What Happened:

Shares of cabinet manufacturing company American Woodmark (NASDAQ:AMWD) fell 12.8% in the pre-market session after the company reported second-quarter earnings results with its revenue, EPS, and full-year EBITDA guidance falling short of Wall Street's estimates. Highlighting the drivers of the weak performance, management noted that weak demand in the remodel market, more than offset growth in the new construction market. The near-term guidance for the remodel market was equally bleak, with expectations for continued soft demand. As a result, the full-year revenue guidance was lowered. For FY'25, the company expects low single-digit decline in net sales year-over-year (vs previous guidance of low single-digit net sales increase year-over-year). Overall, this was a weaker quarter.

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What is the market telling us:

American Woodmark’s shares are somewhat volatile and over the last year have had 8 moves greater than 5%. But moves this big are very rare even for American Woodmark and that is indicating to us that this news had a significant impact on the market’s perception of the business.

American Woodmark is down 3% since the beginning of the year, and at $88.92 per share it is trading 13.2% below its 52-week high of $102.50 from July 2024. Investors who bought $1,000 worth of American Woodmark’s shares 5 years ago would now be looking at an investment worth $1,150.

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