Apogee Q2: Earnings Beat, Margins Expansion, Raised EPS Outlook & More

Apogee Enterprises, Inc. APOG reported a Q2 FY24 sales decline of 5% Y/Y to $353.675 million, missing the consensus of $372.01 million. Sales were affected primarily reflecting lower volumes in Architectural Services and Architectural Framing Systems.

Adjusted EPS, however, rose 28% Y/Y to $1.36, above the consensus of $1.12.

Revenue by segments: Architectural Framing Systems $158.80 million (-8.1% Y/Y); Architectural Glass $94.10 million (+21.6% Y/Y), Large-Scale Optical $23.65 million (-6% Y/Y) and Architectural Services $88.06 million (-17.5% Y/Y).

Gross profit increased 12.3% to $95.37 million, and gross margin increased to 27.0% compared to 22.8%, up by 420 bps.

The improvement in gross margin was primarily driven by higher gross margins in both Architectural Framing Systems and Architectural Glass and the increased mix of Architectural Glass in the consolidated results. 

Adjusted EBITDA jumped 20.3% to $51.15 million.

"Second quarter operating margin of 11.5% exceeded our 10% target for the first time since we established our financial goals in November 2021," said Ty R. Silberhorn, Chief Executive Officer.

Quarter-end total long-term debt was $145.7 million, compared to $169.8 million at the end of fiscal 2023. 

The company exited the quarter with cash and equivalents worth $18.42 million.

Outlook: Apogee Enterprises expects FY24 adjusted EPS of $4.35-$4.65 versus analyst consensus of $4.28. The company's prior EPS outlook was $4.15-$4.45.

The company continues to expect flat to slightly declining net sales compared to fiscal 2023.

The company continues to expect a long-term average tax rate of approximately 24.5% and capital expenditures in fiscal 2024 between $50-$60 million.

Price Action: APOG shares are trading higher by 4.26% to $51.41 premarket on the last check Tuesday.