American Vanguard 2025 Q1 Earnings Misses Targets with Net Income Down 645%

American Vanguard (AVD) reported its fiscal 2025 Q1 earnings on June 6th, 2025. The company missed expectations with a significant downturn in both revenue and net income. American Vanguard adjusted its full-year revenue guidance downward to a range of $535 million to $545 million, and revised its adjusted EBITDA target to $40 million to $44 million, which was lower than previous estimates. This adjustment reflects the company's cautious outlook despite early signs of recovery.

Revenue
The total revenue of American Vanguard decreased by 14.3% to $115.80 million in 2025 Q1, down from $135.14 million in 2024 Q1.

Earnings/Net Income
American Vanguard swung to a loss of $0.30 per share in 2025 Q1 from a profit of $0.06 per share in 2024 Q1 (600.0% negative change). Meanwhile, the company reported a net loss of $-8.46 million in 2025 Q1, reflecting a 645.2% deterioration from the net income of $1.55 million achieved in 2024 Q1. The EPS results indicate a challenging period for the company.

Price Action
The stock price of American Vanguard has climbed 4.88% during the latest trading day, has edged up 0.41% during the most recent full trading week, and has surged 16.24% month-to-date.

Post-Earnings Price Action Review
The investment strategy of purchasing American Vanguard shares when revenue exceeds expectations and holding for 30 days has proven to be ineffective. This approach resulted in a return of -64.73%, accompanied by a Sharpe ratio of -0.41, suggesting significant risk and negative returns. The strategy's maximum drawdown reached -85.41%, while its volatility stood at 46.55%, indicating a highly volatile and risky investment. Despite these challenges, the stock has shown some resilience in recent trading, climbing 4.88% on the latest trading day and gaining 0.41% over the past week, with a notable month-to-date surge of 16.24%. Investors should exercise caution as the strategy's historical performance has been unfavorable.

CEO Commentary
Douglas Kaye, CEO, highlighted the significant changes at American Vanguard, noting that while 2024 was challenging, the company managed to reduce operating expenses by $5 million and net trade working capital by $86 million. He emphasized the ongoing transformation efforts, stating, "We expect this hard work should begin to materialize in the upcoming quarters." Kaye acknowledged challenges such as destocking and market weaknesses but expressed optimism due to low channel inventories and expected recovery, asserting, "The opportunity to transform this business largely stands in front of us." He aims for a 15% adjusted EBITDA margin over time while continuing to enhance operational efficiency.

Guidance
The company adjusted its full-year revenue estimate to a range of $535 million to $545 million and revised its adjusted EBITDA target to $40 million to $44 million, down from $45 million to $52 million. Kaye stated, "While we are beginning to see early stages of a recovery, we do not want to forecast an overly optimistic outlook at this juncture." He anticipates that ongoing customer replenishment will positively impact demand as the year progresses, with capital expenditures expected to fall within the $8 million to $9 million range.

Additional News
American Vanguard recently announced changes to its executive leadership, with CEO Douglas Kaye III participating in the Lake Street Capital Investor Forum. Additionally, the company has withdrawn the registration of its Dacthal product as part of its strategic realignment. Earlier this year, American Vanguard signed a regional distribution agreement with DPH Biologicals™, aiming to expand its market reach. These efforts underscore the company's commitment to adapting its business strategies amidst challenging market conditions and enhancing its operational focus.