Apogee Enterprises Q3 Net Sales Rise 2.1% to $348.6M, Lowers EPS Outlook
Apogee reported Q3 net sales of $348.6 million, up 2.1% year-over-year, while adjusted diluted EPS fell 14.3% to $1.02. The company now expects full-year diluted EPS of $2.49 to $2.65 and adjusted EPS of $3.40 to $3.50, including a $0.30 tariff headwind.
1. Q3 Financial Performance
Apogee Enterprises reported third quarter net sales of $348.6 million, up 2.1% year-over-year, driven by an $18.4 million inorganic contribution from the UW Solutions acquisition and favorable product mix despite lower volume. GAAP diluted EPS declined 19.8% to $0.77, reflecting higher aluminum and health insurance costs, while adjusted diluted EPS fell 14.3% to $1.02. Adjusted EBITDA edged up 0.7% to $46.1 million, with a margin of 13.2% versus 13.4% last year.
2. Segment Results
Architectural Metals sales totaled $124.4 million (down from $138.0 million) with adjusted EBITDA of $16.8 million (13.5% margin), benefiting from Fortify Phase 2 cost savings. Architectural Services net sales rose slightly to $105.2 million, generating $10.2 million of adjusted EBITDA (9.7% margin) on higher volume. Architectural Glass delivered $70.9 million in sales with $11.5 million of adjusted EBITDA (16.3% margin), pressured by lower pricing. Performance Surfaces sales climbed to $53.0 million, including the UW Solutions contribution, producing $11.9 million of adjusted EBITDA (22.5% margin).
3. Cash Flow and Balance Sheet
Operating cash flow in the quarter was $29.3 million, compared with $31.0 million a year earlier, while year-to-date cash flow totaled $66.6 million versus $95.1 million in the prior year, impacted by lower net earnings and a $13.7 million arbitration settlement. Capital expenditures of $15.8 million were funded from operations, and $16.6 million was returned to shareholders in dividends. Long-term debt decreased by $15 million to $255.0 million, reducing the consolidated leverage ratio to 1.4×.
4. Revised Fiscal 2026 Outlook
Apogee now expects full-year net sales of approximately $1.39 billion, diluted EPS of $2.49 to $2.65 and adjusted diluted EPS of $3.40 to $3.50, which includes an estimated $0.30 negative EPS impact from tariffs. The outlook assumes an adjusted effective tax rate of about 27% and capital expenditures of $25 million to $30 million. The company anticipates completing cost actions under Project Fortify Phase 2 by the end of the fourth quarter, with total pre-tax charges of $28 million to $29 million and annualized savings of $25 million to $26 million.