Atkore ($ATKR) Q2 Update
Atkore ATKR 0.00%↑ reported Q2 234 earnings this week and uncharacteristically missed expectations. As a result, shares traded down around 12%, back to prices last seen in February. I’ve owned Atkore for over a year, and it’s a high-conviction holding in my portfolio. Let’s see how bad the results really were.
Q2 results
Atkore reported declines of 11% in sales, 23% in adjusted EBITDA and 15% in EPS for Q2. The company continues to be in a pricing normalization, as it has been very open about for the last few years. The normalization will continue for another year and 2026 should return to growth. The company met its guidance for net sales and beat slightly on AEBITDA and significantly on EPS. The tax rate was considerably lower than guided at 18.7% versus 25%; this explains the large EPS beat (AEBITDA isn’t affected by taxes).
Atkore also lowered its full-year outlook by $200 million to $3.3-3.5 billion in sales, $50 million of AEBITDA to $850-900 million and $0.5 EPS to $16-17. Volume growth was disappointing because organic volumes declined by 0.8% in the quarter instead of double-digit growth, still up 6% YTD. This lowered organic volume growth for the year to mid-high single digits. Let’s talk more about the reasons for the miss, guide down and how this translates into the valuation.
