Headquartered in Winchester, VA, American Woodmark Corporation (AMWD) is a leading manufacturer and distributor of kitchen and bath cabinets for remodeling and new home construction markets.
 
The company manufactures cabinets under four major brands:  American Woodmark, Timberlake Cabinetry, Shenandoah Cabinetry and Waypoint Living Spaces and sells more than 500 cabinet lines in a wide variety of design materials and finishes. 
 
Their products are sold through a network of independent dealers and distributors, and directly to major builders, Lowe’s and The Home Depot.

Excellent Quarterly Results
 
The company reported its fiscal first quarter results on Aug. 23. Net sales for the quarter increased 12% year-over-year to $258.2 million with growth across all channels. Net income was $21.7 million or $1.32 per share compared with $15.2 million or $0.92 per share for the same quarter a year ago.
 
Adjusted earnings of $1.26 per share were substantially better than the Zacks Consensus Estimate of $0.94 per share. The company has surpassed the Zacks Consensus Estimate in all of last four quarters, with an average quarterly surprise of 33%.
 
Rising Estimates 
 
As a result of strong quarterly report, analysts have raised their estimates for the company. Zacks Consensus Estimates for the current and the next fiscal year now stand at $4.40 per share and $4.79 per share, up from $3.94 and $4.55, before the report.
 
Rising estimates sent AMWD back to a Zacks Rank#1 (Strong Buy).

Home Remodeling Speeding Expected to Surge

According to a study by John Burns Real Estate Consulting and the Harvard Joint Center for Housing Studies, spending on home repairs and remodeling is expected to exceed $300 billion this year, ahead of the previous high of about $285 billion in 2007.
 
With very low inventories of homes for sale and rising prices, many homeowners prefer to improve their existing home instead of buying a new one. Further, American homes are getting older, leading to rising spending on repairs. With improving labor market, homeowners are also willing to spend more on upgrades and remodeling.
 
The study forecasts that home improvement spending will continue to grow at a fast pace over the next three years. These trends bode well for the company. Further, being a domestically focused company, it is immune to global growth concerns.
 
In addition the top Zacks Rank, the stock also has the Style Score of “A” for Growth as well as for Momentum and a VGM score of “B”.