Executive Summary
American Woodmark reported Q1 2025 net sales of $459.1 million, down 7.9% year over year, and adjusted EBITDA of $62.9 million (13.7% of net sales), with GAAP diluted EPS of $1.89 and net income of $29.6 million. Results reflect softer remodel/repair activity driven by higher interest rates and macroeconomic headwinds, alongside volume deleverage from the company’s newer manufacturing facilities. Management maintained a cautious but constructive near-term view, guiding for FY2025 net sales to decline in the low-single digits versus FY2024 and EBITDA in a range of $225–$245 million, supported by ongoing pricing actions, manufacturing efficiencies, and selective demand generation. They emphasized three strategic pillars—growth, digital transformation (ERP/CRM deployment), and platform design (new facilities and automation)—as levers to improve margins and drive shared growth as housing activity stabilizes. The company also highlighted capital allocation that prioritizes reinvestment and automation, with ongoing stock repurchases and a targeted leverage trajectory. Management believes rate cuts and a rebound in consumer confidence could unlock stronger demand in calendar 2025 and into 2026, particularly in new construction, while remodel demand remains more sensitive to rate movements. The balance sheet remains solid with $89.3 million in cash and $322.9 million of revolver availability, net leverage of 1.19x adjusted EBITDA, and continued capacity investments to support future share gains and operating efficiency.
Key Performance Indicators
QoQ: 10.42% | YoY:-15.28%
QoQ: 10.58% | YoY:-21.71%
QoQ: 13.02% | YoY:-16.96%
Key Insights
Revenue: $459.1m, down 7.9% YoY; Gross Profit: $92.87m, margin 20.23%, down 15.28% YoY; Operating Income: $47.03m, margin 10.24% (YoY margin shift); EBITDA: $54.59m, margin 11.89%; Net Income: $29.63m, net margin 6.45%; Diluted EPS: $1.89; Cash From Ops: $40.81m; Free Cash Flow: $29.51m; Capital Expenditures: $11.30m; End-Cash: $89.27m; Net Debt: $434.96m; Total Debt: $524.23m; Leverage (Net Debt/Adj EBITDA): 1.19x; Current Ratio: 1.98x; Quick Ratio: 1.14x; Days Sales Outstanding/DIO/CCC: DSO 24...
Financial Highlights
Revenue: $459.1m, down 7.9% YoY; Gross Profit: $92.87m, margin 20.23%, down 15.28% YoY; Operating Income: $47.03m, margin 10.24% (YoY margin shift); EBITDA: $54.59m, margin 11.89%; Net Income: $29.63m, net margin 6.45%; Diluted EPS: $1.89; Cash From Ops: $40.81m; Free Cash Flow: $29.51m; Capital Expenditures: $11.30m; End-Cash: $89.27m; Net Debt: $434.96m; Total Debt: $524.23m; Leverage (Net Debt/Adj EBITDA): 1.19x; Current Ratio: 1.98x; Quick Ratio: 1.14x; Days Sales Outstanding/DIO/CCC: DSO 24.1 days; DIO 43.5 days; CCC 50.5 days; Capital Allocation: Share repurchases of ~271k shares in Q1; Remaining buyback authorization $65.4m; ERP/CRM and Montery/Hamlet/North Carolina capacity ramp in progress; 4Q24–Q1 2025 guidance implies a slower near-term backdrop but with long-term housing demand tailwinds.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
459.13M |
-7.85% |
1.29% |
| Gross Profit |
92.87M |
-15.28% |
10.42% |
| Operating Income |
47.03M |
-5.29% |
23.03% |
| Net Income |
29.63M |
-21.71% |
10.58% |
| EPS |
1.91 |
-16.96% |
13.02% |
Key Financial Ratios
operatingProfitMargin
10.2%
operatingCashFlowPerShare
$2.62
freeCashFlowPerShare
$1.9
Management Commentary
- Strategy and execution: Management reiterated three strategic pillars—growth, digital transformation (ERP go-live, CRM), and platform design (Monterey, Mexico; Hamlet, NC) and highlighted that summer product launches and stock kitchen/bath wins are supporting the year.
- Demand environment: Scott Culbreth noted weaker remodel demand driven by higher rates, with new construction up single-digits early in the year but remodel down double-digits; the company does not see a share loss but sees weaker demand versus earlier expectations. Management expects rate cuts to unlock demand in calendar 2025 and potentially beyond.
- Margin and pricing: The team cited ongoing input-cost pressures (logistics, raw materials, labor) and indicated pricing actions have begun in dealer/distributor channels, with potential actions in other channels as needed. Despite volume declines, operating efficiencies and price actions are helping to offset some margin headwinds.
- Capacity and investments: The company is ramping capex in its West Coast Made-to-Stock facility, and advancing automation and plant upgrades (Monterey, NM; Hamlet, NC) to support future throughput and unit costs.
- Liquidity and capital allocation: Cash balance of $89.3 million with $322.9 million of revolver availability; net leverage 1.19x; 271k shares repurchased in Q1; 65.4 million share repurchase authorization remaining.
- Outlook and uncertainty: Management framed FY2025 as a low-single-digit revenue decline with EBITDA guidance of $225–$245 million, explicitly noting dependence on housing starts, consumer confidence, inflation, and rate trajectories; they expect pricing and efficiency to cushion the impact and maintain EBITDA within the guided band.
Our teams delivered net sales of $459.1 million, representing a decline of 7.9% versus the prior year... weaker demand during the summer in the remodel channel.
— Scott Culbreth, President and CEO
As interest rates decline, consumer confidence increases, existing home sales increase, and the potential for home projects increases. This should serve as a tailwind for our business and calendar year 2025.
— Scott Culbreth, President and CEO
Forward Guidance
Management maintains a conservative-to-moderate view for FY2025: net sales expected to be down in the low-single digits versus FY2024, reflecting softer repair/remodel activity and a decelerating large-ticket remodel environment, partially offset by continued strength in new construction during the back half of the year. EBITDA is guided to $225–$245 million, implying de-leveraging pressure from softer volumes but offset by manufacturing efficiency gains and ongoing pricing actions. They plan to execute on digital transformation (ERP go-live and CRM rollout) and automation investments to drive long-run margins, while continuing to optimize SG&A and tailor pricing on a monthly basis across channels. The outlook assumes some recovery in housing to support cabinet installations as rate cuts materialize; management also highlighted that new capacity and improved service levels could support share gains as demand recovers. Key variables investors should monitor include: policy rate trajectory (Fed cuts and potential further easing), homebuyer confidence, single-family housing starts (and remodel spend), input costs (lumber, particleboard, transport/logistics), and channel-specific pricing dynamics. Overall, the key near-term risk is ongoing macro-driven demand volatility, while the main upside is a housing-cycle rebound aided by capacity alignment, further ERP/automation benefits, and stronger new construction activity in 2025–2026.