American Woodmark Reports Q2 Fiscal 2025 Results with Decreased Net Income and Sales

American Woodmark Corporation reported its financial results for the second quarter of fiscal 2025, revealing a net income of $27.7 million, or $1.79 per diluted share, compared to $30.3 million, or $1.85 per diluted share, in the same period last year. The company's net sales for the quarter were $452.5 million, reflecting a 4.5% decrease from $473.9 million in the prior year. For the first half of fiscal 2025, net sales totaled $911.6 million, down 6.2% from $972.1 million in the same period of fiscal 2024. The decline in revenue was attributed to lower demand in the remodeling market, particularly in the independent dealer and distributor channels, which saw a 3.0% decrease in sales during the quarter.

The company's gross profit for the second quarter was $85.7 million, resulting in a gross profit margin of 18.9%, down from 21.8% in the same quarter last year. This decline was primarily due to lower sales volumes impacting manufacturing leverage and increased input costs related to logistics, raw materials, and labor. General and administrative expenses decreased significantly by 42.2% to $20.2 million, largely due to the absence of amortization of customer intangibles that ended in December 2023 and lower incentive costs. Selling and marketing expenses also saw a slight decrease of 4.2% to $21.7 million.

In terms of operational developments, American Woodmark's restructuring efforts included a reduction in force, which resulted in pre-tax restructuring charges of $1.1 million for the quarter. The company continues to focus on its digital transformation and automation investments, which are expected to enhance operational efficiency. As of October 31, 2024, the company operated 18 manufacturing facilities across the U.S. and Mexico, with a total employee headcount of approximately 15,161, down from 15,653 at the end of the previous fiscal year.

Looking ahead, American Woodmark anticipates a low single-digit decline in net sales for fiscal 2025, driven by a softer repair and remodel market. The company has adjusted its outlook for Adjusted EBITDA to a range of $225 million to $235 million, impacted by manufacturing deleverage due to lower sales. The company also amended its credit agreement, establishing a $500 million revolving loan facility and a $200 million term loan facility, which will provide liquidity and support ongoing operations. As of the end of the reporting period, the company had $56.7 million in cash and cash equivalents, down from $87.4 million at the end of April 2024.