Atkore Inc. (ATKR) Income Statement

The 10.98% TTM revenue decline masks a sequential uptick in 2026Q3, where revenue rose 8.1% from the prior quarter to $794.8M. This suggests that the pricing-driven contraction of the past year is easing, possibly due to stabilizing commodity prices and modest volume recovery. However, the year-over-year growth rate remains negative at -10.6% in 2025Q3, indicating that the top-line is still under pressure, and the durability of the sequential improvement is uncertain given the lack of forward guidance.

The dramatic contraction in gross margin from 35.0% to 22.2% over the past two years indicates that Atkore's pricing power has eroded significantly as post-pandemic supply chain disruptions normalized. The PVC-to-resin spread, a key driver, has likely narrowed, and the company's ability to pass through raw material costs has weakened. This margin compression is not just cyclical but may reflect a structural shift in the competitive landscape, as peers like nVent and Grainger maintain gross margins above 37%, highlighting Atkore's commodity-exposed position.

The sharp decline in operating margin from 22.6% to 8.1% demonstrates negative operating leverage as revenue fell and gross margin compressed. SG&A expenses have remained relatively stable around $100M per quarter, but as a percentage of revenue, they have risen from 12.4% in 2024Q2 to 13.7% in 2026Q3, indicating that overhead is not being scaled down proportionally. This suggests that management has been slow to adjust its cost base, and if revenue continues to decline, operating margins could face further pressure.

The increase in COGS ratio from 65.0% to 77.8% over the past two years highlights the primary cost pressure: raw materials like steel and PVC resin. This suggests that Atkore has been unable to fully pass through input cost increases, or that selling prices have fallen faster than input costs. SG&A has remained relatively flat in absolute terms, but as a percentage of revenue, it has risen, indicating that overhead efficiency has not improved. The company's high variable cost structure offers some downside protection, but the current trend suggests that cost discipline will be critical to margin recovery.

The 2024Q2 quarter represents the high-water mark for Atkore's profitability, with gross margin at 35.0% and operating margin at 22.6%. Since then, margins have contracted each quarter, with the most severe drop occurring in 2025Q2 and 2026Q2, where net income turned negative. This inflection was likely driven by the bursting of the post-pandemic pricing bubble in PVC and steel, leading to a rapid normalization of spreads. The lasting impact is that Atkore's earnings power has reset to a lower level, and the company may not return to those peak margins without a significant shift in supply-demand dynamics.