Apogee Raises FY2027 Outlook as Q2 Sales Rise Across All Segments

Apogee Enterprises said its fiscal 2027 second-quarter results exceeded its expectations as revenue increased across all four operating segments, prompting the architectural products company to raise its full-year sales and adjusted earnings guidance. The updated outlook also incorporates contributions from the Kalwall and Groglass acquisitions.

Second-quarter net sales rose 9.2% year over year to $391.1 million. Adjusted EBITDA increased 11.7% to $49.5 million, while adjusted EBITDA margin expanded 30 basis points to 12.7%. Adjusted diluted earnings per share climbed 19.4% to $1.17, with the company attributing the increase partly to lower interest expense.

Apogee said sales benefited primarily from the Kalwall acquisition, pricing and favorable product mix, partly offset by lower volume. The improvement in adjusted EBITDA margin reflected higher pricing, productivity gains, net savings from Project Fortify Phase 2 and Kalwall’s accretive contribution. Higher material and manufacturing costs and the effects of lower volume partially offset those benefits.

Revenue rises across all segments

Architectural Glass recorded the strongest sales growth, with revenue increasing 21.1% to $87.4 million. Its adjusted EBITDA margin declined 120 basis points to 14.9%.

Performance Surfaces sales advanced 14.2% to $55.3 million, while adjusted EBITDA margin fell 70 basis points to 22.5%. Despite the contraction, the segment retained the highest adjusted margin among Apogee’s four businesses.

Architectural Services generated sales of $108.5 million, up 7.9%, and expanded its adjusted EBITDA margin by 80 basis points to 5.8%. Architectural Metals sales increased 1.8% to $143.5 million, with adjusted EBITDA margin improving 60 basis points to 15.4%.

Groglass expands Performance Surfaces portfolio

Apogee also completed its acquisition of Groglass, a European provider of high-performance glass, acrylic and polycarbonate products. The company said the transaction adds coatings capabilities, established brands, cross-selling opportunities and a European manufacturing presence to its Performance Surfaces portfolio.

Management expects Groglass to contribute approximately $30 million of revenue at an adjusted EBITDA margin of about 25% during the first 12 months. Apogee also expects at least $4 million of annualized cost synergies within three years.

The company expects Kalwall and Groglass to be modestly accretive to fiscal 2027 adjusted EPS.

Fiscal 2027 outlook raised

Apogee now expects full-year net sales of $1.46 billion to $1.50 billion, compared with its previous range of $1.38 billion to $1.43 billion. The company raised its adjusted diluted EPS forecast to $3.00 to $3.40 from $2.70 to $3.25.

The outlook assumes approximately $15 million of interest expense, up from the prior assumption of about $10 million, and an adjusted effective tax rate of approximately 26%. Planned capital expenditures remain between $35 million and $40 million.

For the second half, management expects net sales and adjusted diluted EPS to be relatively balanced between the third and fourth quarters. It also expects operating cash flow generation to remain strong. The guidance is based on current macroeconomic conditions.

Cash flow remains steady as debt increases

For the six months ended Aug. 29, 2026, operating cash flow rose to $43.3 million from $37.3 million a year earlier. Capital expenditures increased to $17.8 million from $11.8 million, leaving free cash flow unchanged at $25.5 million.

Apogee returned about $27 million to shareholders during the first half, including $16.1 million of share repurchases and $11.2 million of dividends. Second-quarter shareholder returns totaled approximately $12 million.

Total debt stood at $335.5 million on Aug. 29, up from $232.3 million on Feb. 28, while net debt increased to $299.0 million from $192.8 million. The consolidated leverage ratio was 1.7 times under the company’s credit agreement. Apogee said it had strong liquidity and no near-term debt maturities.

The company’s outlook remains subject to macroeconomic uncertainty. Its second-quarter results also showed continuing pressure from lower volume and higher material and manufacturing costs, which partially offset the benefits of pricing, productivity measures and acquisition contributions.