Apogee Enterprises, Inc. has reported its first-quarter fiscal 2025 results, showing a decrease in net sales by 8.3% to $331.5 million compared to the same period in fiscal 2024. However, the company's operating income increased by 22.5% to $41.4 million, and the operating margin improved to 12.5%. Adjusted operating income also showed significant growth, increasing by 25.9% to $42.5 million, with an adjusted operating margin of 12.8%, marking a 37.6% improvement compared to the first quarter of fiscal 2024.
The diluted earnings per share (EPS) grew to $1.41, a 34.3% increase from the previous year. Meanwhile, adjusted diluted EPS increased by 37.1% to $1.44. Adjusted EBITDA also saw a notable increase, rising by 20.2% to $52.6 million, with an adjusted EBITDA margin of 15.9%, marking a 31.4% improvement from the first quarter of fiscal 2024.
The company noted that the decrease in net sales was primarily due to lower volume, but this was partially offset by improvements in gross margin, which increased by 410 basis points to 29.8%. The operating margin improvement was primarily driven by a more favorable mix of projects in architectural services, favorable material costs, lower insurance-related costs, and productivity gains.
Segment-wise, architectural framing systems net sales decreased to $133.2 million, compared to $164.2 million in the first quarter of fiscal 2024, reflecting reduced volume due to lower end-market demand. Operating income for this segment was $18.3 million, including $1.0 million of restructuring charges. Adjusted operating income for architectural framing systems was $19.3 million, with an adjusted operating margin of 14.5% of net sales, marking a 240 basis point improvement.
Architectural glass net sales decreased to $86.7 million compared to $97.2 million in the first quarter of fiscal 2024, primarily due to lower end-market demand. However, operating income increased to $17.1 million, with an operating margin of 19.7% of net sales, showing a 270 basis point improvement.
On the other hand, architectural services net sales grew by 10.7% to $99.0 million, primarily due to a more favorable mix of projects and increased volume. Operating income for this segment increased to $5.6 million, or 5.7% of net sales, compared to an operating loss of $0.6 million in the first quarter of fiscal 2024.
The market has reacted to these announcements by moving the company's shares 7.6% to a price of $63.73. Check out the company's full 8-K submission here.
