Allegion Earnings: First-Quarter Sales Dip on Tough Prior-Year Comp, but Margin Expansion Continues

Wide-moat-rated Allegion reported solid first-quarter results considering a very challenging prior-year sales comparison. Indeed, first-quarter 2023 revenue increased nearly 28% year over year. As such, we weren’t surprised that Allegion’s first-quarter 2024 revenue declined approximately 3% year over year. The company benefited from solid pricing during the quarter, which contributed 4 percentage points to the top line, but volumes fell 8% year over year, and favorable currency and acquisitions had a de minimis effect on sales growth. Nevertheless, adjusted operating margin expanded 40 basis points to 21.2% as pricing and cost containment initiatives more than offset ongoing reinvestment spending.