American Woodmark (AMWD) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY2025 were $452.5M, down 4.5% year-over-year, with year-to-date sales at $911.6M, down 6.2% year-over-year.

• Net income for Q2 FY2025 was $27.7M (6.1% of sales), with GAAP EPS of $1.79 and adjusted EPS of $2.08; year-to-date net income was $57.3M.

• Adjusted EBITDA for Q2 was $60.2M (13.3% margin), down from $72.3M (15.3%) last year; year-to-date Adjusted EBITDA was $123.1M (13.5%).

• Share repurchases totaled 620,337 shares ($56.5M, 4.1% of outstanding) year-to-date, with an additional $125M authorization approved.

• Demand remained soft in the remodel market and new construction, impacting results.

Financial highlights

• Gross margin for Q2 was 18.9%, down 290 basis points year-over-year, mainly due to lower volumes and higher input costs.

• Adjusted net income for Q2 was $32M ($2.08 per diluted share), down from $41.1M ($2.50 per share) last year.

• Adjusted EBITDA margin for Q2 was 13.3%, down from 15.3% last year.

• Free cash flow for the fiscal year to date was $30.1M, down from $109.9M last year, mainly due to higher inventory and lower accrued expenses.

• General and administrative expenses fell 42.2% in Q2, mainly due to the end of customer intangibles amortization and lower incentive costs.

Outlook and guidance

• Fiscal 2025 net sales expected to decline low single digits versus 2024, with adjusted EBITDA targeted at $225M–$235M.

• Repair and remodel market projected down mid-single digits; new construction expected up low single digits.

• Management expects demand trends to remain challenging due to macroeconomic housing headwinds.

• Continued investment in digital transformation and automation; share repurchases to remain opportunistic, with debt repayments deprioritized.

• Q3 sales expected to be seasonally lowest due to fewer sales days.