Executive Summary / Key Takeaways

• Strategic Resilience Amidst Headwinds: Atkore Inc. (ATKR) demonstrates robust operational discipline and strategic foresight, maintaining its FY25 Adjusted EBITDA midpoint at $400 million and raising its Adjusted EPS midpoint to $6.50, despite significant pricing pressures and market uncertainties. This reflects strong execution of its Atkore Business System and growth initiatives.
• Electrification & Infrastructure Tailwinds: The company is strategically positioned to capitalize on long-term megatrends in electrification, data centers, solar energy, and water infrastructure, with specific initiatives in global megaprojects and water-related products expected to drive future volume growth.
• Competitive Moat & Domestic Advantage: Atkore leverages its extensive domestic manufacturing footprint, strong brand portfolio (e.g., Unistrut, Allied Tube & Conduit), and efficient distribution network to counter intense import competition and benefit from "Buy America" policies, particularly in steel conduit.

• Proactive Capital Allocation: A balanced capital deployment strategy emphasizes returning cash to shareholders through substantial share repurchases (over $1.3 billion since 2021) and a growing quarterly dividend ($0.33 per share), alongside disciplined investments in high-return growth opportunities.

• FY26 Outlook & Mitigation: While management anticipates approximately $50 million in unmitigated headwinds for FY26, primarily from lower selling prices and expanded aluminum tariffs, proactive measures and ongoing productivity gains are expected to offset these pressures.

Atkore's Strategic Power Play in a Dynamic Landscape

Atkore Inc. stands as a foundational provider of electrical, safety, and infrastructure products, deeply embedded in the non-residential construction and industrial markets. Its comprehensive portfolio, spanning metal and plastic conduits, electrical cable, metal framing, and specialized construction services, positions it as a critical enabler of modern infrastructure. The company's overarching strategy is to leverage its domestic manufacturing footprint and operational excellence to capitalize on powerful secular tailwinds, including the surging demand for electrification, the rapid expansion of data centers, the transition to renewable energy, and critical investments in aging infrastructure.

Atkore's journey, rooted in a 1959 founding and refined through its 2016 IPO, has consistently focused on strategic growth and shareholder value. This history of disciplined expansion and operational refinement has culminated in the "Atkore Business System," a data-driven approach to managing growth, productivity, and customer value. This system is not merely a process; it is a core technological differentiator, enabling the company to achieve superior operational efficiency and product quality. For instance, its automated factories and optimized bundling processes contribute to a cost-effective production model, which is a significant competitive advantage against rivals.

The company's technological edge extends to specific product lines. Its patented and differentiated electrical cable and flexible conduit products have consistently driven growth, reflecting superior performance and reliability in critical electrical power systems. In the solar energy sector, Atkore's mechanical tube products, particularly its solar torque tubes, have seen double-digit growth for two consecutive years. The Hobart, Indiana facility, central to solar torque tube production, has achieved significant operational improvements, "hitting speeds, productivity, all the different things that we're expecting." This operational prowess ensures that Atkore can meet the escalating demand for solar components, a market expected to grow "well above GDP going forward" due to the urgent need for energy and the efficiency of solar deployment.

Strategic Growth Pillars and Market Leadership

Atkore is actively pursuing two key strategic growth pillars: expanding into water-related end markets and capitalizing on global megaprojects. The expansion into PVC and HDPE products for municipal waterworks and plumbing markets is a natural extension of its existing pipe and conduit expertise. This initiative is strategically timed to benefit from the Infrastructure Investment and Jobs Act (IIJA), which has earmarked $55 billion for water projects, focusing on replacing aging infrastructure. Dodge Construction Network estimates the residential and commercial plumbing market alone will grow approximately 6% in FY25, providing a clear growth runway for Atkore. The company's national footprint, enhanced by new regional service centers in Texas and Georgia, is crucial for efficiently serving these new geographies and customer segments.

The second pillar, global megaprojects, sees Atkore leveraging its construction services capabilities and the globally recognized Unistrut brand to support the construction of data centers, chip manufacturing plants, and other large-scale industrial projects. Data centers, in particular, are experiencing explosive growth, with Bloomberg Intelligence projecting the generative AI market to reach $1.3 trillion over the next decade. Dodge Construction Network forecasts data centers to grow 15% in square footage and 20% in dollar value in FY25. Atkore's ability to provide comprehensive solutions, including off-site manufacturing of scalable modular designs, positions it as a preferred partner for these complex, high-density electrical infrastructure projects.

Financial Performance and Operational Discipline

Atkore’s recent financial performance reflects a company adept at managing complex market dynamics while executing its long-term strategy. For the third quarter of fiscal 2025, the company reported net sales of $735.0 million, a 10.6% decrease year-over-year. This decline was primarily driven by a $100.5 million decrease in average selling prices and a $4.2 million impact from divestitures, partially offset by a 1.9% increase in organic sales volume. Adjusted EBITDA for the quarter stood at $100.0 million, with Adjusted EPS at $1.63.

Over the nine months ended June 27, 2025, net sales decreased by 13.1% to $2.10 billion, predominantly due to a $303.3 million reduction from lower average selling prices. Despite these top-line pressures, the company’s operational discipline is evident. The Safety Infrastructure segment, for instance, saw its Adjusted EBITDA margin increase to 14.4% in Q3 2025 from 13.8% in the prior year, driven by strong productivity and cost management in North American operations. This contrasts with the Electrical segment, which experienced margin compression due to significant pricing declines in PVC and steel conduit products.

A notable event in Q2 2025 was a non-cash impairment charge of $127.7 million related to the HDPE business. This was triggered by the emergence of competing technologies for fiber optic cable and delays in government stimulus funding for broadband infrastructure, leading to a reduction in the estimated useful life of related intangible assets. Despite this, Atkore's balance sheet remains robust, with no debt maturity repayments required until 2028 and an undrawn $325 million ABL Credit Facility. The company generated $192.4 million in cash flow from operations over the nine months ended June 27, 2025, and continues its balanced capital deployment, repurchasing $100.0 million in common stock and increasing its quarterly dividend to $0.33 per share.

Competitive Landscape and Market Headwinds

Atkore operates in a highly competitive environment, facing both established players and new entrants. Key direct competitors like MYR Group Inc. (MYRG), Eaton Corporation (ETN), Hubbell Incorporated (HUBB), and nVent Electric (NVT) offer a mix of specialized services and broad product portfolios. Atkore's competitive advantage lies in its strong brand recognition, extensive distribution networks, and cost leadership in manufacturing, which enable it to maintain customer loyalty and efficient sales channels. For instance, its brands like Allied Tube & Conduit offer superior performance in challenging conditions, providing a qualitative edge over MYR Group's project-based services. Atkore's operational efficiencies translate into competitive pricing and stronger profitability, differentiating it from Eaton's more technologically focused, broader power management solutions.

However, the company faces significant headwinds, particularly from import competition in its PVC and steel conduit businesses. In Q3 2025, imported steel conduit volumes declined significantly, by "well over 20%, maybe getting up to 30% down for the quarter," largely due to increased tariffs, including a 50% tariff on imports from Mexico and Canada. While this is a net positive for Atkore, as it aims to "recapture lost market share from imports," the unpredictability of tariff policies and the potential for pre-buying by importers create market volatility. Similarly, PVC conduit has seen new domestic competitors and imports from Latin America, intensifying pricing pressure. Management notes that some imported products may not meet U.S. quality standards, with one significant importer failing impact tests, raising concerns about safety and compliance.

The recently expanded aluminum tariffs (25% to 50%) also present a new cost challenge, as Atkore imports aluminum from Canada and has not yet been able to fully recoup these costs. Despite these challenges, Atkore's market leadership, national footprint, and efficient manufacturing processes provide a strong defense. The company's ability to serve and deliver products quickly, often within two days through its regional service centers, offers a "Hazardous Advantage" against competitors, especially for bulky, light items like PVC conduit where freight costs are a significant factor.

Outlook and Future Trajectory

Atkore's management has adopted a pragmatic and conservative approach to its fiscal year 2025 outlook, anticipating continued pricing headwinds, particularly in PVC conduit, which is expected to decline to pre-COVID levels by year-end. For FY25, the company maintains its Adjusted EBITDA midpoint at $400 million (range of $390 million to $410 million) and has raised its Adjusted EPS midpoint to $6.50 (range of $6.25 to $6.75), reflecting improved visibility and stronger earnings leverage. The full-year tax rate is expected to be between 19% and 21%, influenced by the Q2 impairment charge. Volume growth for FY25 is projected to be flat to slightly positive, with a stronger second half driven by seasonal construction activity and the ramp-up of strategic initiatives.

Looking ahead to fiscal year 2026, Atkore anticipates approximately $50 million in "unmitigated headwinds," primarily from the carry-over effect of lower selling prices from FY25 and the impact of expanded aluminum tariffs. However, management is actively working to mitigate these pressures through ongoing productivity improvements and strategic actions. The company expects "reasonable growth" or a "low single-digit-type environment" for volume in FY26, driven by the continued momentum in data centers, solar, and water infrastructure. The long-term investment thesis remains strong, underpinned by Atkore's operational excellence, strategic market positioning, and commitment to shareholder returns.

Conclusion

Atkore Inc. stands at a pivotal juncture, demonstrating remarkable resilience and strategic agility in a complex and competitive market. The company's core investment thesis is rooted in its ability to leverage a robust domestic manufacturing base, a diversified product portfolio, and a deeply ingrained culture of operational excellence to capitalize on enduring megatrends in electrification and infrastructure development. Despite facing significant pricing pressures from increased competition and the unpredictability of tariffs, Atkore's proactive management, evidenced by its conservative guidance and aggressive productivity initiatives, positions it for sustained value creation.

The strategic expansion into water-related markets and its growing presence in global megaprojects, particularly data centers, represent potent growth engines that are expected to drive volume and offset near-term headwinds. While the retirement of CEO William Waltz marks a transition, the company's strong "Atkore Business System" and experienced leadership team instill confidence in its continued trajectory. Investors should recognize Atkore's strong balance sheet, consistent capital returns, and its technological and operational advantages as critical differentiators that will enable it to convert market opportunities into long-term shareholder value, even as it navigates the evolving competitive landscape.