Brady (BRC) Q2 2026 earnings summary

Executive summary

• Achieved 20th consecutive quarter of organic sales growth, with net sales for the quarter ended January 31, 2026, up 7.7% to $384.1 million, driven by organic growth, acquisitions, and favorable currency translation.

• Operating income rose 21.4% to $62.2 million, and net income increased 19.1% to $48.1 million year-over-year.

• Gross profit margin improved to 50.6% from 49.8% (adjusted) last year, reflecting a higher-margin product mix and absence of prior-year reorganization costs.

• Launched the i4311 Transportable Industrial Desktop Label Printer, expanding product capabilities and featuring LabelSense technology.

• Increased investment in R&D to nearly 6% of revenue, with a new CTO hired to strengthen the technical roadmap.

Financial highlights

• Organic sales grew 1.6% year-over-year; total sales growth was 7.7% including acquisitions and FX.

• Gross margin for the six months rose to 51.1% from 49.8% in the prior year.

• Adjusted diluted EPS increased 9% to $1.09; GAAP EPS was $1.01, up 21.7% from $0.83.

• Operating cash flow rose 34.7% to $53.3 million for the quarter; free cash flow up 30.5% to $42.3 million.

• Net income for the six months was $102.0 million, up from $87.1 million a year earlier.

Outlook and guidance

• Raised lower end of adjusted diluted EPS guidance to $4.95–$5.15 for FY26, representing 7.6%–12% growth.

• GAAP EPS guidance for FY26 raised to $4.62–$4.82 per share.

• Organic sales growth expected in low single digits for FY26.

• Depreciation/amortization expected at $44 million; CapEx at $45 million; tax rate at 21%.

• Risks include FX volatility, inflation, supply chain disruptions, and economic slowdown.