Apogee Enterprises (NASDAQ:APOG), a leading provider of architectural building products and services as well as high-performance coated materials, today announced its financial results for the third quarter of fiscal 2026, ended November 29, 2025.
Consolidated net sales rose 2.1% year-over-year to $348.6 million.
The increase was driven by an $18.4 million inorganic sales contribution from the November 2024 acquisition of UW Solutions and a favorable product mix, though partially offset by lower overall volume.
Gross margin declined to 23.8% from 26.1% in the prior-year period, primarily reflecting the impacts of lower volume and pricing, along with higher aluminum costs, restructuring expenses, and health insurance costs.
These pressures were partially mitigated by lower incentive compensation expense.
Selling, general and administrative expenses as a percentage of net sales improved to 16.7% from 17.7%, mainly due to reduced acquisition-related costs and lower incentive compensation, though higher amortization expense from the UW Solutions acquisition and CEO transition costs provided some offset.
Operating income decreased to $24.9 million from $28.6 million a year ago, with operating margin contracting 130 basis points to 7.1%.
On an adjusted basis, EBITDA edged up to $46.1 million from $45.8 million, while adjusted EBITDA margin narrowed slightly to 13.2% from 13.4%.
The margin contraction was primarily attributable to lower volume and pricing, higher aluminum and health insurance costs, partially offset by lower incentive compensation and cost savings from the Fortify Phase 2 initiative.
Interest expense also rose to $3.2 million, driven by a higher average debt balance following the UW Solutions acquisition.
Other income increased to $2.5 million from $0.1 million, largely due to a $2.1 million gain from a New Market Tax Credit recognized in the current quarter.
During the quarter, the effective income tax rate rose to 31.4% from 24.1%, primarily reflecting higher tax expense related to discrete items.