American Woodmark (AMWD) is trading higher (+5%) today after it reported 4Q17 (Apr) earnings results this morning. In case you're not familiar, American Woodmark makes kitchen cabinets and vanities for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, major builders and through a network of independent distributors. AMWD presently operates nine manufacturing facilities and seven service centers across the country.
It offers framed stock cabinets in approximately 500 different cabinet lines, ranging in price from relatively inexpensive to medium-priced styles. Styles vary by design and color from natural wood finishes to low-pressure laminate surfaces. Stock cabinets consist of cabinet interiors of varying dimensions and construction options and a maple, oak, cherry, or hickory front frame, door and/or drawer front. Products are sold under the brand names of American Woodmark, Simply Woodmark, Timberlake, Shenandoah and Waypoint Living Spaces. AMWD's business is cyclical, with higher sales in fiscal Q2 (Oct) and Q4 (Apr).
Turning to the AprQ results, non-GAAP EPS rose 31% YoY to $1.13, which was better than market expectations. Revenue rose 7.4% year/year to $258.7 mln, which was below market expectations. So it was a mixed quarter overall. AMWD did not provide forward guidance which is usually the case. Gross margin improved to 22.3% from 20.3% in the prior year period due to higher sales volume, lower labor benefit costs and improved operating efficiency.
The company says very little in the press release, you will need to wait for the call at 11am ET if you want more detail. However, the company was quite bullish on its JanQ call in late February. Management said that it continued its extremely strong performance within the new construction segment. AMWD significantly outperformed the market growth of 10%. It's worth noting that AMWD saw some builders pull demand forward that was a bit stronger than in prior years and could have a slight impact on demand in AprQ. That might help explain why sales were a bit light this quarter.
In sum, the stock is trading higher on the AprQ report so it's clear that investors are happy with the quarter overall. The stock tends to trade in a choppy pattern with big moves (up and down) around earnings. Perhaps the lack of earnings guidance keeps investors in the dark a bit so it's difficult to know what to expect. However, the stock has been trending higher for most of the past year as AMWD's business is quite healthy these days.