Why Apogee Enterprises Stock Shattered 16% Today

Glassmaker Apogee Enterprises (NASDAQ: APOG) stock is getting hit hard in Tuesday-morning trading, down 16.5% through 11:11 a.m. ET despite reporting better-than-expected sales and earnings this morning.

Heading into the fiscal Q3 2025 report, analysts expected Apogee to earn adjusted profits of $1.11 per share on $332.2 million in sales. In fact, Apogee says it earned $1.19 per share on sales of $341.3 million.

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Apogee's Q3 earnings

Part of the reason investors are probably disappointed by Apogee's numbers is the fact that, despite "beating" on sales, the company's revenues grew only 0.5% year over year -- and that only because the company acquired substrates company UW Interco, adding its revenue stream to Apogee's own.

Also, the company's actual earnings, as calculated according to generally accepted accounting principles (GAAP), were only $0.96 per share, much less than the "adjusted" earnings the company highlighted. Operating profit margins deteriorated in a big way, falling 270 basis points to just 8.4%. On the bottom line, GAAP net profit was down 22% year over year.

CEO Ty Silberhorn blamed the weak results on "continued pressure from soft demand in our end markets," resulting in "lower volume [and] a less-favorable product mix, primarily in Architectural Framing Systems." At the same time, buying UW Interco added "acquisition-related expenses" that hurt profit margins.

Is Apogee stock a sell?

Investors shouldn't expect things to get better anytime soon. Looking ahead to the end of its fiscal 2025, Apogee management foresees full-year sales falling about 5% (again, despite the positive contribution from acquiring UW Interco), with weak demand continuing to impact sales in fiscal Q4.

Nevertheless, Apogee still expects to earn at least $4.90 per share this year on a GAAP basis, and perhaps a bit more. On a $59-ish share price, that works out to a price-to-earnings ratio of just 12x. That should look pretty cheap -- if Apogee can just figure out a way to get its business growing again.

Of course, for the time being, that's exactly the problem that is weighing Apogee stock down.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.