PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, results of operations, cash flows, and detailed notes on accounting policies, debt, and acquisitions [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Summarizes the company's financial position, detailing assets, liabilities, and shareholders' equity at specific dates | (In thousands) | August 30, 2025 | March 1, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $460,106 | $442,104 | | Property, plant and equipment, net | $259,177 | $268,139 | | Goodwill | $236,653 | $235,775 | | Intangible assets, net | $116,485 | $128,417 | | Total assets | $1,154,683 | $1,175,269 | | **Liabilities and Shareholders' Equity** | | | | Total current liabilities | $261,892 | $285,456 | | Long-term debt | $270,000 | $285,000 | | Total shareholders' equity | $500,215 | $487,898 | | Total liabilities and shareholders' equity | $1,154,683 | $1,175,269 | - Total assets decreased by **$20.59 million** from March 1, 2025, to August 30, 2025, primarily due to decreases in property, plant and equipment, intangible assets, and other non-current assets, partially offset by increases in receivables and inventories[8](index=8&type=chunk) - Total current liabilities decreased by **$23.56 million**, while total shareholders' equity increased by **$12.32 million** during the same period[8](index=8&type=chunk) [Consolidated Results of Operations](index=4&type=section&id=Consolidated%20Results%20of%20Operations) Details the company's revenues, expenses, and net earnings over specific reporting periods | (In thousands, except per share data) | Three Months Ended August 30, 2025 | Three Months Ended August 31, 2024 | Change (YoY) | Six Months Ended August 30, 2025 | Six Months Ended August 31, 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $358,194 | $342,440 | +4.6% | $704,816 | $673,956 | +4.6% | | Gross profit | $82,607 | $97,321 | -15.1% | $157,732 | $196,176 | -19.6% | | Operating income | $26,888 | $41,965 | -35.9% | $33,819 | $83,346 | -59.4% | | Net earnings | $23,649 | $30,566 | -22.6% | $20,962 | $61,577 | -65.9% | | Basic earnings per share | $1.10 | $1.40 | -21.4% | $0.98 | $2.83 | -65.3% | | Diluted earnings per share | $1.10 | $1.40 | -21.4% | $0.97 | $2.80 | -65.4% | - Net sales increased by **4.6%** for both the three and six months ended August 30, 2025, compared to the prior year periods[9](index=9&type=chunk) - Gross profit, operating income, and net earnings significantly decreased for both periods, indicating pressure on profitability despite sales growth[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Earnings](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Earnings) Reports net earnings and other comprehensive income (loss) to arrive at total comprehensive earnings for the period | (In thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 31, 2024 | Six Months Ended August 30, 2025 | Six Months Ended August 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | $23,649 | $30,566 | $20,962 | $61,577 | | Other comprehensive earnings (loss) | $84 | $(1,224) | $2,692 | $(703) | | Total comprehensive earnings | $23,733 | $29,342 | $23,654 | $60,874 | - Total comprehensive earnings for the three months ended August 30, 2025, decreased by **19.1%** year-over-year, while for the six months, it decreased by **61.1%**[11](index=11&type=chunk) - Other comprehensive earnings shifted from a loss of **$1,224 thousand** in the prior three-month period to a gain of **$84 thousand** in the current period, primarily due to foreign currency translation adjustments[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Presents the cash inflows and outflows from operating, investing, and financing activities | (In thousands) | Six Months Ended August 30, 2025 | Six Months Ended August 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $37,280 | $64,132 | | Net cash used in investing activities | $(10,883) | $(15,450) | | Net cash used in financing activities | $(29,130) | $(34,633) | | Decrease in cash, cash equivalents and restricted cash | $(1,922) | $13,808 | | Cash and cash equivalents at end of period | $39,526 | $51,024 | - Net cash provided by operating activities decreased by **$26.85 million** for the six months ended August 30, 2025, compared to the prior year, primarily due to lower net earnings and increased cash used for working capital[12](index=12&type=chunk)[149](index=149&type=chunk) - Net cash used in investing activities decreased by **$4.57 million**, mainly due to lower capital expenditures[12](index=12&type=chunk)[150](index=150&type=chunk) - Net cash used in financing activities decreased by **$5.5 million**, driven by a reduction in common stock repurchases[12](index=12&type=chunk)[151](index=151&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Outlines changes in the company's equity accounts, including common stock, retained earnings, and comprehensive income | (In thousands) | Balance at March 1, 2025 | Balance at August 30, 2025 | Change | | :--- | :--- | :--- | :--- | | Common Shares Outstanding (in thousands) | 21,418 | 21,515 | +97 | | Common Stock at Par Value | $7,139 | $7,172 | +$33 | | Additional Paid-In Capital | $156,075 | $158,065 | +$1,990 | | Retained Earnings | $359,976 | $367,578 | +$7,602 | | Accumulated Other Comprehensive (Loss) Income | $(35,292) | $(32,600) | +$2,692 | | Total Shareholders' Equity | $487,898 | $500,215 | +$12,317 | - Total shareholders' equity increased by **$12.3 million** from March 1, 2025, to August 30, 2025, primarily driven by net earnings and other comprehensive income, partially offset by cash dividends and share retirements[13](index=13&type=chunk) - Cash dividends of **$0.26 per share** were paid in both the first and second quarters of fiscal 2026[13](index=13&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and supplementary information for the consolidated financial statements [1. Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) Describes the key accounting principles and methods used in preparing the financial statements - The Company adopted **ASU 2023-07**, 'Improvements to Reportable Segment Disclosures,' in the fourth quarter of fiscal 2025 for annual requirements and in the first quarter of fiscal 2026 for interim requirements, expanding segment expense and other item disclosures[18](index=18&type=chunk) - **ASU 2023-09**, 'Improvements to Income Tax Disclosures,' is effective for fiscal 2026 annual and fiscal 2027 interim financial statements, requiring disaggregation of tax reconciliation items and income taxes paid by jurisdiction[19](index=19&type=chunk) - **ASU 2024-03**, 'Disaggregation of Income Statement Expenses,' effective for annual periods after December 15, 2026, will require more detailed expense information but is not expected to impact financial position or results of operations[20](index=20&type=chunk) [2. Revenue

Core Insights - Apogee Enterprises, Inc. (APOG) is set to announce its second-quarter fiscal 2026 results on October 9, with earnings estimated at 86 cents per share, reflecting a year-over-year decline of 40.3% [1][3] Earnings Estimates - The Zacks Consensus Estimate for APOG's second-quarter earnings has remained unchanged over the past 60 days, indicating stability in expectations despite the anticipated decline [1][2] - The Earnings Surprise Prediction (ESP) for Apogee is 0.00%, and it currently holds a Zacks Rank of 3 (Hold) [4][3] Performance Factors - The Architectural Services segment is expected to have positively influenced Apogee's fiscal second-quarter performance, driven by improved pricing and a strategic shift towards premium products [5] - The Architectural Glass segment has benefited from a better sales mix and productivity improvements, likely enhancing margins in the second fiscal quarter [6] Challenges and Headwinds - Apogee anticipates ongoing inflationary pressures and supply chain disruptions, which may hinder production levels due to labor constraints [7] - The company expects tariffs to negatively impact earnings per share by 45-55 cents in the first half of fiscal 2026, affecting second-quarter margins [8] Stock Performance - Apogee's stock has declined by 42.4% over the past year, significantly underperforming compared to the industry average decline of 20.6% [9]

Core Points - Apogee Enterprises, Inc. will report its fiscal 2026 second quarter results on October 9, 2025, after market close [1] - A conference call to discuss the financial results and provide a business update is scheduled for October 10, 2025, at 8:00 a.m. Central Time [1] Company Overview - Apogee Enterprises, Inc. is a leading provider of architectural building products and services, including high-performance coated materials [3] - The company is headquartered in Minneapolis, MN, and has a workforce of approximately 4,400 employees [4][8] - Apogee reported revenues of $1.4 billion in 2023 [4][8]

Core Insights - Apogee Enterprises, Inc. (APOG) is experiencing growth in its Architectural Services segment, driven by improved pricing and product mix, which is expected to enhance margins in the upcoming quarters [1][3][5] - The company is facing challenges such as inflation, supply-chain disruptions, and elevated interest rates, which could impact revenues [2][15] Segment Performance - The Architectural Services segment has shown year-over-year growth and margin expansion in fiscal 2025, continuing into fiscal 2026, aided by a strategic shift towards premium products [3][11] - Although net sales in the Architectural Glass segment declined in the past two quarters, an improved sales mix and productivity gains are anticipated to positively influence future performance [4][11] Financial Guidance - Apogee raised its fiscal 2026 net revenue guidance to $1.40-$1.44 billion from $1.37-$1.43 billion, and adjusted EPS guidance to $3.80-$4.20 from $3.55-$4.10 [5][11] - The acquisition of UW Interco, LLC for $242 million is expected to contribute approximately $100 million in sales for fiscal 2026, with an adjusted EBITDA margin of around 20% [9][10][11] Strategic Initiatives - The company is implementing Project Fortify to phase out lower-margin products and services, which includes shutting down its Toronto manufacturing site, potentially impacting revenues [12][14] - Apogee's strategic review has led to a focus on profitable growth, with goals including an ROIC greater than 12% and an operating margin exceeding 10% [6][7] Operational Improvements - The company is pursuing operational and commercial improvements, including cost reductions and enhanced supply chain efficiencies, to mitigate inflationary pressures [8][15] - Restructuring costs related to Project Fortify have been significant, with $1.1 million in employee termination costs and $6.2 million in asset impairment charges incurred in fiscal 2024 [13][15] Market Performance - Apogee's stock has declined by 34.9% over the past year, compared to a 14% decline in the industry [16]

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Industry Overview - The Zacks Glass Products industry is experiencing growth due to rising demand for glass in packaging and construction, driven by its recyclability and sustainability benefits [1][4] - The industry is expected to benefit from the increasing demand for energy-efficient smart windows and glass panels [1][6] Major Trends - Glass packaging is gaining popularity, with over 80% of recycled bottles being reused to make new bottles, significantly reducing the need for raw materials [4] - The global market value of glass containers and bottles is projected to grow from $75.3 billion in 2024 to $115.3 billion in 2034, at a CAGR of 4.4% [4] - The construction sector is increasingly adopting glass as a sustainable alternative to traditional materials, with the global construction glass market expected to rise from $116.25 billion in 2024 to $196.58 billion by 2034, reflecting a CAGR of 5.39% [5] Technological Innovations - Companies are introducing smart glass products that enhance natural light access while minimizing glare and heat, contributing to energy savings [6] - Innovations in glass technology, such as electrokinetic technology, are enabling buildings to reduce energy consumption [3][6] Industry Challenges - The industry faces rising costs in transportation, chemicals, and fuel, prompting companies to focus on pricing strategies and cost reduction through automation [7] Industry Performance - The Zacks Glass Products industry holds a Zacks Industry Rank 2, placing it in the top 1% of 245 Zacks industries, indicating strong earnings growth potential [8][10] - Despite this, the industry has underperformed the S&P 500 and the Industrial Products sector over the past year, with a collective decline of 11.4% [12] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 5.16X, significantly lower than the S&P 500's 17.77X and the Industrial Products sector's 19.85X [15] - Over the past five years, the industry's EV/EBITDA ratio has ranged from a high of 9.42X to a low of 1.73X, with a median of 5.90X [18] Company Highlights - O-I Glass is implementing a cost-reduction initiative expected to generate at least $250 million in benefits by 2025 and $650 million by 2027, while also focusing on reducing the weight of glass containers by up to 30% [19][20] - Apogee Enterprises is enhancing efficiency through Project Fortify, aiming for annualized pre-tax cost savings of approximately $13-$15 million, and has raised its dividend for 12 consecutive years [24][25]

Core Viewpoint - Apogee Enterprises (APOG) has been upgraded to a Zacks Rank 2 (Buy), indicating an upward trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade reflects an improvement in Apogee Enterprises' underlying business, suggesting that investor sentiment regarding this trend could drive the stock price higher [5][10]. - The Zacks Consensus Estimate for Apogee Enterprises indicates expected earnings of $3.91 per share for the fiscal year ending February 2026, with a 2.9% increase in estimates over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7][9]. - Apogee Enterprises' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - Apogee Enterprises (APOG) closed at $43.05, with a 10.6% gain over the past four weeks, and a mean price target of $54 indicates a 25.4% upside potential [1] - The average price targets range from a low of $45.00 to a high of $63.00, with a standard deviation of $9, suggesting a variability in estimates [2] - Analysts have shown increasing optimism about APOG's earnings prospects, with a 2.9% increase in the Zacks Consensus Estimate for the current year [11][12] Group 2 - The Zacks Rank for APOG is 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - A tight clustering of price targets, indicated by a low standard deviation, suggests a high degree of agreement among analysts regarding the stock's price movement [9] - The positive trend in earnings estimate revisions has a strong correlation with near-term stock price movements, indicating potential upside [11]

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, focusing on undervalued stocks for potential profits [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, highlighting Apogee Enterprises (APOG) and OI Glass (OI) as strong value stocks [3][6] Apogee Enterprises (APOG) - APOG holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential in the value investing category [3] - The company has a Price-to-Book (P/B) ratio of 1.89, which is lower than the industry average of 2.17, suggesting it may be undervalued [4] - APOG's Price-to-Cash Flow (P/CF) ratio is 7.97, compared to the industry's average of 9.03, further indicating potential undervaluation [5] - Over the past year, APOG's P/B has fluctuated between 1.68 and 3.78, with a median of 2.24, while its P/CF has ranged from 6.12 to 13.26, with a median of 8.39 [4][5] OI Glass (OI) - OI Glass has a Zacks Rank of 1 (Strong Buy) and a Value grade of A, making it another attractive option for value investors [6] - The stock is currently trading at a forward earnings multiple of 9.11 and a PEG ratio of 0.26, both lower than the industry averages of 9.48 and 0.27, respectively [6] - OI's P/B ratio stands at 1.82, also below the industry average of 2.17, indicating potential undervaluation [7] - In the past year, OI's P/B has varied from 1.04 to 1.96, with a median of 1.37 [7] Conclusion - Both Apogee Enterprises and OI Glass exhibit strong value characteristics, with favorable P/B and P/CF ratios compared to their respective industry averages, suggesting they are currently undervalued [8]