Armstrong World Industries (AWI) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 increased 7.1% year-over-year to $409.9M, driven by higher volumes, favorable pricing, and contributions from both Mineral Fiber and Architectural Specialties segments.

• Adjusted EBITDA rose 1% to $130M, while operating income declined 4.4% to $94.2M due to higher manufacturing, SG&A, and non-recurring costs.

• Diluted EPS decreased 1.9% to $1.55, but adjusted diluted EPS increased 1.8% to $1.69.

• Recent acquisitions (Eventscape, Parallel, Geometrik, Zahner) expanded Architectural Specialties and contributed $5M in inorganic sales growth.

• CEO transition completed, with continued focus on innovation, productivity, and customer relationships.

Financial highlights

• Q1 2026 net sales: $409.9M vs. $382.7M in Q1 2025; net earnings: $66.8M vs. $69.1M.

• Adjusted EBITDA margin declined to 31.7% from 33.6% year-over-year; operating income margin decreased to 23.0% from 25.7%.

• Mineral Fiber segment net sales up 4.9% to $257.2M, with adjusted EBITDA up 3.5% to $109M and margin at 42.4%.

• Architectural Specialties segment net sales up 11% to $152.7M; adjusted EBITDA down 11.9% to $21M; margin at 13.6%, impacted by a $2M one-time tariff adjustment and higher costs.

• Adjusted free cash flow was $47M, down 1% year-over-year, mainly due to working capital timing and cash taxes.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: net sales of $1,745M–$1,785M (8–10% YoY growth), adjusted EBITDA of $600M–$620M (8–12% YoY growth), adjusted diluted EPS of $8.15–$8.45 (10–14% YoY growth), and adjusted free cash flow of $375M–$395M (9–14% YoY growth).

• Raised adjusted diluted EPS growth guidance to 10–14% for 2026, reflecting increased share repurchases.

• Expect Mineral Fiber Adjusted EBITDA margin ~44% and AS margin ~19–20% for the year.

• Anticipate improved sales and margin expansion in both segments in the second half of 2026.

• Growth initiatives in digital, energy-saving products, and data center solutions expected to drive up to 1.5 percentage points of volume growth ahead of market.