say is just speaking to the homebuilder community, it's very different depending on what region we're talking about. I mean, certainly more strength in the northern markets where historically Siding has been strongest and softer in the Southeast Texas, some Western markets as well. So it depends on geography. What I would say just in terms of where we're at with our relationships, I mentioned earlier the integration of LP. We are really focused on leveraging our full portfolio of solutions to drive growth in the Homebuilder segment. And we know we're a very relevant supplier to this market. And that strategy is allowing us to offer greater value, be more creative and responsive to our customers' needs. So we're still in the early stages, but we're very encouraged by the reception that we've received from builders in response to the integration of LP.

Okay. And I just want to make sure I didn't mishear earlier. Did you say that the inventory buildup in the channel right now, you expect that to unwind over the course of Q1, bringing us back to more of a normalized steady state in Q2?

Yes, I'll shed a little bit of light on that. So we believe that the dealer channel, those closest to the builder did not necessarily increase inventories throughout the fourth quarter. They're focused more on working capital. However, our 2-step customers, which is the folks we transact with most, they took advantage of the allocation in advance of the price increase. And we see that in terms of their inventory reporting requirements looking backwards. So based on what we see, roughly 2 to 3 -- 2 to 4 weeks of inventory at the 2-step level, we do believe that, that can be consumed heading into Q2 just with the traditional or historical uplift in seasonal demand heading into the building season. So yes.

Okay. Got you. That's helpful context. And last one for me on OSB. The segment EBITDA margins of negative 29%, is that largely attributable to the low mill operating rates in Q4, which presumably would have had a significant impact on your overall mill cost structure? Or are there any lumpy items in there? And in particular, what I have in mind is any onetime inventory write-downs, things of that nature?

Well, there is a -- the only inventory write-down that occurs is a mark-to-market on inventory that we carry on the books because the selling price is at times lower than the standard carrying cost, but nothing exceptional or out of the ordinary or that hasn't occurred at any various points over the last 20 years.

We did have a couple of reasonably large maintenance projects in the quarter that added a bit of expense, but I think it was mostly utilization rates and price that drove it.

Yes.

[Operator Instructions] Our next question will come from the line of Susan Maklari from Goldman Sachs.

My first question is staying on OSB. Can you talk a bit about how you're thinking of the outlook for demand? The builders have largely talked about their starts this year being up low single digits. What does that imply in terms of the potential ramp for OSB in there? And then can you talk about your approach to capacity relative to that?

Thanks, Susan. Appreciate the question. What I would say, I hate to sound redundant, but I mean, our focus really truly is on matching our supply with customer demand. As I mentioned earlier, we've seen a nice rebound to begin the year, but we do feel like it's a supply-driven rebound. A couple of our competitors announced mill closures in Canada. There's also been some maintenance outages and some unscheduled downtime associated with the winter storm that I think is playing into the favorable pricing environment. So I do think looking forward that we'll need an improvement in demand to stay in balance as we head into Q2 and Q3. But I'm optimistic that, that will carry through as we head into the building season.

Okay. That's helpful. And then maybe turning to the margin in the Siding segment there. Can you talk a bit about what you're seeing just in terms of input costs, freight? And how should we think about any start-up costs that are associated with Green Bay and how that will flow through as well?

We certainly are -- in our guidance for the full year Siding EBITDA margin, we've included some significant inflation. It's about $20 million of raw material inflation, which is on our resin and paper overlay, largely contractual, so I mean at this time. So $20 million of raw materials plus about $7 million of labor and then some modest freight inflation. So that inflation is baked into the full year margin. We'll see some of that already baked in, in Q1. What was the other part of the question?

Ramp-up costs for Green Bay.

Nothing significant.

[Operator Instructions] Our next question will come from the line of Kurt Yinger from Davidson.

Great. Appreciate it. Jason, you had referenced the portfolio solutions approach. I was just hoping maybe you could talk about a couple of examples of how you're marketing that with the Siding business and kind of the value-add component of that go-to-market strategy.

Yes, I'll touch on that. So really, the approach is to leverage our entire portfolio in a way to continue to drive growth of LP, but more specifically our Siding business. The focus primarily is on the New Construction segment to start with, but we also see opportunities within the Shed segment and Repair and Remodel segment as well. So we are in the early stages. We have a couple of builder wins that I think came as a result of this focus, and there's a few more on the horizon that I'm not prepared to speak to today, but I do believe within the next quarter, we'll be able to highlight as material wins that were a result of an enterprise approach to the segments we play in.

Okay. That's very helpful. And then just in terms of the outlook, I mean, it sounds like at least in Q1, R&R versus kind of the new resi pieces within Siding were performing similarly. Is that how you kind of expect the whole shape of the year? Or would you think that R&R could perhaps be a little bit more stable, notwithstanding the weather here in the first 1.5 months? Can you just talk a little bit about that, please?

Yes. I feel like definitely, the Repair/Remodel segment is the most stable for us right now, followed by shed, but shed is obviously a challenge for us in Q1 as we work through the channel inventory situation. Where we need to see a rebound is in the New Construction segment right now. Obviously, it's softer than it was this time last year, and we are planning for an improvement throughout 2026.

This concludes the question-and-answer session. I would now like to turn it back over to Aaron for closing remarks.

Okay. Thank you, everyone, for joining us to discuss LP's results for 2025, fourth quarter and the full year. For those of you who are at IBS in Orlando, we look forward to seeing you in our booth later this afternoon and available for follow-up calls for those who aren't able to join us in-person. Thanks, everyone. Stay safe, and we'll talk to you soon.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.