BlueLinx Holdings Inc. is retooling its digital strategy around artificial intelligence and expanding internal AI tools for employees, even as a soft housing market kept full-year sales flat in 2025.

CEO Shyam Reddy said the company is cautious about pouring money into a traditional ecommerce platform as AI rapidly changes how customers may place orders. BlueLinx is a wholesale distributor of building products.

“It would be foolhardy to spend millions of dollars investing in an ecommerce platform that’s based on traditional notions that could be obsolete before we even got through phase 1 of it,” Reddy said on the company’s earnings call.

BlueLinx sales in Q4 2025

For its fiscal Q4 ending Jan. 3, BlueLinx reported sales of $715.8 million. That’s up $5.2 million, or 0.7%, from $710.6 million a year earlier. The quarter included 14 weeks, compared with 13 weeks in the prior-year period.

BlueLinx reported a net loss of $8.6 million for the quarter. That compares with net income of $5.3 million a year earlier — a swing to a loss of about $13.8 million. The company attributed the change to higher operating costs, higher depreciation and amortization tied to asset additions and acquisition-related costs.

“During the fourth quarter, we generated $56 million in free cash flow primarily due to our effective inventory management,” said Kelly Wall, chief financial officer.

For fiscal 2025, BlueLinx reported sales of $2.954 billion. That’s up about $1.5 million, or 0.05%, from $2.953 billion a year earlier. Its fiscal 2025 included 53 weeks compared with 52 weeks in fiscal 2024.

Full-year net income was $219,000, down from $53.1 million in fiscal 2024 — a decline of about 99.6%.

The company said the year-over-year comparison was affected by a $12.7 million net benefit in fiscal 2024 tied to import-duty items, which was not material in fiscal 2025. BlueLinx also said results reflected costs tied to investments supporting its commercial strategy and digital modernization.

“Our fourth quarter and full year 2025 results demonstrated our ability to grow the business across multiple product lines and in key customer channels, despite persistent challenging market conditions,” Reddy said.

Categories where BlueLinx seeks growth

BlueLinx has been pushing growth in specialty product categories such as engineered wood, siding, millwork, outdoor living, specialty lumber and industrial products.

In Q4, specialty product sales increased to $504.7 million. That’s up $21.1 million, or about 4%, from $483.6 million a year earlier. BlueLinx said the gain reflected higher volumes across most categories and the addition of Disdero Lumber Co., which it acquired on Oct. 31.

Specialty product gross profit increased to $91.6 million, up 3.2% from $88.7 million a year earlier. Specialty product gross profit margin was 18.1%, slightly below 18.4% in the prior-year quarter.

Structural product sales — including lumber, plywood, oriented strand board, rebar and remesh — fell to $211.1 million. That’s a $15.9 million decrease, or 7.0%, from $227.0 million a year earlier. BlueLinx said lower lumber and panel prices offset higher volumes.

The company said average composite pricing in the quarter fell 12% for lumber and 20% for panels compared with the fourth quarter of 2024. Structural product gross profit was $21.0 million, down from $24.6 million a year earlier. And the structural product gross profit margin was 10.0%, down from 10.8%.

For the full year, specialty product sales were $2.053 billion, up 0.3% from $2.046 billion. Structural product sales were $901.0 million, down 0.6% from $906.6 million.

How BlueLinx is working toward digital transformation

BlueLinx said it completed the first phase of its digital modernization program on time and under budget. That includes upgrades to its data management platform and rollout of an Oracle transportation system.

While the company ran ecommerce pilots, executives said they are placing greater emphasis on supporting several large customers with their own advanced digital platforms — and keeping flexibility as AI changes how buying may begin.

Reddy suggested future orders could increasingly arrive through conversational AI tools rather than traditional distributor websites.

BlueLinx is also moving ahead with warehouse technology. Reddy said a warehouse system pilot produced “promising results.” The company plans targeted investment and expansion over the next 12 to 24 months.

“We absolutely believe in WMS,” he said. “The idea is to take it to the next level.”

Reddy said BlueLinx has broadened internal AI use beyond an initial pilot group, giving most salaried employees tools to build AI agents to reduce manual work. The company has launched AI tools to support modeling and data analysis. It’s also developing applications aimed at day-to-day operations such as inventory management, commercial initiatives, training and value-added services.

Reddy said the company is not yet measuring productivity gains and declined to offer a firm timeline for broader AI-driven commerce initiatives.

Based on the first seven weeks of its fiscal Q1 2026, BlueLinx said it expects specialty product gross profit margin of 17% to 18% and structural product gross profit margin of 9% to 10%. The company expects average daily sales volumes to be lower than Q4 2025 due to normal seasonality and winter weather, but higher than the weather-impacted Q1 2025.

For BlueLinx, the message heading into 2026 was clear: The company is betting that stronger data, more automation and practical AI tools — paired with targeted warehouse upgrades — will matter as much as product mix when customers decide where and how to buy.

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