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Apogee Enterprises raised its fiscal 2027 sales and adjusted earnings forecasts on Tuesday, October 6, after reporting higher second-quarter revenue, operating income and adjusted profit. The Minneapolis-based architectural products and materials company said net sales for the quarter ended August 29 rose 9.2% year over year to $391.1 million, while adjusted diluted earnings per share increased to $1.17 from $0.98.
The company’s new forecast calls for fiscal-year net sales of $1.46 billion to $1.50 billion and adjusted diluted earnings per share of $3.00 to $3.40. Its previous ranges were $1.38 billion to $1.43 billion in sales and $2.70 to $3.25 in adjusted EPS. Apogee said the revised outlook reflects stronger-than-expected first-half performance, expected contributions from acquisitions and current macroeconomic conditions.
Investing.com reported that Apogee shares rose in premarket trading after the announcement, though the precise 13% increase in the RSS headline could not be independently confirmed. The company’s earnings release confirms the operating results behind the reported market reaction, but does not itself state a share-price move.
Adjusted profit improved as reported earnings edged lower
Apogee reported second-quarter net earnings of $22.4 million, down 5.4% from $23.6 million a year earlier. Diluted EPS was $1.07, compared with $1.10. On an adjusted basis, however, diluted EPS increased 19.4% to $1.17.
The distinction matters: adjusted EPS is a non-GAAP measure, which the company says is intended to provide supplemental information on operating performance and should be considered alongside, not instead of, results prepared under generally accepted accounting principles. The company’s reported figures therefore show a mixed quarter, with stronger operating performance and adjusted earnings but a decline in net income and GAAP EPS.
Operating income rose 24.5% to $33.5 million, and operating margin expanded to 8.6% from 7.5%. Adjusted EBITDA increased 11.7% to $49.5 million, while adjusted EBITDA margin improved to 12.7% from 12.4%.
Pricing, productivity and Kalwall supported revenue and margins
Apogee attributed the 9.2% sales increase to a $16.4 million contribution from its Kalwall acquisition, pricing and favorable product mix. Lower volume partly offset those gains. The company said demand conditions were mixed, while Chief Executive Donald Nolan credited disciplined pricing, productivity initiatives and ongoing operational improvements with helping offset that environment.
Gross margin increased by 150 basis points to 24.6%. Apogee cited pricing, productivity improvements—including net benefits from its Project Fortify Phase 2 cost program—and Kalwall’s contribution. Higher material and manufacturing costs, along with lower volume, partly countered those benefits.
Performance varied among the company’s business lines. Architectural Metals sales rose 1.8% to $143.5 million, with adjusted EBITDA margin increasing to 15.4%. Architectural Services revenue grew 7.9% to $108.5 million; its backlog reached $833 million, up from $792.3 million at the end of fiscal 2026.
Architectural Glass sales advanced 21.1% to $87.4 million, including Kalwall’s contribution, but the segment’s adjusted EBITDA margin declined to 14.9% from 16.1%. Performance Surfaces revenue rose 14.2% to $55.3 million, while its adjusted EBITDA margin slipped to 22.5% from 23.2%, which the company attributed primarily to higher material costs.
Raised forecast incorporates acquisitions and first-half results
Apogee’s new full-year outlook raises both ends of its sales range and adjusted EPS range. The company also outlined assumptions of about $15 million in interest expense, an adjusted effective tax rate of approximately 26%, and capital expenditures of $35 million to $40 million.
The company said anticipated contributions from Kalwall and Groglass are part of the forecast. Nolan said Kalwall’s early performance had been encouraging and that Groglass would add differentiated capabilities and increase Apogee’s exposure to what management considers attractive end markets. The release did not provide a quantified expected contribution from Groglass.
The acquisition strategy is a significant part of the outlook, but it does not erase the quarter’s cost and volume pressures. Apogee reported that selling, general and administrative expenses increased as a share of revenue to 16.0% from 15.6%, primarily because of higher incentive compensation, partly offset by savings from Project Fortify Phase 2.
Cash generation and debt remain part of the picture
For the first half of fiscal 2027, operating cash flow was $43.3 million, compared with $37.3 million in the prior-year period. Apogee said it returned $27.3 million to shareholders year to date through $16.1 million in share repurchases and $11.2 million in dividends.
Long-term debt stood at $335.5 million at the August 29 quarter-end, compared with $232.3 million at the end of fiscal 2026. The company reported a consolidated leverage ratio of 1.7 times under its credit agreement, a measure investors can weigh alongside the improved operating margin and raised forecast.
Apogee scheduled a conference call for 8 a.m. Central Time on October 6 to discuss the results, with a replay and transcript to follow on its investor-relations website. The next reported results will show how the company’s sales outlook, acquisition contributions and cost-saving efforts develop; the company cautions that its forward-looking statements are subject to risks including cyclical construction demand, material costs and the integration of acquired businesses.
