Atkore – Sales Turn Positive, Some Litigation Issues Settled, Sold Two Businesses, What Emerges?

Atkore announced its Q1 2026 results on May 5.  There sales were $731 million, an increase of 11%.  However, gross margin fell sharply to 18.6% from 26.4% a year ago, and adjusted EBITDA declined year over year to $81.1 million from $116.4 million.

Organic volume increased 5% compared to prior year with growth from both the Electrical and S&I segments.

The quarter was helped by stronger organic volumes, modest pricing and productivity gains, and solid demand from data centers and solar projects. Management specifically said this was the first quarterly year-over-year sales increase since fiscal Q4 2022, which made the quarter a meaningful inflection point.

Sales by Segment

Atkore’s Electrical segment (about 70% of the business) rose 8.1% to $532.5 million, but adjusted EBITDA fell 18.2% to $74.4 million as input costs rose faster than pricing.  Safety & Infrastructure segment sales fell 4.9% to $199.1 million, and adjusted EBITDA dropped 52.0% to $17.3 million, mainly due to divestitures, higher solar credit rebates, and input costs.

Two of Three PVC Price Fixing Antitrust Claims Settled

This quarter, Atkore reached settlement agreements to resolve two of the three lawsuits in the ongoing antitrust litigation in the PVC Pipe Antitrust Litigation.  Settlements were reached with Direct Purchaser Plaintiffs and Non-Converter Seller Purchaser Plaintiffs. The settlements require the company to pay $136.5 million, comprising $72.5 million for the Direct Purchaser Plaintiffs and $64 million for the Non-Converter Seller Purchaser Plaintiffs.  Settlements were entered on April 28–29, 2026.

Atkore recorded this settlement as a non-operating expense in their 2Q 2026 quarter ended March 27, 2026. Atkore plans to fund the payments with existing cash on hand, stating that the settlement will not materially affect its liquidity or leverage metrics. This resolution allows the company to mitigate legal uncertainty and the operational distraction of ongoing, protracted litigation concerning alleged coordinated industry conduct.  But they are not out of the proverbial woods

There remains some risk as the EUP class represents a potentially significant and ongoing legal exposure for the company.  Because the End User Plaintiffs represent the final “downstream” layer of the market—often paying the most inflated prices—their potential damages are theoretically higher than those of direct purchasers, though they face stricter legal hurdles under federal law (often relying on state-specific “indirect purchaser” statutes).

The End User Plaintiffs are seeking trebled damages (triple the actual financial loss) under various state antitrust and consumer protection laws. Their consolidated complaint, filed in August 2025, alleges that Atkore and other manufacturers (like Westlake and JM Eagle) used a private pricing service (OPIS) to coordinate price hikes under the “cover” of pandemic-related supply chain disruptions.

The outcome for the End User Plaintiffs is “uncertain” and the company continues to defend itself against the specific claims while the other settlements await final court approval.

Atkore Continues Restructuring to Achieve Focus

On April 8, Atkore sold its HDPE pipe and conduit business to Infra Pipes, marking a shift away from polyethylene pipeline products as the company refocuses on its core electrical offerings.

Under the terms of the agreement, Atkore will contribute its HDPE business AND capitalize the combined business with approximately $28 million. Atkore obtains a 10% equity stake in the combined entity. Associated with this transaction, Atkore expects to achieve various tax benefits resulting from the sale.

The exact amount was not disclosed as this was structured more like a contribution into a new combined company rather than an outright cash sale, so the economics are split between the upfront capital contribution and ongoing equity ownership. Because Atkore kept 10%, the total value to Atkore is higher than the $28 million contribution alone, but the exact amount depends on Infra Pipes’ valuation and future performance.

Recall that in December, Atkore sold the Tectron mechanical tube product line to Lock Joint Tube, the first step in its review of strategic alternatives that continued this quarter. And in 2025 Atkore divested Northwest Polymers in February.

With Atkore more focused on its core electrical infrastructure portfolio, there are alternative paths ranging from continued portfolio simplification and focus on electrical products to a full company sale or merger..

The most immediate path looks like continued divestitures plus cost actions, because those are already underway and easier to execute than a full sale. But the board has clearly left the door open to a broader transaction if it receives an attractive offer.

Atkore 2026 Guidance

Even with better sales and volume trends, management did not raise full-year guidance, which likely led some investors to wonder how much of the demand recovery is durable versus temporary. The company said it remained on track for the existing outlook, but the steady guide suggested caution on margin and cash conversion for the rest of the year.

The chart below shows expected sales by key product area for FY 2026 and the respective growth outlooks, overall Atkore is guiding a 3.5% increase.

Analyst Concerns

Atkore’s Q2 2026 results were notable as a clear operational recovery in sales, but this was distorted by the noise from the one-offs – the litigation expense, losses on assets held for sale, and other non-operating items that pressured profitability.  Even though management framed the settlement as resolving two of three classes, investors focused on the cash outflow and the fact that it overwhelmed underlying operating progress.  Plus, the concerns raised above.

The gross margin and adjusted EBITDA declines raised questions about how quickly pricing can catch up with input costs and whether product mix, especially in Electrical, can sustain a stronger margin profile.

Management pointed to solid end-market demand and improvements in opportunities from the data center and solar markets, but investors wanted more detail on whether those pockets can offset weakness elsewhere, particularly given divestitures in the Safety & Infrastructure segment. That makes the sales recovery encouraging, but not yet broad-based enough to remove concerns.

What will be the next strategic action?  Continued disposal of non-core products or divisions or something more dramatic?  Can Electrical performance be maintained?  How well will input and tariff costs be recovered through price?  What is the company’s outlook once they get HDPE and their legal issues off their books?  Once the litigation is off the books, what’s next? Will Atkore stay as a focused conduit manufacturer, invest to diversify (doubtful), or sell, either to PE or a strategic partner?