Why Architectural Services Company Apogee Shares Are Trading Higher Today

Apogee Enterprises, Inc. APOG reported first-quarter FY25 sales of $331.5 million, missing the consensus estimate of $333.2 million.

Revenue fell 8.3% Y/Y, driven by lower volume. Gross margin improved by 410 basis points Y/Y to 29.8%, primarily driven by a more favorable mix of projects in Architectural Services, favorable material costs, lower insurance-related costs, and productivity gains.

Adjusted operating income rose 25.9% to $42.5 million, with the operating margin improving 350 basis points Y/Y to 12.8%, led by favorable project mix, lower material and insurance costs, productivity gains, and reduced bad debt expense.

Adjusted EBITDA for the quarter increased 20.2% Y/Y to $52.6 million with an adjusted EBITDA margin of 15.9%. Adjusted EPS rose 37.1% Y/Y to $1.44, beating the consensus of $1.04.

During the quarter, the company repurchased $15.1 million of stock. Apogee held $30.4 million in cash and equivalents as of June 1.

Outlook: Apogee raised the FY25 adjusted EPS outlook to $4.65-$5.00 from $4.35-$4.75 against the consensus estimate of $4.52. Apogee reiterated a FY25 net sales decline of 4% to 7%. 

The company now expects a total of $15 million to $16 million of pre-tax charges in connection with Project Fortify, leading to annualized cost savings of $12 million to $14 million. It continues to expect to achieve 60% of these savings in FY25 and the rest in FY26. Apogee anticipates capital expenditures of $40 million-$50 million in FY25.

Ty R. Silberhorn, Chief Executive Officer, said, “As we look ahead, we continue to expect pressure on volume and pricing through the remainder of the fiscal year, due to softening end markets. We are focused on continuing to deliver results in this environment, while investing to position the Company for long-term growth.”

Investors can gain exposure to the stock via Pacer US Small Cap Cash Cows Growth Leaders ETF CAFG.

Price Action: APOG shares are up 9% at $64.58 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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