Apogee Enterprises raises fiscal 2027 EPS guidance after strong second quarter

Apogee Enterprises, Inc. (Nasdaq: APOG) raised its fiscal 2027 adjusted diluted earnings per share guidance to a range of $3.00 to $3.40, up from the previous $2.70 to $3.25, following second-quarter results that the company described as exceeding expectations. The Minneapolis-based provider of architectural building products and high-performance coated materials reported the figures on October 6, 2026, for the quarter ended August 29, 2026.

Net sales for the second quarter increased 9.2% to $391.1 million, driven by a $16.4 million contribution from the Kalwall acquisition, price increases, and favorable mix. These gains were partially offset by lower volume. Diluted earnings per share were $1.07, a decrease from $1.10 in the prior year period, while adjusted diluted earnings per share rose 19.4% to $1.17 from $0.98. Operating income climbed 24.5% to $33.5 million, expanding operating margin by 110 basis points to 8.6%.

Don Nolan, Executive Chair and Chief Executive Officer, attributed the performance to disciplined pricing, productivity initiatives, and operational improvements that offset a mixed demand environment. Nolan stated that the company's confidence in the business and first-half momentum supported the decision to raise full-year guidance. He also noted that early performance at Kalwall has been encouraging and that the addition of Groglass is expected to strengthen the portfolio through differentiated capabilities and increased exposure to attractive end markets.

Segment results varied across the company's four divisions. Architectural Metals net sales rose 1.8% to $143.5 million, with adjusted EBITDA margin increasing to 15.4% from 14.8%, aided by price and cost savings from Project Fortify Phase 2. Architectural Services saw net sales grow 7.9% to $108.5 million on higher volume, lifting its adjusted EBITDA margin to 5.8%. The segment's backlog reached $833.0 million at the end of the quarter, compared with $792.3 million at the end of fiscal year 2026.

Architectural Glass net sales increased 21.1% to $87.4 million, primarily due to the Kalwall acquisition and favorable mix, though lower volume and price offset some gains. The segment's adjusted EBITDA margin declined to 14.9% from 16.1% due to higher manufacturing and freight costs. Performance Surfaces net sales grew 14.2% to $55.3 million on higher volume and price, with an adjusted EBITDA margin of 22.5%, down from 23.2% owing to higher material costs.

The company also raised its fiscal 2027 net sales outlook to a range of $1.46 billion to $1.50 billion, from the prior range of $1.38 billion to $1.43 billion. The updated outlook projects interest costs near $15 million, an adjusted effective tax rate of roughly 26%, and capital spending between $35 million and $40 million.

Financial condition metrics showed fiscal year-to-date net cash provided by operating activities of $43.3 million, up from $37.3 million in the prior year period. The company returned $27.3 million in cash to shareholders through $16.1 million in share repurchases and $11.2 million in dividends. Quarter-end long-term debt increased to $335.5 million, resulting in a Consolidated Leverage Ratio of 1.7x.