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APOGEE ENTERPRISES, INC. (APOG)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 net sales rose 4.6% to $346.6M; GAAP EPS was -$0.13 due to $15.3M of Fortify Phase 2 restructuring, while adjusted EPS was $0.56. Adjusted EBITDA was $34.4M (9.9% margin) .
  • Results beat S&P Global consensus: revenue by ~$20.5M and EPS by ~$0.10; adjusted EBITDA also beat (see Estimates Context). Management raised FY26 net sales and adjusted EPS outlook .
  • Guidance: Net sales raised to $1.40–$1.44B (prior $1.37–$1.43B); adjusted EPS to $3.80–$4.20 (prior $3.55–$4.10). Tariff EPS headwind trimmed to $0.35–$0.45 from $0.45–$0.55; capex unchanged at $35–$40M .
  • Key catalysts: improved tariff mitigation (2H weighting), sequential Metals recovery, Performance Surfaces growth (UW Solutions) and Glass pipeline inflecting in 2H; Services backlog modestly lower but mix/pricing discipline maintained .

What Went Well and What Went Wrong

  • What Went Well

    • Beat consensus on revenue and EPS; adjusted EBITDA outperformed as tariff mitigation and lower LTIP expense offset headwinds .
    • Raised FY26 outlook and reduced full-year tariff EPS headwind ($0.35–$0.45 vs prior $0.45–$0.55). CEO: “We are pleased to deliver results ahead of our expectations… raising our fiscal year outlook… stronger second half.” .
    • Performance Surfaces nearly doubled sales YoY (UW Solutions +$22M inorganic) with solid margins; management highlighted regained distribution and flooring pipeline strength .

  • What Went Wrong

    • GAAP loss (-$2.7M; -$0.13 EPS) from $15.3M of Fortify Phase 2 restructuring; gross margin fell to 21.7% (from 29.8%) on mix, aluminum, and higher tariffs .
    • Metals margin compressed (7.3% adj EBITDA vs 17.9% LY) on mix, aluminum costs, and productivity; Services margin dipped to 5.7% on tariffs .
    • Services backlog declined to $682.9M from $720.3M QoQ; operating cash flow was -$19.8M on working capital and a $13.7M arbitration payment .

Financial Results

Consolidated performance vs prior quarters (oldest → newest)

MetricQ3 FY25Q4 FY25Q1 FY26
Revenue ($M)$341.3 $345.7 $346.6
GAAP EPS$0.96 $0.11 -$0.13
Adjusted EPS$1.19 $0.89 $0.56
Gross Margin %26.1% 21.6% 21.7%
Adjusted EBITDA ($M)$45.8 $41.1 $34.4
Adjusted EBITDA Margin %13.4% 11.9% 9.9%

Q1 FY26 actuals vs S&P Global consensus

MetricConsensus*Actual
Revenue ($M)326.1*346.6
EPS0.45*0.56
EBITDA ($M)30.7*34.4

* Values retrieved from S&P Global

Segment performance (Q1 FY26 vs Q1 FY25)

SegmentQ1 FY25 Net Sales ($M)Q1 FY26 Net Sales ($M)YoYQ1 FY25 Adj. EBITDA ($M)Q1 FY26 Adj. EBITDA ($M)Margin FY25Margin FY26
Architectural Metals133.2 128.6 -3.4% 23.8 9.4 17.9% 7.3%
Architectural Services99.0 106.5 +7.6% 6.6 6.1 6.6% 5.7%
Architectural Glass86.7 73.3 -15.5% 20.2 13.4 23.3% 18.3%
Performance Surfaces21.2 42.3 +99.3% 5.6 8.0 26.6% 18.8%

KPIs and balance sheet

KPIQ4 FY25Q1 FY26
Services Backlog ($M)720.3 682.9
Consolidated Leverage Ratio (x)1.3 1.6
Long-term Debt ($M)285.0 311.0
Cash from Operations ($M)30.0 (Q4) -19.8
Quarterly Dividend/Share$0.26 $0.26 (declared 6/26/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY26$1.37–$1.43B $1.40–$1.44B Raised
GAAP Diluted EPSFY26$2.54–$3.19 $2.59–$3.12 Narrowed upward low end
Adjusted Diluted EPSFY26$3.55–$4.10 $3.80–$4.20 Raised
Tariff EPS ImpactFY26$(0.45)–$(0.55) $(0.35)–$(0.45) Lower headwind
Effective Tax Rate (GAAP)FY26~24.5% 33% Higher
Adjusted Effective Tax RateFY26—~27.5% New disclosure
CapexFY26$35–$40M $35–$40M Maintained
Interest ExpenseFY26$14.5–$15.5M — (not updated)—
DividendOngoing$0.26/qtr (Apr) $0.26 declared (Jun 26) Maintained

Earnings Call Themes & Trends

TopicQ3 FY25 (two quarters ago)Q4 FY25 (prior quarter)Q1 FY26 (current)Trend
Tariffs/macroCautious outlook; softness in Metals/Glass; UW on track Initial tariff headwind est. $(0.45)–$(0.55) EPS; mitigation plans; close Toronto; 1H-weighted Headwind reduced to $(0.35)–$(0.45); 1H-weighted; limited pass-through on in-flight projects Improving mitigation into 2H
Metals operationsVolume pressure; margin moderated Operational disruption from standardization; recovery plan initiated Sequential improvement Q1→Q2 expected; pricing to reflect costs Sequential recovery underway
Glass pipelineVolume pressure but structural margin improvements Expect moderation into 10–15% range Pipeline improving; growth expected in Q3/Q4 Building toward 2H growth
Services backlog/mixBacklog ~742M; flight-to-quality; 7–9% margin range Backlog 720M; some pull-forward revenue Backlog 683M; pursuing smaller, non-fabrication jobs; tariffs weigh on margins Backlog down; mix more flexible
Performance Surfaces/UWAcquisition closed; adj. EBITDA ~20%; synergy path In line with expectations; mid-single-digit pro forma growth Distribution gains; strong flooring pipeline; inorganic +$22M Growth driver continues
M&A pipelineActive, balanced capital deployment Robust pipeline; accretive targets prioritized Still active; sellers cautious but reasonable valuations Optionality intact

Management Commentary

  • CEO (press release): “We are pleased to deliver results ahead of our expectations… raising our fiscal year outlook for net sales and adjusted diluted EPS… stronger second half of the year.”
  • CEO (press release): “Although tariffs adversely impacted our first quarter results… we expect to be able to substantially mitigate the impact… on the second half.”
  • CFO (call): “We now expect net sales in the range of $1.40–$1.44 billion and adjusted diluted EPS in the range of $3.80–$4.20… unfavorable EPS impact from tariffs of $0.35–$0.45… primarily impact the first half.”
  • CEO (call): Glass pipeline: “We think Q2 looks a lot like Q1, but… growth in top and bottom line picking up in Q3 and Q4.”
  • CEO (press release): Performance Surfaces “platform for growth… encouraged by the early results of the [UW Solutions] acquisition.”

Q&A Highlights

  • Tariffs: Annual EPS headwind reduced to $(0.35)–$(0.45) (from $(0.45)–$(0.55)); majority 1H-weighted; limited ability to reprice in-flight Services contracts; mitigation through supply chain/footprint and pricing in Metals .
  • Fortify Phase 2: ~$24–$26M pre-tax charges; minimal Q1 savings, bulk starting late Q2; annualized savings $13–$15M targeted .
  • Metals: Sequential improvement Q1→Q2 in both sales and margin as pricing resets and operations improve; aluminum cost pass-through to help .
  • Glass: Expect 2H revenue growth; maintaining within long-term 10–15% EBITDA margin range despite mix pressure .
  • Performance Surfaces: Regained retail distribution, flooring pipeline strong; UW integration progressing, synergies tracking .
  • Backlog: Services backlog fell to $682.9M; team pursuing smaller projects and engineering/installation-only jobs to sustain volumes .

Estimates Context

  • Q1 FY26 vs S&P Global consensus: Revenue $346.6M vs $326.1M* (beat ~$20.5M); EPS $0.56 vs $0.45* (beat ~$0.11); EBITDA $34.4M vs $30.7M* .
  • Prior two quarters: Q4 FY25 EPS $0.89 vs $0.87*; revenue $345.7M vs $331.8M*; Q3 FY25 EPS $1.19 vs $1.11*; revenue $341.3M vs $332.2M* .
  • Implication: Street likely to raise FY26 adjusted EPS on tariff headwind reduction and 2H cadence, while trimming GAAP tax-rate assumptions (33% stated) and modeling Metals/Glass margin normalization .

* Values retrieved from S&P Global

Key Takeaways for Investors

  • Beat-and-raise quarter: Revenue/EPS/EBITDA all exceeded consensus; FY26 net sales and adjusted EPS guidance raised, and tariff headwind trimmed—setup for positive estimate revisions .
  • Near-term caution, 2H acceleration: Management expects Q2 sequentially better than Q1, with more pronounced growth in Q3/Q4 from Glass and continued strength in Performance Surfaces .
  • Metals recovery is the swing factor: Operational/pricing actions support sequential margin improvement; watch aluminum and pricing realization into Q2/Q3 .
  • Services resilient but backlog down: Tariffs weigh on 1H margins; backlog moderation and smaller, higher-turn projects offset; monitor award pace and margin discipline .
  • Cash flow dip is transitory: Q1 operating cash outflow driven by arbitration payment and working capital; leverage at 1.6x remains manageable with ample liquidity .
  • Structural cost actions: Fortify Phase 2 savings skew to 2H; model $13–$15M annualized pre-tax savings when fully run-rate .
  • Strategy/M&A optionality intact: UW Solutions delivering; pipeline active—potential catalysts for mix/margin expansion .