Apogee Uses Pricing Power, Acquisitions to Outrun Inflation Pressure

Apogee Enterprises, Inc. (NASDAQ:APOG) stock jumped Tuesday after the company reported stronger-than-expected second-quarter results and raised its fiscal 2027 guidance above estimates.

Trading volume also surged. About 964,275 shares changed hands, more than four times the 100-day average volume of 220,069 shares.

Earnings Beat Expectations

Adjusted earnings rose more than 19% year over year to $1.17 per share, beating the consensus estimate of 63 cents.

Sales increased 9.2% to $391.135 million, topping the $359.464 million estimate. The Kalwall acquisition, favorable pricing across most segments and a stronger product mix drove growth.

During Tuesday’s earnings call, management said higher material and manufacturing costs continued to pressure profitability. However, pricing actions, productivity gains and Fortify Phase II cost savings helped offset those headwinds, while the Kalwall acquisition provided an additional lift.

Adjusted EBITDA margin improved to 12.7% from 12.4% a year earlier.

Apogee generated $43.3 million in year-to-date operating cash flow. The company also repurchased $6.4 million of stock and paid $5.5 million in dividends during the quarter.

Segment Revenue Climbs

Architectural Metals revenue rose 1.8% to $143.5 million. Adjusted EBITDA increased to $22.1 million from $20.8 million, while margin expanded to 15.4% from 14.8%.

Architectural Services revenue grew 7.9% to $108.5 million on higher volume. Adjusted EBITDA rose to $6.2 million from $5 million. Backlog reached $833 million, up from $792.3 million at the end of fiscal 2026.

Architectural Glass revenue climbed 21.1% to $87.4 million, including $16.4 million from Kalwall. Adjusted EBITDA rose to $13 million, although margin fell to 14.9% from 16.1%.

Performance Surfaces revenue increased 14.2% to $55.3 million. Adjusted EBITDA rose to $12.4 million from $11.2 million, while margin slipped to 22.5%.

Acquisitions Add to Growth

Kalwall is performing in line with Apogee’s expectations. The company continues to target about $85 million in revenue and a 15% adjusted EBITDA margin during the acquisition’s first 12 months.

Apogee also recently acquired Groglass, which will become part of Performance Surfaces. Groglass is expected to contribute about $30 million in revenue and a 25% adjusted EBITDA margin during its first 12 months.

The deal adds technical capabilities, customer relationships and greater exposure to European markets.

Apogee Raises Fiscal 2027 Outlook

Apogee raised its fiscal 2027 adjusted EPS outlook to $3.00-$3.40 from $2.70-$3.25, above the $2.92 estimate.

The company also increased its sales forecast to $1.46 billion-$1.50 billion from $1.38 billion-$1.43 billion. The consensus estimate is $1.458 billion.

The higher outlook reflects first-half performance, contributions from Kalwall and Groglass and continued operating execution.

Apogee expects net sales and adjusted diluted EPS to be relatively balanced between the third and fourth quarters.

APOG Price Action: Apogee Enterprises shares were up 19.41% at $42.58 at the time of publication Tuesday, according to Benzinga Pro data.

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