AZZ raises FY27 guidance as Q1 sales hit record $448.530 million
AZZ Inc. achieved record Q1 sales of $448.530 million, a 6.29% increase, and raised its FY27 sales and EPS guidance. Adjusted EPS grew 3.93% to $1.85, driven by growth in Metal Coatings and Precoat Metals segments.
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AZZ Inc. reported record first-quarter sales of $448.530 million, an increase of 6.29% year-over-year, driven by strong performance in both the Metal Coatings and Precoat Metals segments. The company raised its fiscal year 2027 guidance for sales and Adjusted Diluted EPS, reflecting confidence in its strategic execution and market positioning. For the quarter ended May 31, 2026, Adjusted diluted EPS rose 3.93% to $1.85, beating analyst estimates, while GAAP diluted EPS was $1.72.
Tom Ferguson, President and Chief Executive Officer, attributed the sales momentum to disciplined operational execution and higher volume in galvanized steel. Metal Coatings sales grew 12.3% to $210.3 million, and Precoat Metals sales increased 1.5% to $238.2 million, reaching a record for the first quarter. Adjusted EBITDA was $99.5 million, representing 22.2% of sales.
Fiscal Year 2027 Outlook
AZZ increased its annual guidance range for the year ending February 28, 2027. The company now expects sales between $1.80 billion and $1.85 billion, compared to the prior range of $1.725 billion to $1.775 billion. Adjusted EBITDA guidance was raised to $375 million to $415 million, and Adjusted Diluted EPS guidance is now $6.75 to $7.15.
| Metric | Prior FY2027 Guidance | Revised FY2027 Guidance |
|---|---|---|
| Sales | $1.725 - $1.775 billion | $1.80 - $1.85 billion |
| Adjusted EBITDA | $360 - $400 million | $375 - $415 million |
| Adjusted Diluted EPS | $6.50 - $7.00 | $6.75 - $7.15 |
Balance Sheet and Capital Allocation
The company generated $37.1 million in cash from operations during the quarter and maintained a net leverage ratio of 1.4x. Capital expenditures for the first three months were $18.7 million, with full-year expectations of approximately $80 million to $100 million. AZZ paid a cash dividend of $0.20 per share during the quarter and recently announced a 20% increase to $0.24 per share.
What specific market trends are driving the higher volume in galvanized steel, and is this demand expected to sustain throughout fiscal 2027?
How will the increased capital expenditure budget of up to $100 million be allocated to support the raised sales and EBITDA guidance?
With the Metal Coatings segment growing significantly faster than Precoat Metals, does the company anticipate a shift in its revenue mix strategy?
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