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AMERICAN WOODMARK CORP (AMWD)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue fell 11.7% year over year to $400.4M, with GAAP EPS $1.71 and Adjusted EPS $1.61; Adjusted EBITDA was $47.1M (11.8% margin). Management cited weaker-than-expected demand across new construction and remodel due to tariff uncertainty and declining consumer confidence .
  • Mixed estimate picture: EPS beat consensus by $0.19, while revenue missed by ~$25.8M and EBITDA was below consensus; highlights pricing/mix pressure and cost inflation despite solid execution in SG&A and operations [Values retrieved from S&P Global].
  • FY2026 guidance introduced: net sales range low-single-digit decline to low-single-digit increase; Adjusted EBITDA $175–$200M; first half expected to be challenged, with back-half improvement contingent on macro/tariff clarity .
  • Call themes: tariff impact modeled at ~$20M of cost with uncertain recovery timing, sequential gross margin rebound from Q3 driven by footprint actions and right-sizing, and automation-led savings (Orange, VA closure to save $5–$6M annually) .
  • Additional Q4 items: $27.6M repurchases (417,298 shares), liquidity strong with $48.2M cash and $314.2M revolver availability; Board transition announced (James G. Davis, Jr. retirement) .

What Went Well and What Went Wrong

What Went Well

  • Sequential gross margin recovery versus Q3 after operational right-sizing and footprint actions; Q4 gross margin was 17.0% vs 15.0% in Q3, driven by efficiency improvements and controlled spending .
  • EPS beat consensus as disciplined SG&A (G&A ~$15M) and operational efficiencies offset part of the sales/mix pressure; adjusted net income was $24.0M and Adjusted EPS $1.61 .
  • Capital allocation consistent: repurchased ~2.8% of shares in Q4 ($27.6M), ~7.5% in FY2025 ($96.7M), maintaining leverage of 1.56x and ample liquidity ($48.2M cash, $314.2M revolver) .

Management quotes

  • “Demand... were weaker than expected as uncertainty regarding tariff policies and declining consumer confidence slowed foot traffic... However, our teams continued to execute well and delivered Adjusted EBITDA margins of 11.8%...” — Scott Culbreth, CEO .
  • “Given the wider range expected on net sales and economic uncertainty, our targeted Adjusted EBITDA range is set at $175 million to $200 million.” — Paul Joachimczyk, CFO .
  • “There could be demand impacts... and delay in pricing to recover incremental cost... roughly $20 million of cost... fully baked into the $175–$200M [FY26] range.” — Management on tariffs .

What Went Wrong

  • Revenue declined across all channels in Q4; new construction net sales fell 13.4% and remodel declined 10.4% with home centers down ~10% and dealer/distributors down ~11%, reflecting weaker traffic and builder inventory actions .
  • Unfavorable mix and cabinet count in new construction as builders trade down from “best” to “better/good” and reduce cabinets per home to manage affordability, pressuring price/mix and margins .
  • Cost inflation and tariffs remain overhangs: modeled commodity inflation (lumber, particle board, plywood, labor, transportation), interest expense to rise ~$7M annually in FY26 under new debt agreement; depreciation to increase by ~$11M .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ4 2024 (YoY comp)Q3 2025 (Seq)Q4 2025 ActualConsensus Estimate (Q4 2025)
Revenue ($USD Millions)$453.3 $397.6 $400.4 $426.2*
GAAP EPS ($)$1.69 $1.09 $1.71 $1.42*
Adjusted EPS ($)$1.78 $1.05 $1.61 N/A*
Adjusted EBITDA ($USD Millions)$54.7 $38.4 $47.1 $49.2*
Adjusted EBITDA Margin (%)12.1% 9.7% 11.8% N/A*
Gross Margin (%)18.6% 15.0% 17.0% N/A*
Operating Income ($USD Millions)$38.2 $21.1 $29.5 N/A*
Net Income Margin (%)5.9% 4.2% 6.4% N/A*

Notes:

  • EPS beat: GAAP EPS +$0.29 vs Q3 and +$0.02 vs Q4 2024; beat consensus by +$0.19. Revenue missed consensus by ~$25.8M; Adjusted EBITDA improved sequentially but below consensus by ~$2.1M [Values retrieved from S&P Global].
  • Gross margin rebounded sequentially; operating income improved QoQ on efficiencies, despite lower sales .

Channel/End-Market KPIs (Q4 2025)

KPIQ4 2025 YoY
New Construction Net Sales-13.4%
Remodel Net Sales (Home Centers + Dealers/Distributors)-10.4%
Home Centers-10%
Independent Dealers/Distributors-11%
Adjusted EBITDA Margin11.8%
Share Repurchases417,298 shares; $27.6M

Balance Sheet and Cash Flow Highlights (FY2025)

MetricFY2025
Cash & Cash Equivalents$48.2M
Term Loan Debt$197.5M
Revolver Drawn$173.4M
Operating Cash Flow$108.4M
Free Cash Flow$65.7M
Net Leverage1.56x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY2026N/ALow-single digit declines to low-single digit increasesNew
Adjusted EBITDA ($)FY2026N/A$175M–$200MNew
Interest Expense ($)FY2026N/A+~$7M annually from new debt agreementInformational (cost headwind)
Depreciation ($)FY2026N/A+~$11M vs FY2025Informational (cost headwind)
Net SalesFY2025Low single-digit decline (Q2) Mid single-digit decline (Q3) Lowered vs Q2
Adjusted EBITDA ($)FY2025$225M–$235M (Q2) $210M–$215M (Q3) Lowered vs Q2

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY2025)Previous Mentions (Q3 FY2025)Current Period (Q4 FY2025)Trend
Tariffs and Policy UncertaintyDiscussed potential tariffs (China/Mexico/Canada); pricing actions considered; uncertainty high Still uncertain; modeling pricing options (surcharge vs list changes) ~$20M tariff cost modeled; recovery timing uncertain; court ruling may be favorable by removing price-cost delay risk Elevated uncertainty; clearer quantified impact
Demand/Macro (Housing, Consumer Confidence)Softer demand in remodel; new construction slowed; expecting low-single digit down R&R, low-single digit up new construction Remodel down; builders reducing inventories; sequential Q4 environment similar; expectation of back-half recovery Weaker-than-expected demand; all channels declined; expect back-half FY26 improvement if rates/confidence improve Persistent headwind; cautious near-term, improving back-half
Pricing/MixDealer price increase effective 10/1; monthly review of input costs Consider surcharge vs list increases; avoid multiple dribs of price moves Pricing held; unfavorable mix and lower cabinet count per home; recovery depends on commodity inflation and lag in price realization Mix headwind persists; disciplined pricing approach
Digital/Technology InitiativesERP planning; Salesforce optimization ERP go-live targeted early May at West Coast facility ERP cloud go-live at Anaheim (early May FY2026); cybersecurity enhancements; SEO/content investments Execution progressing
Platform Design/AutomationRamp in Monterrey/NC; automation progressing Orange, VA closure decision; footprint consolidation Orange closure savings $5–$6M annually; centers of excellence; further automation projects planned Cost structure improving through automation
Regional TrendsSoutheast weather-related impact; expecting rebound Growth in Northeast/Northern CA; declines in FL, TX, SW Growth in Northeast/Southeast; declines in FL, TX, Southwest persist Mixed; geographic divergence continues

Management Commentary

  • Strategy pillars: growth, digital transformation, platform design — driving product innovation (30% of MTO sales from products launched in last 3 years), capacity expansions (Monterrey, MX; Hamlet, NC), and brand transitions (1951 Cabinetry) .
  • Macro outlook: longer-term demand tailwinds with lower mortgage rates and improved consumer confidence; back-half improvement expected in FY2026 .
  • Cost discipline: SG&A reductions via incentive/profit-sharing decreases and controlled spending; ongoing automation to offset inflation .
  • Liquidity/Capital allocation: leverage 1.56x; opportunistic buybacks; debt repayments deprioritized within 1.5–2.0x leverage target .

Notable quotes

  • “We have the products and platforms to win, and this will serve as a tailwind for our business.” — CEO .
  • “Our capital allocation priorities... invest in ERP/CRM and automation... opportunistic in share repurchasing... debt repayments deprioritized.” — CFO .
  • “Pricing has held... rotation down from ‘best’ to ‘better’... fewer cabinets per home as builders seek affordability.” — Management .

Q&A Highlights

  • Tariffs: ~$20M cost embedded in FY2026 Adjusted EBITDA range; recovery modeled from 0–100% scenarios; court ruling could remove pricing delay risk .
  • Margins: Sequential gross margin improvement in Q4 from Q3 due to footprint right-sizing and completed operational tasks; caution against using Q4 SG&A baseline due to incentive resets in FY26 .
  • Automation/Footprint: Orange, VA components facility closure expected to save ~$5–$6M annually; ongoing investments to reduce labor needs and enhance efficiency .
  • Pricing/Mix: No wholesale price declines; mix down and cabinet count reductions driving revenue gap in builder channel; disciplined approach to price actions to avoid multiple small increases .
  • Cost Outlook: Commodity inflation (lumber/particle board/plywood), labor, and transportation modeled; productivity offsets and pricing contemplated to recover inflation .

Estimates Context

  • Q4 FY2025 vs consensus: Revenue $400.4M vs $426.2M (miss); GAAP EPS $1.71 vs $1.42 (beat); EBITDA $47.1M (Adj.) vs ~$49.2M consensus (miss). Q3 FY2025 and Q2 FY2025 both saw revenue and EBITDA below consensus, with EPS below consensus in Q3 and below consensus in Q2 as well [Values retrieved from S&P Global].
MetricQ2 2025 EstimateQ2 2025 ActualQ3 2025 EstimateQ3 2025 ActualQ4 2025 EstimateQ4 2025 Actual
Revenue ($USD)$458,285,000*$452,482,000 $405,716,500*$397,580,000 $426,240,750*$400,395,000
Primary EPS ($)2.365*2.08 1.315*1.05 1.42*1.61
EBITDA ($USD)$63,115,500*$60,187,000 $47,069,000*$38,445,000 $49,170,500*$47,101,000

Note: Values retrieved from S&P Global. EBITDA estimates may reflect definitions differing from company-reported Adjusted EBITDA.

Key Takeaways for Investors

  • Narrative: Mixed print — EPS beat via cost control and operational efficiencies, but revenue and EBITDA below consensus; macro softness and tariff uncertainty remain the key swing factors for FY2026 .
  • Near-term: Expect first-half FY2026 pressure with potential back-half recovery; watch court/tariff outcomes and pricing realization timelines as major stock catalysts .
  • Cost structure: Automation and footprint optimization should underpin margin resilience (Orange closure ~$5–$6M annual benefit), but interest and depreciation step-ups create FY2026 headwinds to EBIT/FCF conversion .
  • Mix risk: Builder channel mix down and lower cabinet counts likely to persist near term; stock kitchen category and pro business provide relative offsets within home centers .
  • Capital allocation: Continued buybacks with liquidity headroom (1.56x leverage, ample revolver); debt paydown deprioritized — supports EPS but raises sensitivity to rate/credit conditions .
  • Estimate adjustments: Street likely to trim revenue/EBITDA near term; EPS resilience supported by SG&A control, but sustained inflation and tariff recovery lags warrant cautious revisions [Values retrieved from S&P Global].
  • Watch items: Commodity cost trajectories, price hike timing across channels, ERP/automation execution milestones, and regional demand stabilization (Northeast/Southeast vs FL/TX/SW divergence) .

Appendix: Additional Q4 2025 Press Releases

  • Board transition: James G. Davis, Jr. announced retirement from the Board; governance continuity and refresh opportunities noted .