Executive Summary

Q1 FY26 net sales declined 12.2% year over year to $403.0M; GAAP diluted EPS was $1.00 and adjusted EPS was $1.01, with adjusted EBITDA of $42.2M (10.5% margin) as volumes and mix shifted to value offerings amid weaker new construction and remodel demand .
Results missed S&P Global consensus: revenue $413.3M*, EPS $1.135*, and EBITDA $42.9M*; the company cited tariffs, ERP support costs, and restructuring/merger expenses as headwinds, partially offset by favorable FX hedge mark-to-market .
Management suspended earnings calls and withdrew financial guidance in light of the proposed all‑stock merger with MasterBrand announced Aug 6; preliminary ranges given on Aug 6 were consistent with reported results .
Liquidity remains solid with $54.9M in cash, net leverage of 1.69, and continued buybacks ($12.4M repurchasing 209,757 shares) supporting capital returns despite macro softness .

What Went Well and What Went Wrong

What Went Well

Adjusted EBITDA margin of 10.5% despite volume pressure, reflecting ongoing cost control and execution amid macro headwinds .
Favorable FX hedge mark‑to‑market adjustment (+$8.9M YoY) partially offset cost inflation and mix pressure .
Positive cash generation with cash from operations of $33.1M and free cash flow of $24.9M; continued buybacks of ~$12.4M (209,757 shares) demonstrate capital discipline .

Management quote (CEO): “The new construction and remodel market continued to be weaker than expected…our teams are executing well despite the lower volumes and delivered Adjusted EBITDA margins of 10.5%” .

What Went Wrong

Net sales down 12.2% YoY on softer demand and an unfavorable shift toward value‑based offerings; net income down 50.7% YoY to $14.6M (3.6% margin) .
Cost headwinds: product input costs including tariffs, $2.0M ERP post‑implementation support at a west coast site, $2.8M merger‑related expenses, $0.8M restructuring charges, and +$1.8M YoY interest expense .
Guidance withdrawn and no earnings call due to the proposed MasterBrand merger, reducing near‑term visibility and investor engagement .

Financial Results

Core P&L Trend (oldest → newest)

Metric	Q3 2025	Q4 2025	Q1 2026
Net Sales ($USD Millions)	$397.6	$400.4	$403.0
Gross Profit ($USD Millions)	$59.8	$68.2	$67.5
Operating Income ($USD Millions)	$21.1	$29.5	$20.2
Net Income ($USD Millions)	$16.6	$25.6	$14.6
GAAP Diluted EPS ($)	$1.09	$1.71	$1.00
Adjusted EPS ($)	$1.05	$1.61	$1.01
Adjusted EBITDA ($USD Millions)	$38.4	$47.1	$42.2
Net Income Margin (%)	4.2%	6.4%	3.6%
Adjusted EBITDA Margin (%)	9.7%	11.8%	10.5%

Year-over-Year Comparison (Q1 FY26 vs Q1 FY25)

Metric	Q1 2025	Q1 2026
Net Sales ($USD Millions)	$459.1	$403.0
Net Income ($USD Millions)	$29.6	$14.6
GAAP Diluted EPS ($)	$1.89	$1.00
Adjusted EPS ($)	$2.14	$1.01
Adjusted EBITDA ($USD Millions)	$62.9	$42.2
Adjusted EBITDA Margin (%)	13.7%	10.5%

Consensus vs Actual (Q1 FY26)

Metric	Consensus (Q1 2026)	Actual (Q1 2026)
Revenue ($USD Millions)	413.3*	403.0
Primary EPS ($)	1.135*	1.00
EBITDA ($USD Millions)	42.9*	36.8*

Values with asterisk retrieved from S&P Global.

KPIs and Balance Sheet

Metric	Q3 2025	Q4 2025	Q1 2026
Cash from Operations ($USD Millions)	$63.7 (9M)	$108.4 (FY)	$33.1
Free Cash Flow ($USD Millions)	$31.5 (9M)	$65.7 (FY)	$24.9
Capital Expenditures ($USD Millions)	$32.2 (9M)	$42.8 (FY)	$8.1
Share Repurchases	132,075 shares; $12.6M	417,298 shares; $27.6M	209,757 shares; $12.4M
Cash & Equivalents ($USD Millions)	$43.5	$48.2	$54.9
Total Debt ($USD Millions)	$375.3	$373.5	$372.3
Net Debt ($USD Millions)	$331.9	$325.3	$317.4
Net Leverage (x)	1.53	1.56	1.69

Segment breakdown: Not disclosed in Q1 FY26 press release/8‑K .

Non‑GAAP add‑backs (Q1 FY26): Merger expenses $2.8M; Restructuring $0.8M; Change in fair value of FX forwards $(3.6)M; Stock‑based comp $2.3M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY 2026	Low‑single digit decline to low‑single digit increase	No guidance; company will not provide/update guidance due to proposed merger	Withdrawn/Suspended
Adjusted EBITDA	FY 2026	$175M – $200M	No guidance; company will not provide/update guidance	Withdrawn/Suspended

Note: On Aug 6, management provided preliminary Q1 FY26 ranges with net sales $400–$406M, net income $12.5–$14.5M, adjusted EBITDA $41.75–$43.75M ahead of merger announcement; reported results fell within these ranges .

Earnings Call Themes & Trends

(Company did not hold a Q1 FY26 call due to the proposed MasterBrand merger) .

Topic	Previous Mentions (Q3 FY25, Q4 FY25)	Current Period (Q1 FY26)	Trend
Demand (New Construction/Remodel)	Softer remodel and declining single family activity; inventories reduced	Weaker than expected; demand trends expected to remain challenging	Continued softness
Tariffs/Macro	Tariff uncertainty cited; widened FY26 outlook	Increased product input costs including tariffs pressured margins	Ongoing headwind
Product Mix	Noted volume deleverage/new locations	Unfavorable mix shift towards value offerings	Mix downshift
ERP/Technology	Platform for profitable growth highlighted	$2.0M ERP post‑implementation support cost (west coast site)	Implementation costs elevated
Restructuring/Footprint	Orange, VA plant closure approved/ongoing costs	Mexico reduction in force; continued charges	Execution ongoing
M&A/Strategic	N/A	Proposed all‑stock merger with MasterBrand; ~$90M run‑rate synergies by end of year three	Transformational

Management Commentary

CEO (Q1 FY26): “Demand trends are expected to remain challenging in both markets, but I am confident in our team’s ability to navigate the current macroeconomic environment.”
CEO (Q4 FY25): “Demand…were weaker than expected…we expect to outperform market growth rates but have widened our outlook due to uncertainty related to tariffs…”
CFO (Q4 FY25): “For fiscal year 2026…Adjusted EBITDA range is set at $175 million to $200 million.”
CEO (Merger announcement): Combining with MasterBrand to enhance offering, broaden channels, and drive value, with expected ~$90M run‑rate cost synergies by year three .

Q&A Highlights

No Q1 FY26 earnings call held; the company explicitly stated it would not host a conference call given the proposed MasterBrand merger .
A joint MasterBrand/AMWD call on Aug 6 discussed the transaction and provided AMWD’s preliminary Q1 FY26 ranges; no standalone AMWD Q&A for the quarter .

Estimates Context

Q1 FY26 missed S&P Global consensus: revenue $403.0M vs $413.3M*, EPS $1.00 vs $1.135*, and EBITDA 36.8M* vs $42.9M*; both top line and earnings underperformed amid mix shift, tariffs, ERP support, merger and restructuring costs, and higher interest expense .
With guidance withdrawn and macro headwinds persistent, near‑term Street models may need to reflect lower volumes/mix, cost inflation/tariffs, and temporary ERP/restructuring drags; FX hedge benefits help but are inherently volatile .
Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

Near‑term risk skew is to demand softness and mix downshift; expect earnings sensitivity to volumes until macro improves and merger synergies can be realized .
Watch tariff policy updates and cost pass‑throughs; management cited tariffs as a direct cost headwind this quarter .
ERP post‑go‑live support costs are transitory; monitor pace of normalization and operational benefits as stabilization occurs .
Restructuring actions (Mexico reduction in force; Orange, VA closure) should aid medium‑term efficiency but create near‑term charges; track execution/timeline .
Liquidity and leverage are manageable (net leverage 1.69; ongoing buybacks); FCF generation remains solid even in a down volume environment .
The proposed MasterBrand merger is the dominant catalyst: expanded portfolio/channels, ~$90M synergy target by year three, and potential multiple re‑rating contingent on close/regulatory approvals .
With guidance suspended and no quarterly call, information flow shifts to merger milestones; trading likely reacts to deal progress, macro housing indicators, and tariff headlines .

AMERICAN WOODMARK CORP (AMWD)·Q1 2026 Earnings Summary