Allegion rises on non-residential biz, remains cautious on tariffs

DUBLIN — Allegion says its positive financial results for the first quarter ended March 31, 2025, are the result of top-line growth in the Americas, driven by the company’s non-residential business, but it’s holding off on updating its revenue outlook for the rest of the year due to the volatility of tariffs.  

First quarter 

Allegion’s non-residential business was up high-single digits, while its residential business declined mid-single digits. 

“Allegion is off to a strong start in 2025,” said Allegion President and CEO John H. Stone. “I’m proud of our team’s execution as we remained agile in a very dynamic environment. I’m especially pleased with the results delivered by our Americas non-residential business, which demonstrate the resiliency of our business model, our broad end market exposure and the depth of our relationships with channel partners and end users.” 

Stone noted that the company expected softness in its residential business after a slightly stronger Q4 and the company expects that to continue given tariff and interest rate uncertainty. However, it aims to make headway in the residential business by joining other manufacturers in offering a smart deadbolt, courtesy of Schlage, that will provide homeowners with a hands-free authorized user access control option. 

Tariffs 

Owing to current tariff-related pricing actions and foreign exchange rates, Allegion said it's not updating its revenue outlook for those assumptions. Stone told investors to expect a delay in the impact of the tariffs, with the second quarter potentially providing better visibility.  

“But as you think about the second quarter, there could be a little headwind,” he said. “You know, we talked about that month one-ish of that lag. So, as you think about this for the year, think of it as neutral, but think the second quarter could have that month impact.” 

Stone did acknowledge the chaotic nature of the changing tariffs were something on every company’s mind as they try to navigate pricing actions and impact on markets.  

“We take out time to analyze each one of these enacted tariffs,” he said. “It’s a lot of details and a lot of information to sift through.” 

Financials at a glance: 

Allegion reported first-quarter 2025 net revenues of $941.9 million and net earnings of $148.2 million, or $1.71 per share. Adjusted net earnings were $161.2 million, or $1.86 per share, up 20.0%, excluding items primarily related to restructuring, acquisition and integration expenses, as well as amortization expense related to acquired intangible assets.  

First-quarter 2025 net revenues increased 5.4%. On an organic basis, which excludes the impacts of acquisitions, divestitures and foreign currency movements, net revenues increased 4%, led by the Americas region. The organic revenue increase was driven by price realization and volume growth. Reported revenue reflects a 2.2% positive impact from acquisitions and a 0.8% headwind from foreign currency. 

First-quarter 2025 operating income was $196.4 million, an increase of $24.3 million or 14.1%. Adjusted operating income in first-quarter 2025 was $213.4 million, an increase of $24.1 million or 12.7%. First-quarter 2025 operating margin was 20.9%, compared with 19.3%. The adjusted operating margin in first-quarter 2025 was 22.7%, compared with 21.2%. The 150-basis-point increase in adjusted operating margin is attributable to favorable volume leverage, mix and acquisitions.