Apogee Surpasses Earnings Estimates in Q2, Hikes FY25 Outlook

Core Insights - Apogee Enterprises, Inc. (APOG) reported record adjusted earnings per share (EPS) of $1.44 for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.20 per share, marking a 5.9% increase from the prior-year quarter [1] - The company generated revenues of $342 million in the quarter, a decrease of 3.2% from the year-ago quarter, primarily due to lower volumes [1] Financial Performance - Cost of sales decreased by 5.1% to $245 million, while gross profit increased by 2% to $97 million, resulting in a gross margin expansion to 28.4% from 27% [2] - Selling, general and administrative (SG&A) expenses rose by 1% to $55 million, and operating income increased by 3.5% to $41.9 million, leading to an operating margin of 12.3% compared to 11.5% in the prior-year quarter [2] Segment Performance - Architectural Framing Systems segment revenues fell by 11% to $141 million, with adjusted operating profit at $17 million, down from $21 million [3] - Architectural Glass segment revenues decreased by 4.2% to $90 million, but operating income improved to $21 million from $17 million [3] - Architectural Services segment revenues grew by 11.3% to $98 million, with operating profit increasing by 74.2% to $6.1 million [3] - Large-Scale Optical Technologies segment revenues declined by 16.1% to $19.8 million, with operating profit at $3.8 million, down from $4.7 million [4] Backlog and Cash Position - The backlog for the Architectural Services segment decreased to $792 million from $867 million in the previous quarter [5] - Apogee had cash and cash equivalents of $51 million at the end of Q2 fiscal 2025, up from $37 million at the end of fiscal 2024, with cash provided by operating activities at $58.7 million compared to $41.3 million in the prior-year quarter [6] Shareholder Returns and Guidance - The company returned $25.9 million to shareholders in the first half of fiscal 2025 through dividends and share repurchases [7] - Apogee raised its fiscal 2025 adjusted EPS guidance to between $4.81 and $5.08, up from the previous range of $4.65-$5.00, while anticipating a revenue decline of 4-7% from fiscal 2024 [8] Stock Performance - Apogee's shares have surged by 86% over the past year, significantly outperforming the industry growth of 13.3% [9]