Lincoln Electric (LECO) investor relations material

Executive summary

• Record Q3 net sales rose 15.1% to $1,221.3M; organic sales grew 14.5%, driven by volume and pricing across all three segments.

• Record adjusted EPS increased 20.6% to $2.98; adjusted operating margin expanded 60 bps to 18.0%.

• Operating cash flow was $215.8M, cash conversion was 107%, and adjusted ROIC reached 23.9%.

Financial highlights

• Sales were $1,221.3M, up 15.1%; volume contributed 8.8% and price 5.7% to growth.

• Gross profit increased 9.2% to $425.0M, while gross margin fell 190 bps to 34.8% on higher input costs.

• Adjusted operating income rose 19.2% to $220.0M; reported operating income increased 19.7% to $211.4M.

• Diluted EPS was $2.63, up 19.0%; adjusted EPS was $2.98, up 20.6%, including a $0.04 benefit from share repurchases.

• SG&A was 16.9% of sales, down 260 bps YoY, reflecting operating leverage.

Outlook and guidance

• FY26 net sales growth assumption increased to the low-teens; organic sales mix assumption is 40% volume and 60% price.

• Q4 assumptions include neutral price/cost, YoY gross margin expansion and a mid-20% incremental adjusted operating income margin; SG&A estimate is $210M-$215M.

• FY26 capex guidance increased to $140M-$150M; other assumptions include $50M-$55M interest expense, a low-to-mid-20% tax rate and 100% cash conversion.

• Mid-to-high-single-digit organic growth is the strategic framework for 2027; automation exited Q3 at a low-double-digit EBIT profile, with record backlog supporting momentum.