Executive Summary
American Woodmark reported a challenging QQ3 2025 with a 5.8% year-over-year net sales decline to $397.6 million, driven by softer remodeling demand and a material slowdown in new single-family construction. Gross margin contracted meaningfully to 15.0% from 19.2% a year ago, as volume deleverage and higher input costs pressured profitability, while adjusted EBITDA remained solid at $38.4 million (9.7% of net sales). The quarter featured operational efficiency gains and SG&A discipline, but those benefits were insufficient to offset weaker top-line momentum and higher materials/labor costs. Management maintained a cautious full-year view, guiding to a mid-single-digit decline in net sales and EBITDA in the $210–$215 million range, while signaling ongoing responses to macro headwinds (tariffs, inflation, consumer confidence) and structural actions (Orange, VA plant closure, 1951 Cabinetry conversion, ERP Go-Live) to position the business for a healthier longer-term trajectory. Liquidity remains ample, with $43.5 million in cash and access to $314.2 million under the revolving facility, and leverage at 1.53x adjusted EBITDA. The outlook hinges on a recovery in housing activity, stabilization of remodel spend, and the policy environment around tariffs and imports.
Key Performance Indicators
QoQ: -12.13% | YoY:-5.81%
QoQ: -30.27% | YoY:-26.16%
QoQ: -50.53% | YoY:-24.41%
QoQ: -40.15% | YoY:-21.93%
QoQ: -39.23% | YoY:-17.29%
Key Insights
Revenue: $397.6 million; YoY change: -5.8%; QoQ change: -12.1% (Q2 2025 to Q3 2025)
Gross Profit: $59.764 million; Gross margin: 15.0% (vs 19.2% in the prior year; -420 bp YoY)
Operating Income: $21.075 million; Operating margin: 5.30% (vs ~5.30% reported)
EBITDA (reported): $37.115 million; EBITDA margin: 9.32% of net sales (adjusted EBITDA reported at $38.4 million, 9.7% of net sales)
Net Income: $16.571 million; Net income margin: 4.17%
EPS (diluted): $1.09–$1.10 (adjusted $1.05 per dilute...
Financial Highlights
Revenue: $397.6 million; YoY change: -5.8%; QoQ change: -12.1% (Q2 2025 to Q3 2025)
Gross Profit: $59.764 million; Gross margin: 15.0% (vs 19.2% in the prior year; -420 bp YoY)
Operating Income: $21.075 million; Operating margin: 5.30% (vs ~5.30% reported)
EBITDA (reported): $37.115 million; EBITDA margin: 9.32% of net sales (adjusted EBITDA reported at $38.4 million, 9.7% of net sales)
Net Income: $16.571 million; Net income margin: 4.17%
EPS (diluted): $1.09–$1.10 (adjusted $1.05 per diluted share for QQ3 2025)
Free Cash Flow: $2.315 million for the quarter; Year-to-date free cash flow $31.5 million; Net cash provided by operating activities: $10.954 million
Balance Sheet (selected): Cash $43.484 million; Total assets $1,590.236 million; Total liabilities $670.672 million; Total stockholders’ equity $919.564 million; Long-term debt $476.829 million; Total debt $518.698 million; Net debt $475.214 million
Liquidity & Leverage: Cash availability $314.2 million on revolver; Net leverage 1.53x (adjusted EBITDA)
Shareholder Action: Shares repurchased 752,000 in the first 9 months of FY2025 for $69.1 million; remaining repurchase authorization $145.4 million
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
397.58M |
-5.81% |
-12.13% |
| Gross Profit |
59.76M |
-26.16% |
-30.27% |
| Operating Income |
21.08M |
-24.41% |
-50.53% |
| Net Income |
16.57M |
-21.93% |
-40.15% |
| EPS |
1.10 |
-17.29% |
-39.23% |
Key Financial Ratios
operatingProfitMargin
5.3%
operatingCashFlowPerShare
$0.73
freeCashFlowPerShare
$0.15
Management Commentary
Key management insights and context from the QQ3 2025 earnings call:
- Demand environment and revenue trajectory: Scott Culbreth noted: "Our teams delivered net sales of $397.6 million, representing a decline of 5.8% versus the prior year... softer demand in the remodel market and solid decline in new construction single-family activity". This underscores the macro headwinds weighing on AMWD’s core remodeling and construction channels.
- Pricing, tariffs, and margin protection: When discussing pricing and tariff exposure, Culbreth stated that if tariffs persist and cannot be fully mitigated, there "is likely to be pricing action"; the team is evaluating pathways (list price changes, surcharges, and channel-specific processes) to preserve margins.
- Mix shifts and product strategy: The call highlighted a mix headwind from lower new-construction activity and a rotation from higher-end to lower-cost cabinetry options, with Tim Culbreth noting a downward trend in the number of cabinets per home as builders seek affordability.
- Strategic actions and capacity realignment: The company announced the closure of the Orange, Virginia plant as part of a broader efficiency and platform design program, with production shifted to Monticello, KY and Moorefield, WV. Scott Culbreth emphasized the transition is a component plan not affecting finished goods assembly capacity.
- Digital and product platform initiatives: CEO Scott Culbreth cited completion of the 1951 Cabinetry conversion within distribution customers and ongoing launches (summer finishes, new stock bath collections) along with an ERP Go-Live in West Coast made-to-stock facilities slated for early May, underscoring a multi-year digital transformation and platform design strategy.
"Our teams delivered net sales of $397.6 million, representing a decline of 5.8% versus the prior year... softer demand in the remodel market and solid decline in new construction single-family activity as inventories were reduced by builders."
— Scott Culbreth
"There’s likely to be pricing action. As you know, it varies by channel... if tariffs do come through and we're not able to fully mitigate, there's likely going to be pricing action."
— Scott Culbreth
Forward Guidance
Management Outlook and Assumptions:
- Net sales guidance for FY2025: down mid-single digits versus FY2024, reflecting softer new construction and reduced remodeling expenditure amid higher-ticket remodel uncertainty.
- Adjusted EBITDA guidance: $210 million to $215 million for FY2025, reflecting ongoing deleverage from lower volumes and the impact of manufacturing cost pressures.
- Pricing and tariffs: The company is actively evaluating pricing actions to counter inflationary inputs (logistics, raw materials, labor) and potential tariff impacts; no tariff assumptions are embedded in the current outlook as policy is uncertain.
- Capital allocation: Continued investment in automation and digital initiatives; excess capital expected to be used for share repurchases; Orange plant closure is expected to contribute to efficiency gains in FY2026.
- Tariff and policy risk: The management commentary highlights tariff uncertainty (especially for non-China imports) and Mexico exposure (~10% of revenue). If tariffs persist, pricing actions and supply-chain optimization will be necessary.
Assessment: The guidance appears conservative given the breadth of headwinds (weaker remodeling demand, slower single-family new construction, input cost inflation, and tariff risk). The guidance implies modest revenue decline in the near term and a disciplined margin recovery effort through pricing and efficiency. Upside catalysts include a housing market rebound, lower mortgage rates, tariff resolution or mitigation, and faster-than-expected benefits from the ERP go-live and 1951 Cabinetry conversion.