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.

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

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

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

• Increased R&D investment to nearly 6% of revenue, supporting innovation and future growth.

Financial highlights

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

• Gross profit margin improved to 50.6% from 49.8% (adjusted) last year.

• Adjusted diluted EPS increased 9% to $1.09; GAAP EPS rose to $1.01 from $0.83.

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

• Net income increased 19.1% to $48.1 million; adjusted net income up 8% to $52 million.

Outlook and guidance

• Raised lower end of full-year adjusted EPS guidance to $4.95–$5.15 (from $4.90–$5.15); GAAP EPS to $4.62–$4.82.

• Expecting low single-digit organic sales growth for fiscal 2026.

• Guidance includes $44 million depreciation/amortization, $45 million capex, and 21% tax rate.

• Management expects continued investment in organic growth, digital capabilities, and operational efficiency.

• Risks include USD strengthening, inflation, and economic slowdown.